EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of September 27, 1999
among
MPATH INTERACTIVE, INC.,
ITR ACQUISITION CORP.
and
RESOUNDING TECHNOLOGY, INC.
TABLE OF CONTENTS
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ARTICLE I - THE MERGER..............................................................................2
Section 1.1 Effective Time of the Merger..............................................2
Section 1.2 Closing...................................................................2
Section 1.3 Effects of the Merger.....................................................2
Section 1.4 Directors and Officers....................................................3
ARTICLE II - CONVERSION OF SECURITIES...............................................................3
Section 2.1 Conversion of Capital Stock...............................................3
Section 2.2 Escrow Agreement..........................................................6
Section 2.3 Dissenting Shares.........................................................6
Section 2.4 Exchange of Certificates..................................................7
Section 2.5 Distributions with Respect to Unexchanged Shares..........................8
Section 2.6 No Fractional Shares......................................................8
Section 2.7 Tax and Accounting Consequences...........................................8
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF RTI.................................................9
Section 3.1 Organization of RTI.......................................................9
Section 3.2 RTI Capital Structure.....................................................9
Section 3.3 Authority; No Conflict; Required Filings and Consents....................11
Section 3.4 Financial Statements; Absence of Undisclosed Liabilities.................12
Section 3.5 Tax Matters..............................................................12
Section 3.6 Absence of Certain Changes or Events.....................................15
Section 3.7 Title and Related Matters................................................16
Section 3.8 Proprietary Rights.......................................................16
Section 3.9 Employee Benefit Plans...................................................18
Section 3.10 Bank Accounts............................................................20
Section 3.11 Contracts................................................................20
Section 3.12 Compliance With Law......................................................22
Section 3.13 Labor Difficulties; No Discrimination....................................22
Section 3.14 Insider Transactions.....................................................23
Section 3.15 Employees, Independent Contractors and Consultants.......................23
Section 3.16 Insurance................................................................23
Section 3.17 Litigation...............................................................23
Section 3.18 Governmental Authorizations and Regulations..............................24
Section 3.19 Subsidiaries.............................................................24
Section 3.20 Compliance with Environmental Requirements...............................24
Section 3.21 Corporate Documents......................................................24
Section 3.22 No Brokers...............................................................25
Section 3.23 RTI Action...............................................................25
Section 3.24 Offers...................................................................25
Section 3.25 Disclosure...............................................................25
Section 3.26 Disclosure to Stockholders...............................................25
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF MPATH AND SUB.......................................26
TABLE OF CONTENTS
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Section 4.1 Organization of Mpath and Sub............................................26
Section 4.2 Capitalization...........................................................26
Section 4.3 Authority; No Conflict; Required Filings and Consents....................26
Section 4.4 Commission Filings; Financial Statements.................................28
Section 4.5 Compliance with Laws.....................................................28
Section 4.6 Interim Operations of Sub................................................28
Section 4.7 Stockholders Consent.....................................................28
Section 4.8 Disclosure...............................................................28
Section 4.9 Absence of Undisclosed Liabilities.......................................29
Section 4.10 Absence of Certain Changes or Events.....................................29
Section 4.11 Corporate Documents......................................................29
Section 4.12 No Brokers...............................................................29
Section 4.13 Disclosure to Stockholders...............................................29
ARTICLE V - PRECLOSING COVENANTS OF RTI............................................................30
Section 5.1 Approval of RTI Stockholders.............................................30
Section 5.2 Advice of Changes........................................................30
Section 5.3 Operation of Business....................................................31
Section 5.4 Access to Information....................................................32
Section 5.5 Satisfaction of Conditions Precedent.....................................32
Section 5.6 Other Negotiations.......................................................32
ARTICLE VI - PRECLOSING AND OTHER COVENANTS OF MPATH AND SUB.......................................33
Section 6.1 Advice of Changes........................................................33
Section 6.2 Reservation of Mpath Common Stock........................................33
Section 6.3 Satisfaction of Conditions Precedent.....................................33
Section 6.4 Nasdaq National Market Listing...........................................33
Section 6.5 Stock Options and Warrants...............................................33
Section 6.6 Registration of Shares Issued in the Merger..............................35
Section 6.7 Certain Employee Benefit Matters.........................................35
Section 6.8 Put Right................................................................35
ARTICLE VII - OTHER AGREEMENTS.....................................................................36
Section 7.1 Confidentiality..........................................................36
Section 7.2 No Public Announcement...................................................36
Section 7.3 Regulatory Filings; Consents; Reasonable Efforts.........................36
Section 7.4 Further Assurances.......................................................36
Section 7.5 Escrow Agreement.........................................................36
Section 7.6 FIRPTA...................................................................37
Section 7.7 Blue Sky Laws............................................................37
Section 7.8 Other Filings............................................................37
ARTICLE VIII - CONDITIONS TO MERGER................................................................37
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger...............37
Section 8.2 Additional Conditions to Obligations of Mpath and Sub....................38
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TABLE OF CONTENTS
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Section 8.3 Additional Conditions to Obligations of RTI..............................39
ARTICLE IX - TERMINATION AND AMENDMENT.............................................................40
Section 9.1 Termination..............................................................40
Section 9.2 Effect of Termination....................................................41
Section 9.3 Fees and Expenses........................................................41
ARTICLE X - ESCROW AND INDEMNIFICATION.............................................................41
Section 10.1 Indemnification..........................................................41
Section 10.2 Escrow Funds.............................................................42
Section 10.3 Damage Threshold.........................................................42
Section 10.4 Escrow Periods...........................................................43
Section 10.5 Claims Upon Escrow Fund..................................................44
Section 10.6 Final Release of Escrow Shares...........................................45
Section 10.7 Valuation................................................................45
Section 10.8 Delivery of Officer's Certificate; Objections to Claims for
Regular Damages.......................................................46
Section 10.9 Resolution of Conflicts..................................................46
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Section 10.10 Stockholders'Agents......................................................47
Section 10.11 Actions of the Stockholders'Agents.......................................47
Section 10.12 Claims...................................................................48
ARTICLE XI - MISCELLANEOUS.........................................................................48
Section 11.1 Survival of Representations and Covenants................................48
Section 11.2 Notices..................................................................48
Section 11.3 Interpretation...........................................................49
Section 11.4 Counterparts.............................................................49
Section 11.5 Entire Agreement; No Third Party Beneficiaries...........................50
Section 11.6 Governing Law............................................................50
Section 11.7 Assignment...............................................................50
Section 11.8 Amendment................................................................50
Section 11.9 Extension; Waiver........................................................50
Section 11.10 Specific Performance.....................................................50
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TABLE OF CONTENTS
EXHIBITS Page
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EXHIBIT A - VOTING AGREEMENT
EXHIBIT B - NONCOMPETITION AGREEMENT
EXHIBIT C - STOCKHOLDERS AGREEMENT
EXHIBIT D - AMENDMENT NO. 1 TO AMENDED AND RESTATED FOUNDER
STOCK RESTRICTION AGREEMENT
EXHIBIT E - INVESTOR REPRESENTATION STATEMENT
EXHIBIT F - ESCROW AGREEMENT
EXHIBIT G - FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of September 27, 1999 (this
"Agreement"), is entered into by and among Mpath Interactive, Inc., a Delaware
corporation ("Mpath"), ITR Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Mpath ("Sub"), and Resounding Technology, Inc., a
Delaware corporation ("RTI").
RECITALS
A. The Boards of Directors of Mpath, Sub and RTI deem it advisable
and in the best interests of each corporation and their respective stockholders
that Mpath and RTI combine in order to advance the long-term business interests
of Mpath and RTI;
B. The combination of Mpath and RTI shall be effected by the terms of
this Agreement through a transaction in which Sub will merge with and into RTI,
RTI will become a wholly-owned subsidiary of Mpath and the stockholders of RTI
will become stockholders of Mpath (the "Merger");
C. For Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
D. For accounting purposes, it is intended that the Merger shall be
accounted for as a purchase transaction;
E. As a condition and inducement to Mpath's willingness to enter into
this Agreement, certain RTI stockholders holding at least 50% of the issued and
outstanding Series A Preferred Stock of RTI and at least 70% of the issued and
outstanding capital stock of RTI have, concurrently with the execution of this
Agreement, executed and delivered Voting Agreements in the form attached hereto
as Exhibit A (the "Voting Agreements"), pursuant to which such stockholders
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have, among other things, agreed to vote their shares of RTI capital stock in
favor of the Merger and to grant Mpath irrevocable proxies to vote such shares;
F. As a further condition and inducement to Mpath's willingness to
enter into this Agreement, each of Xxxx X. Xxxxxx, Xxxxx xx Xxxxxxxxx, Xxxxxxx
X. Xxxxxx, Xxxxxx Xxxxxxx, Xxxxx X. Xxxx and Xxxxx X. Xxxxx have, concurrently
with the execution of this Agreement, executed and delivered Noncompetition
Agreements in the form attached hereto as Exhibit B (the "Noncompetition
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Agreements"), which agreements shall only become effective at the Effective Time
(as defined in Section 1.1 below);
G. As a further condition and inducement to Mpath's willingness to
enter into this Agreement, certain stockholders of RTI have executed and
delivered to Mpath Stockholders Agreements in the form attached hereto as
Exhibit C (the "Stockholders Agreements").
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H. As a further condition and inducement to Mpath's willingness to
enter into this Agreement, each of Xxxx X. Xxxxxx, Xxxxx xx Xxxxxxxxx,
Xxxxxxx X. Xxxxxx and Xxxxxx Xxxxxxx have, concurrently with the execution of
this Agreement, executed and delivered Amendment No. 1 to Amended and Restated
Founder Stock Restriction Agreement in the form attached hereto as Exhibit D
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(the "Stock Repurchase Agreements"), which agreements shall only become
effective at the Effective Time.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
ARTICLE I
THE MERGER
Section 1.1 Effective Time of the Merger.
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(a) Subject to the provisions of this Agreement, a certificate of
merger (the "Certificate of Merger") in such mutually acceptable form as is
required by the relevant provisions of the Delaware General Corporation Law
("Delaware Law") shall be duly executed and delivered by the parties hereto and
thereafter delivered to the Secretary of State of the State of Delaware for
filing on the Closing Date (as defined in Section 1.2).
(b) The Merger shall become effective upon the due and valid filing of
the Certificate of Merger with the Secretary of State of the State of Delaware
or at such time thereafter as is provided in the Certificate of Merger (the
"Effective Time").
Section 1.2 Closing. The closing of the Merger (the "Closing")
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will take place at 10:00 a.m., California time, on a date (the "Closing Date")
to be specified by Mpath and RTI, which shall be no later than the second
business day after satisfaction or waiver of the latest to occur of the
conditions set forth in Article VIII, at the offices of Venture Law Group, A
Professional Corporation, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx unless
another date, time or place is agreed to in writing by Mpath and RTI.
Section 1.3 Effects of the Merger.
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(a) At the Effective Time (i) the separate existence of Sub shall
cease and Sub shall be merged with and into RTI (Sub and RTI are sometimes
referred to herein as the "Constituent Corporations" and RTI following
consummation of the Merger is sometimes referred to herein as the "Surviving
Corporation"), (ii) the Certificate of Incorporation of Sub shall be the
Certificate of Incorporation of the Surviving Corporation and (iii) the Bylaws
of Sub as in effect immediately prior to the Effective Time shall become the
Bylaws of the Surviving Corporation.
(b) At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of Delaware Law. Without limiting the
generality of the foregoing, at and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges,
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powers and franchises, and be subject to all the restrictions, disabilities and
duties of each of the Constituent Corporations.
Section 1.4 Directors and Officers. The directors of Sub
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immediately prior to the Effective Time shall become the directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation, and the officers of Sub
immediately prior to the Effective Time shall become the officers of the
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. At the Effective Time,
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by virtue of the Merger and without any action on the part of the holder of any
shares of Series A Preferred Stock, $.01 par value of RTI (the "RTI Preferred
Stock"), or shares of Common Stock, $.01 par value, of RTI ("RTI Common Stock"),
or capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of the
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capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of Common Stock, $0.01 par value, of the Surviving
Corporation.
(b) Cancellation of Mpath-Owned and RTI-Owned Stock. Any shares of
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RTI Common Stock or RTI Preferred Stock that are owned by Mpath, Sub, RTI or any
other direct or indirect wholly-owned Subsidiary of Mpath or RTI shall be
canceled and retired and shall cease to exist and no stock of Mpath or other
consideration shall be delivered in exchange. As used in this Agreement, the
word "Subsidiary" means, with respect to any other party, any corporation or
other organization, whether incorporated or unincorporated, of which (i) such
party or any other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by such party or
any Subsidiary of such party do not have a majority of the voting interest in
such partnership) or (ii) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with respect to such
corporation or other organization or a majority of the profit interests in such
other organization is directly or indirectly owned or controlled by such party
or by any one or more of its Subsidiaries, or by such party and one or more of
its Subsidiaries.
(c) Exchange Ratio.
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(i) Each issued and outstanding share of RTI Preferred Stock (other
than shares to be canceled in accordance with Section 2.1(b) and any Dissenting
Shares as defined in and to the extent provided in Section 2.3 and in each case
subject to subparagraph (iv) below) shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into the right to
receive a fraction of a fully paid and nonassessable share of Mpath Common Stock
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(as defined in Section 4.2) equal to the Exchange Ratio, as defined in and
determined in accordance with the provisions of subparagraph (iii) below.
(ii) Each issued and outstanding share of RTI Common Stock (other
than shares to be canceled in accordance with Section 2.1(b) and any Dissenting
Shares) shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive a fraction of a fully
paid and nonassessable share of Mpath Common Stock equal to the Exchange Ratio,
as defined in and determined in accordance with the provisions of subparagraph
(iii) below.
(iii) For purposes of this Agreement:
(A) the "Total Consideration Shares" shall be 1,750,000 shares of
Mpath Common Stock; provided, however, that the number of
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Total Consideration Shares shall be automatically increased by
a number of shares of Mpath Common Stock equal to 7.5% of the
number of any additional shares of Mpath Common Stock issued
by Mpath between August 27, 1999 and the Closing Date (such
number of additional shares of Mpath Common Stock to be
calculated on a fully diluted basis assuming the conversion,
exercise or exchange of any securities convertible,
exercisable or exchangeable for shares of Mpath Common Stock
that are issued between August 27, 1999 and the Closing Date,
except that such additional shares shall not include or take
into account any shares of Mpath Common Stock that are issued
or issuable upon exercise of options or warrants granted by
Mpath to its employees in the ordinary course of business).
(B) The "Exchange Ratio" shall be equal to the quotient obtained
by dividing (1) the number of the Total Consideration Shares
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by (2) the number of shares of RTI Common Stock outstanding or
subject to issuance upon exercise of RTI Options (as defined
in Section 2.1(d) below) and RTI Warrants (as defined in
Section 2.1(d) below) and upon conversion of all shares of RTI
Preferred Stock issued and outstanding, in each case
immediately prior to the Effective Time.
(iv) Notwithstanding any of the foregoing to the contrary, each
holder of RTI Preferred Stock may, at its option exercisable by notice given to
Mpath at least two (2) business days prior to the Closing Date, elect to reduce
the number of shares of Mpath Common Stock to which such holder would otherwise
be entitled pursuant to Section 2.1(c)(i) by that number of shares equal to the
quotient obtained by dividing (1) the dollar amount set forth next to such
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holder's name on Schedule 2.1(c)(i) of the RTI Disclosure Schedule (in each
case, the "Cash Payment") by (2) the average last sale price of Mpath's Common
Stock on the Nasdaq Stock Market for the twenty (20) trading day period ending
two (2) trading days prior to the Closing Date (the "Average Stock Price") and
receive in lieu thereof such Cash Payment. Any notice of election pursuant to
this subparagraph (iv) shall be delivered to Mpath in accordance with
Section 11.2 of this Agreement. In the event that no election from a holder of
RTI Preferred Stock shall be received by Mpath in accordance with the foregoing
within the prescribed period,
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such holder shall be deemed to have elected to receive all such holder's merger
consideration in the form of shares of Mpath Common Stock.
(v) In no event will the total number of shares of Mpath Common Stock
issuable by Mpath pursuant to the Merger (including shares of Mpath Common Stock
issuable upon exercise of RTI Options or RTI Warrants assumed by Mpath in the
Merger) exceed the Total Consideration Shares, nor shall the sum of all Cash
Payments exceed $1,250,000. The allocation of the Total Consideration Shares
among each holder of RTI capital stock, warrants and options based upon the
capitalization of RTI as of the date of this Agreement is set forth in
Schedule 2.1(c)(v) of the RTI Disclosure Schedule (which assumes that no holder
of RTI Preferred Stock elects to receive a Cash Payment). An updated version of
such Schedule reflecting the capitalization of RTI on the Closing Date shall be
delivered by RTI to Mpath on the Closing Date.
(vi) If, on or after the date of this Agreement and prior to the
Effective Time, the outstanding shares of Mpath Common Stock or RTI capital
stock shall have been changed into a different number of shares or a different
class by reason of any reclassification, split-up, stock dividend or stock
combination, then the Exchange Ratio shall be correspondingly adjusted. The
Exchange Ratio shall not change as a result of fluctuations in the market price
of Mpath Common Stock between the date of this Agreement and the Effective Time.
(vii) All such shares of RTI Common Stock and RTI Preferred Stock, when
so converted, shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the shares of Mpath Common Stock, and, in
the case of RTI Preferred Stock, the Cash Payment, if applicable, and any cash
in lieu of fractional shares of Mpath Common Stock to be issued or paid in
consideration therefor upon the surrender of such certificate in accordance with
Section 2.4, without interest.
(d) RTI Stock Options and Warrants. At the Effective Time, all then
------------------------------
outstanding options, whether vested or unvested ("RTI Options"), to purchase RTI
Common Stock issued under RTI's 1999 Stock Option Plan (the "RTI Option Plan")
and all outstanding warrants to purchase RTI capital stock ("RTI Warrants") that
by their terms survive the Closing will be assumed by Mpath in accordance with
Section 6.5. All of the RTI Options and all of the RTI Warrants issued and
outstanding as of the date of this Agreement are listed on Schedule 2.1(d)
attached hereto. An updated Schedule 2.1(d) reflecting RTI Options and RTI
Warrants on the Closing Date shall be delivered by RTI to Mpath on the Closing
Date.
(e) Restricted Shares. Any shares of RTI Common Stock which are
-----------------
subject to repurchase by RTI in the event the holder thereof ceases to be
employed by RTI ("RTI Restricted Shares") shall be converted into Mpath Common
Stock on the same basis as provided in subsection (c) above and shall be
registered in such holder's name, but shall be held
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by the Surviving Corporation or Mpath pursuant to the Stock Repurchase
Agreements. Holders of the RTI Restricted Shares are identified on Schedule
2.1(e) of the RTI Disclosure Schedule.
Section 2.2 Escrow Agreement. At the Effective Time or such later
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time as determined in accordance with Section 2.3(b), Mpath will, on behalf of
the holders of RTI Common Stock and RTI Preferred Stock, deposit in escrow
certificates representing twenty percent (20%) of the Total Consideration Shares
allocable to RTI Common Stock and RTI Preferred Stock in the Merger. Such shares
shall be held in escrow on behalf of the persons who are the holders of RTI
Common Stock or RTI Preferred Stock in the Merger immediately prior to the
Effective Time (the "Former RTI Stockholders"), in accordance with the portion
of Total Consideration Shares allocable to each such Former RTI Stockholder in
the manner contemplated by Section 2.1 ("Pro Rata Portion"). Such shares
(collectively, the "Escrow Shares") shall be held and applied pursuant to the
provisions of an escrow agreement (the "Escrow Agreement") to be executed
pursuant to Section 7.5. All calculations to determine the number of Escrow
Shares to be delivered by each stockholder of RTI into escrow as aforesaid shall
be rounded down to the nearest whole share.
Section 2.3 Dissenting Shares.
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(a) Notwithstanding any provision of this Agreement to the contrary,
any shares of RTI Common Stock or RTI Preferred Stock held by a holder who has
exercised such holder's appraisal rights in accordance with Section 262 of
Delaware Law, and who, as of the Effective Time, has not effectively withdrawn
or lost such appraisal rights ("Dissenting Shares"), shall not be converted into
or represent a right to receive Mpath Common Stock or the Cash Payment (if
applicable) pursuant to Section 2.1, but the holder of the Dissenting Shares
shall only be entitled to such rights as are granted by Delaware Law.
(b) Notwithstanding the provisions of Section 2.3(a), if any holder of
shares of RTI Common Stock or RTI Preferred Stock who demands his appraisal
rights with respect to such shares under Section 2.1 shall effectively withdraw
or lose (through failure to perfect or otherwise) his rights to receive payment
for such shares under Delaware Law, then, as of the later of the Effective Time
or the occurrence of such event, such holder's shares shall automatically be
converted into and represent only the right to receive Mpath Common Stock, the
Cash Payment, if applicable, and payment for fractional shares as provided in
Section 2.1(c), without interest, upon surrender of the certificate or
certificates representing such shares; provided that if such holder effectively
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withdraws or loses his right to receive payment for such shares after the
Effective Time, then, at such time Mpath will deposit in the escrow created
pursuant to the Escrow Agreement additional certificates representing such
holder's Pro Rata Portion of the Escrow Shares.
(c) RTI shall give Mpath (i) prompt notice of any written demands for
payment with respect to any shares of capital stock of RTI pursuant to the
appraisal rights under Delaware Law, withdrawals of such demands, and any other
instruments served pursuant to Delaware Law and received by the RTI and (ii) the
opportunity to participate at its own expense in all negotiations and
proceedings with respect to demands for appraisal rights under Delaware Law. RTI
shall
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not, except with the prior written consent of Mpath, voluntarily make any
payment with respect to any demands for appraisal rights with respect to RTI
Common Stock or RTI Preferred Stock or offer to settle or compromise any such
demands.
Section 2.4 Exchange of Certificates.
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(a) From and after the Effective Time, each holder of an outstanding
certificate or certificates ("Certificates") which represented shares of RTI
Common Stock or RTI Preferred Stock immediately prior to the Effective Time
shall have the right to surrender each Certificate to Mpath (or at Mpath's
option, an exchange agent to be appointed by Mpath), and receive promptly in
exchange for all Certificates held by such holder a certificate representing the
number of whole shares of Mpath Common Stock (other than the Escrow Shares) plus
the Cash Payment, if applicable, into which the RTI Common Stock or RTI
Preferred Stock evidenced by the Certificates so surrendered shall have been
converted pursuant to the provisions of Article II of this Agreement. The
surrender of Certificates shall be accompanied by duly completed and executed
Letters of Transmittal in the form mutually agreed upon by the parties hereto.
Until surrendered, each outstanding Certificate which prior to the Effective
Time represented shares of RTI Common Stock or RTI Preferred Stock shall be
deemed for all corporate purposes to evidence ownership of the number of whole
shares of Mpath Common Stock plus any Cash Payment, if applicable, into which
the shares of RTI Common Stock and RTI Preferred Stock have been converted but
shall, subject to applicable appraisal rights under Delaware Law, have no other
rights. Subject to applicable appraisal rights under Delaware Law, from and
after the Effective Time, the holders of shares of RTI Common Stock and RTI
Preferred Stock shall cease to have any rights in respect of such shares and
their rights shall be solely in respect of the Mpath Common Stock and the Cash
Payment, if applicable, into which such shares of RTI Common Stock or RTI
Preferred Stock have been converted. From and after the Effective Time, there
shall be no further registration of transfers on the records of RTI of shares of
RTI Common Stock and RTI Preferred Stock outstanding immediately prior to the
Effective Time.
(b) If any shares of Mpath Common Stock are to be issued in the name of
a person other than the person in whose name the Certificate(s) surrendered in
exchange therefor is registered, it shall be a condition to the issuance of such
shares that (i) the Certificate(s) so surrendered shall be transferable, and
shall be properly assigned, endorsed or accompanied by appropriate stock powers,
(ii) such transfer shall otherwise be proper and (iii) the person requesting
such transfer shall pay Mpath, or its exchange agent, any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of
Mpath that such taxes have been paid or are not required to be paid.
Notwithstanding the foregoing, neither Mpath nor RTI shall be liable to a holder
of shares of RTI Common Stock or RTI Preferred Stock for shares of Mpath Common
Stock or any Cash Payment issuable to such holder pursuant to the provisions of
Article II of this Agreement that are delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
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(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed, Mpath shall issue in exchange
for such lost, stolen or destroyed Certificate the shares of Mpath Common Stock
issuable in exchange therefor and pay the Cash Payment, if applicable, pursuant
to the provisions of Article II of the Agreement. The Board of Directors of
Mpath may in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificate to
provide to Mpath an indemnity agreement or bond against any claim that may be
made against Mpath with respect to the Certificate alleged to have been lost,
stolen or destroyed.
Section 2.5 Distributions with Respect to Unexchanged Shares. No
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dividends or other distributions declared or made after the Effective Time with
respect to Mpath Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Mpath Common Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.6 below
until the holder of record of such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing whole shares of Mpath Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Mpath Common Stock to which such holder
is entitled pursuant to Section 2.6 below and the amount of any dividends or
other distributions with a record date after the Effective Time previously paid
with respect to such whole shares of Mpath Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole shares of Mpath
Common Stock.
Section 2.6 No Fractional Shares. No certificate or scrip
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representing fractional shares of Mpath Common Stock shall be issued upon the
surrender for exchange of Certificates, and such fractional share interests will
not entitle the owner thereof to vote or to any rights of a stockholder of
Mpath. Notwithstanding any other provision of this Agreement, each holder of
shares of RTI Common Stock or RTI Preferred Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of Mpath Common Stock (after taking into account all Certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Mpath Common Stock multiplied
by the Average Stock Price.
Section 2.7 Tax and Accounting Consequences.
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(a) 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.
(b) It is intended by the parties hereto that the Merger shall qualify
for financial accounting treatment as purchase accounting.
-8-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF RTI
RTI represents and warrants to Mpath and Sub that the statements
contained in this Article III are true and correct, except as expressly set
forth in the disclosure schedule delivered by RTI to Mpath on or before the date
of this Agreement (the "RTI Disclosure Schedule"). The RTI Disclosure Schedule
shall be arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Article III.
Section 3.1 Organization of RTI. RTI is a corporation duly
-------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate power to own, lease and operate its
property and to carry on its business as now being conducted, and is duly
qualified or licensed to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of its business or
ownership or leasing of properties makes such qualification or licensing
necessary and where the failure to be so qualified or licensed would result in a
material adverse effect on the business, assets (including intangible assets),
liabilities, condition (financial or otherwise) or results of operations (a
"Material Adverse Effect") of RTI. The RTI Disclosure Schedule contains a true
and complete listing of the locations of all sales offices, development
facilities, and any other offices or facilities of RTI and a true and complete
list of all states in which RTI maintains any employees. The RTI Disclosure
Schedule contains a true and complete list of all states in which RTI is duly
qualified or licensed to transact business as a foreign corporation.
Section 3.2 RTI Capital Structure.
---------------------
(a) The authorized capital stock of RTI consists of 10,000,000 shares
of RTI Common Stock and 5,000,000 shares of Preferred Stock, of which 1,800,000
shares are designated as Series A Preferred Stock. As of the date of this
Agreement, there are (i) 3,582,565 shares of RTI Common Stock issued and
outstanding, all of which are validly issued, fully paid and nonassessable and
2,553,634 of which are subject to repurchase rights pursuant to agreements or
arrangements between the holder thereof and RTI, (ii) 1,250,000 shares of Series
A Preferred Stock issued and outstanding, all of which are validly issued, fully
paid and nonassessable, and each share of which is convertible into one share of
RTI Common Stock, (iii) RTI Warrants to purchase no shares of RTI's capital
stock; (iv) RTI Options to purchase up to 462,388 shares of RTI Common Stock;
(v) 1,800,000 shares of RTI Common Stock reserved for future issuance upon
conversion of the RTI Preferred Stock; and (vi) 521,000 shares of RTI Common
Stock reserved for issuance upon exercise of options available to be granted in
the future under the RTI Option Plan. The issued and outstanding shares of RTI
Common Stock and of RTI Preferred Stock are held of record by the stockholders
of RTI as set forth and identified on Schedule 3.2(a) of the RTI Disclosure
---------------
Schedule. The issued and outstanding RTI Options are held of record by the
option holders identified on, in the amounts and subject to the vesting
schedules set forth on, Schedule 3.2(a) of the RTI Disclosure Schedule. The
---------------
issued and outstanding RTI Warrants are held of record by the warrantholders as
set forth and identified on Schedule 3.2(a) of the RTI Disclosure Schedule. All
---------------
shares of RTI Common Stock subject to
-9-
issuance upon the exercise of RTI Options and RTI Warrants, upon issuance on the
terms and conditions (including payment) specified in the instrument pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. All outstanding shares of RTI Common Stock, RTI Preferred Stock
and outstanding RTI Options and RTI Warrants (collectively "RTI Securities")
were issued in compliance with applicable federal and state securities laws.
Except as set forth on Schedule 3.2(a) of the RTI Disclosure Schedule, there are
no obligations, contingent or otherwise, of RTI to repurchase, redeem or
otherwise acquire any shares of RTI Common Stock or RTI Preferred Stock or make
any investment (in the form of a loan, capital contribution or otherwise) in any
other entity. An updated Schedule 3.2(a) reflecting changes permitted by this
Agreement in the capitalization of RTI between the date hereof and the Effective
Time shall be delivered by RTI to Mpath on the Closing Date.
(b) Except as set forth in this Section 3.2 and corresponding Schedules
in the RTI Disclosure Schedule, there are no equity securities of any class or
series of RTI, or any security exchangeable into or exercisable for such equity
securities, issued, reserved for issuance or outstanding. Except as set forth in
this Section 3.2 and corresponding Schedules in the RTI Disclosure Schedule,
there are no options, warrants, equity securities, calls, rights, commitments or
agreements of any character to which RTI is a party or by which it is bound
obligating RTI to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock of RTI or obligating RTI to grant,
extend, accelerate the vesting of or enter into any such option, warrant, equity
security, call, right, commitment or agreement. RTI is not in active discussion,
formal or informal, with any person or entity regarding the issuance of any form
of additional RTI equity that has not been issued or committed to prior to the
date of this Agreement. Except as provided in this Agreement and the other
Transaction Documents (as defined in Section 3.3(a)) or any transaction
contemplated hereby or thereby, there are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the shares of capital
stock of RTI.
(c) All RTI Options have been issued in accordance with the terms of
the RTI Option Plan and pursuant to the standard forms of option agreement
previously provided to Mpath or its representatives. Except as set forth on
Schedule 3.2(c) of the RTI Disclosure Schedule, no RTI Option will by its terms
require an adjustment in connection with the Merger. Except as otherwise
contemplated by Section 6.5(b), neither the consummation of transactions
contemplated by this Agreement or the other Transaction Documents, nor any
action taken or to be taken by RTI in connection with such transactions will
result in (i) any acceleration of vesting in favor of any optionee under any RTI
Option; (ii) any additional benefits for any optionee under any RTI Option; or
(iii) the inability of Mpath after the Effective Time to exercise any right or
benefit held by RTI prior to the Effective Time with respect to any RTI Option
assumed by Mpath, including, without limitation, the right to repurchase an
optionee's unvested shares on termination of such optionee's employment. Except
as otherwise contemplated by Section 6.5(b), the assumption by Mpath of RTI
Options in accordance with Section 6.5 hereunder will not (i) give the optionees
additional benefits which they did not have under their options prior to such
assumption (after taking into account the existing provisions of the options,
such as their respective exercise prices and vesting schedules) or (ii)
constitute a breach of the RTI Plan or any agreement entered into pursuant to
such plan.
-10-
Section 3.3 Authority; No Conflict; Required Filings and Consents.
-----------------------------------------------------
(a) RTI has all requisite corporate power and authority to enter into
this Agreement and all Transaction Documents to which it is or will become a
party and to consummate the transactions contemplated by this Agreement and such
Transaction Documents. The execution and delivery of this Agreement and such
Transaction Documents and the consummation of the transactions contemplated by
this Agreement and such Transaction Documents have been duly authorized by all
necessary corporate action on the part of RTI, subject only to the approval of
the Merger by RTI's stockholders under the provisions of Delaware Law and RTI's
Certificate of Incorporation. This Agreement has been and such Transaction
Documents have been or, to the extent not executed by RTI as of the date hereof,
will be duly executed and delivered by RTI. This Agreement and each of the
Transaction Documents to which RTI is a party constitutes, and each of the
Transaction Documents to which RTI will become a party, when executed and
delivered by RTI, will constitute, assuming the due authorization, execution and
delivery by the other parties hereto and thereto, the valid and binding
obligation of RTI, enforceable against RTI in accordance with their respective
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought. For
purposes of this Agreement, "Transaction Documents" means all documents or
agreements required to be delivered by any party under this Agreement including
the Certificate of Merger, the Escrow Agreement, the Voting Agreements, the
Stockholders Agreements, the Stock Repurchase Agreements, the Investors' Rights
Agreement and the Noncompetition Agreements.
(b) The execution and delivery by RTI of this Agreement and the
Transaction Documents to which it is or will become a party does not, and the
consummation of the transactions contemplated by this Agreement and the
Transaction Documents to which it is or will become a party will not, (i)
conflict with, or result in any violation or breach of any provision of the
Certificate of Incorporation or Bylaws of RTI, (ii) result in any violation or
breach of, or constitute (with or without notice or lapse of time, or both) a
default (or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, contract or other
agreement, instrument or obligation to which RTI is a party or by which it or
any of its properties or assets may be bound, or (iii) conflict or violate any
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to RTI or any of its properties or
assets, except in the case of (ii) and (iii) for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which would not have a
Material Adverse Effect on RTI taken as a whole.
(c) None of the execution and delivery by RTI of this Agreement or of
any other Transaction Document to which RTI is or will become a party nor the
consummation of the transactions contemplated by this Agreement or such
Transaction Document will require any consent, approval, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality
-11-
("Governmental Entity"), except for (i) the filing of the Certificate of Merger
with the Delaware Secretary of State, (ii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws and (iii) such other consents,
authorizations, filings, approvals and registrations which are listed on
Schedule 3.3(c) of the RTI Disclosure Schedule.
Section 3.4 Financial Statements; Absence of Undisclosed Liabilities.
--------------------------------------------------------
(a) RTI has delivered to Mpath copies of RTI's unaudited balance sheet
as of August 31, 1999 (the "Most Recent Balance Sheet") and the related
unaudited statements of operations for the eight-month period then-ended
(together with the Most Recent Balance Sheet, the "RTI Interim Financials") and
RTI's unaudited balance sheet as of December 31, 1998, and the related unaudited
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1998 (collectively, the "RTI Financial Statements").
(b) The RTI Financial Statements are in accordance with the books and
records of RTI and present fairly in all material respects the financial
position, results of operations and cash flows of RTI as of their historical
dates and for the periods indicated. The RTI Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with prior periods ("GAAP"). The reserves, if any, reflected
on the RTI Financial Statements are adequate in light of the contingencies with
respect to which they were made.
(c) Except as set forth on Schedule 3.4(c) of the RTI Disclosure
Schedule, RTI has no material debt, liability, or obligation of any nature,
whether accrued, absolute, contingent, or otherwise, and whether due or to
become due that would be required to be reflected or reserved against in a
balance sheet prepared in accordance with GAAP, that is not reflected or
reserved against in the Most Recent Balance Sheet, except for those that may
have been incurred after the date of the Most Recent Balance Sheet, which were
incurred in the ordinary course of business and are not material both
individually and in the aggregate to RTI or its business.
Section 3.5 Tax Matters.
-----------
(a) For purposes of this Section 3.5 and other provisions of this
Agreement relating to Taxes, the following definitions shall apply:
(i) The term "Taxes" shall mean all taxes, however denominated,
including any interest, penalties or other additions to tax that may become
payable in respect thereof, (A) imposed by any federal, territorial, state,
local or foreign government or any agency or political subdivision of any such
government, which taxes shall include, without limiting the generality of the
foregoing, all income or profits taxes (including but not limited to, federal
income taxes and state income taxes), payroll and employee withholding taxes,
unemployment insurance, social security taxes, sales and use taxes, ad valorem
taxes, excise taxes, franchise taxes, gross receipts taxes, business license
taxes, occupation taxes, real and personal property taxes, stamp taxes,
-12-
environmental taxes, ozone depleting chemicals taxes, transfer taxes, workers'
compensation, Pension Benefit Guaranty Corporation premiums and other
governmental charges, and other obligations of the same or of a similar nature
to any of the foregoing, which are required to be paid, withheld or collected,
(B) any liability for the payment of amounts referred to in (A) as a result of
being a member of any affiliated, consolidated, combined or unitary group, or
(C) any liability for amounts referred to in (A) or (B) as a result of any
obligations to indemnify another person.
(ii) The term "Returns" shall mean all reports, estimates, declarations
of estimated tax, information statements and returns relating to, or required to
be filed in connection with, any Taxes, including information returns or reports
with respect to backup withholding and other payments to third parties.
(b) All Returns required to be filed prior to the date hereof by or on
behalf of RTI have been filed on a timely basis, and such Returns are true,
complete and correct in all material respects. All Taxes shown to be payable on
such Returns or on subsequent assessments with respect thereto, and all payments
of estimated Taxes required to be made prior to the date hereof by or on behalf
of RTI under Section 6655 of the Code or comparable provisions of state, local
or foreign law, have been paid in full on a timely basis or have been accrued on
the Most Recent Balance Sheet, and no other Taxes are payable by RTI with
respect to items or periods covered by such Returns (whether or not shown on or
reportable on such Returns). RTI has withheld and paid over all Taxes required
to have been withheld and paid over prior to the date hereof, and complied with
all information reporting and backup withholding requirements, including
maintenance of required records with respect thereto, in connection with amounts
paid or owing to any employee, creditor, independent contractor, or other third
party. There are no liens on any of the assets of RTI with respect to Taxes,
other than liens for Taxes not yet due and payable or for Taxes that RTI is
contesting in good faith through appropriate proceedings and for which
appropriate reserves have been established on the Most Recent Balance Sheet. RTI
has not at any time been (i) a member of an affiliated group of corporations
filing consolidated, combined or unitary income or franchise tax returns, or
(ii) a member of any partnership or joint venture for a period for which the
statute of limitations for any Tax potentially applicable as a result of such
membership has not expired.
(c) The amount of RTI's liability for unpaid Taxes (whether actual or
contingent) for all periods through the date of the Most Recent Balance Sheet
does not, in the aggregate, exceed the amount of the current liability accruals
for Taxes reflected on the Most Recent Balance Sheet, and the Most Recent
Balance Sheet reflects proper accrual in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods of all
liabilities for Taxes payable after the date of the Most Recent Balance Sheet
attributable to transactions and events occurring prior to such date. No
liability for Taxes has been incurred (or prior to Closing will be incurred)
since the date of the Most Recent Balance Sheet other than in the ordinary
course of business.
(d) Mpath has been furnished by RTI with true and complete copies of
(i) relevant portions of income tax audit reports, statements of deficiencies,
closing or other agreements
-13-
received by or on behalf of RTI relating to Taxes, and (ii) all federal and
state income or franchise tax Returns and state sales and use tax Returns for or
including RTI for all periods since the inception of RTI. RTI does not do
business in or derive income from any state other than states for which Returns
have been duly filed and furnished to Mpath.
(e) The Returns of or including RTI have never been audited by a
government or taxing authority, nor is any such audit in process, pending or, to
RTI's knowledge, threatened (either in writing or verbally, formally or
informally). No deficiencies exist or have been asserted (either in writing or
verbally, formally or informally), and RTI has not received notice (either in
writing or verbally, formally or informally) that it has not filed a Return or
paid Taxes required to be filed or paid. RTI is neither a party to any action or
proceeding for assessment or collection of Taxes, nor has such event been
asserted or threatened (either in writing or orally, formally or informally)
against RTI or any of its assets. No waiver or extension of any statute of
limitations is in effect with respect to Taxes or Returns of RTI. RTI has
disclosed on its federal and state income and franchise tax Returns all
positions taken therein that could give rise to a substantial understatement
penalty within the meaning of Code Section 6662 or comparable provisions of
applicable state, local, foreign or other tax laws.
(f) RTI has not been and will not be required to include any material
adjustment in Taxable income for any Tax period (or portion thereof) pursuant to
Section 481 or Section 263A of the Code or any comparable provision under state
or foreign Tax laws as a result of transactions, events or accounting methods
employed prior to the Closing.
(g) RTI is not, nor has it ever been, a party to any tax sharing
agreement.
(h) RTI is not, nor has it been, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code, and Mpath
is not required to withhold tax by reason of Section 1445 of the Code. RTI is
not a "consenting corporation" under Section 341(f) of the Code. RTI has not
entered into any compensatory agreements with respect to the performance of
services which payment thereunder would result in a nondeductible expense to RTI
pursuant to Section 280G of the Code or an excise tax to the recipient of such
payment pursuant to Section 4999 of the Code. RTI has not agreed to, nor is it
required to make any adjustment under Code Section 481(a) by reason of, a change
in accounting method. RTI is not, nor has it been, a "reporting corporation"
subject to the information reporting and record maintenance requirements of
Section 6038A and the regulations thereunder. RTI is in compliance with the
terms and conditions of any applicable tax exemptions, agreements or orders of
any foreign government to which it may be subject or which it may have claimed,
and the transactions contemplated by this Agreement will not have any adverse
effect on such compliance.
(i) The RTI Disclosure Schedule sets forth accurate and complete
information regarding RTI's net operating losses for federal and each applicable
state income tax purposes. Except as a result of the transactions contemplated
hereby, RTI has no net operating losses and credit carryovers or other tax
attributes currently subject to limitation under Sections 382, 383, or 384 of
the Code.
-14-
Section 3.6 Absence of Certain Changes or Events. Since December 31,
------------------------------------
1998, RTI has not:
(a) suffered any material adverse change in its business, assets
(including intangible assets), liabilities, condition (financial or otherwise)
or results of operations ("Material Adverse Change");
(b) suffered any damage, destruction or loss, whether covered by
insurance or not, that has resulted, or would result in a Material Adverse
Effect on RTI;
(c) granted or agreed to make any increase in the compensation payable
or to become payable by RTI to its officers or employees;
(d) declared, set aside or paid any dividend or made any other
distribution on or in respect of the shares of the capital stock of RTI or
declared any direct or indirect redemption, retirement, purchase or other
acquisition by RTI of such shares;
(e) except as set forth on Schedule 3.6(e) of the RTI Disclosure
Schedule, issued any shares of capital stock of RTI or any warrants, rights,
options or entered into any commitment relating to the shares of RTI, except for
the issuance of shares of RTI capital stock pursuant to the exercise of RTI
Options and RTI Warrants listed in the RTI Disclosure Schedule and the
conversion of outstanding RTI Preferred Stock;
(f) made any change in the accounting methods or practices it follows,
whether for general financial or tax purposes, or any change in depreciation or
amortization policies or rates adopted therein;
(g) sold, leased, abandoned or otherwise disposed of any real property
or any machinery, equipment or other operating property with an individual net
book value in excess of $5,000;
(h) sold, assigned, transferred, licensed or otherwise disposed of any
patent, trademark, trade name, brand name, copyright (or pending application for
any patent, trademark or copyright) invention, work of authorship, process,
know-how, formula or trade secret or interest thereunder or other intangible
asset;
(i) permitted or allowed any of its property or assets to be subjected
to any mortgage, deed of trust, pledge, lien, security interest or other
encumbrance of any kind (except those permitted under Section 3.7);
(j) made any capital expenditure or commitment individually in excess
of $10,000 or in the aggregate in excess of $50,000;
(k) paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets to, or entered into any agreement or arrangement
with, any of its Affiliates
-15-
(as defined in Section 3.16), officers, directors or stockholders or any
affiliate of any of the foregoing;
(l) made any amendment to or terminated any agreement which, if not so
amended or terminated, would be required to be disclosed on the RTI Disclosure
Schedule; or
(m) agreed to take any action described in this Section 3.6 or outside
of its ordinary course of business.
Section 3.7 Title and Related Matters. RTI has good and valid
-------------------------
title to all its properties, interests in properties and assets, real and
personal, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any kind or character, except the lien of current taxes not yet
due and payable and minor imperfections of and encumbrances on title, if any, as
do not materially detract from the value of or interfere with the present use of
the property affected thereby. The equipment of RTI used in the operation of its
business is, taken as a whole, (i) adequate for the business conducted by RTI as
of the date of this Agreement and (ii) in good operating condition and repair,
ordinary wear and tear excepted. All personal property leases to which RTI is a
party are valid, binding, enforceable against the parties thereto and in effect
in accordance with their respective terms. To the knowledge of RTI, 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.
Schedule 3.7 of the RTI Disclosure Schedule contains a description of all items
of personal property with an individual net book value in excess of $2,000 and
real property leased by RTI, describing its interest in said property. True and
correct copies of RTI's real property and personal property leases have been
provided to Mpath or its representatives.
Section 3.8 Proprietary Rights.
(a) RTI owns all right, title and interest in and to, or otherwise
possesses legally enforceable rights to use, all patents, copyrights,
technology, software, software tools, know-how, processes, trade secrets,
trademarks, service marks, trade names, Internet domain names and other
proprietary rights used in the conduct of RTI's business as conducted to the
date of this Agreement, including, without limitation, the technology,
information, databases, data lists, data compilations, and all proprietary
rights developed or discovered or used in connection with or contained in all
versions and implementations of RTI's World Wide Web sites (including
xxx.xxxxxxxxxx.xxx and the other domain names listed on Schedule 3.8 of the RTI
Disclosure Schedule) or any product which is being distributed or sold by RTI or
currently is under development by RTI (collectively, including such Web sites,
the "RTI Products"), free and clear of all liens, claims and encumbrances
(including without limitation licensing and distribution rights) (all of which
are collectively referred to as "RTI Proprietary Rights"). Schedule 3.8(a) of
the RTI Disclosure Schedule contains an accurate and complete (i) description of
all patents, trademarks (with separate listings of registered and unregistered
trademarks), trade names, Internet domain names and registered copyrights in or
related to the RTI Products or otherwise included in the RTI Proprietary Rights
and all applications and registration statements therefor, including the
jurisdictions in which each such RTI Proprietary Right has been issued or
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registered or in which any such application of such issuance and registration
has been filed, (ii) list of all licenses and other agreements with third
parties (the "Third Party Licenses") relating to any material patents,
copyrights, trade secrets, software, inventions, technology, know-how, processes
or other proprietary rights that RTI is licensed or otherwise authorized by such
third parties to use, market, distribute or incorporate in RTI Products (such
patents, copyrights, trade secrets, software, inventions, technology, know-how,
processes or other proprietary rights are collectively referred to as the "Third
Party Technology") and (iii) list of all licenses and other agreements with
third parties relating to any material information, compilations, data lists or
databases that RTI is licensed or otherwise authorized by such third parties to
use, market, disseminate distribute or incorporate in RTI Products. All of RTI's
patents, copyrights, trademarks, trade names or Internet domain name
registrations related to or in the RTI Products are valid and in full force and
effect, and consummation of the transactions contemplated by this Agreement will
not alter or impair any such rights. No claims have been asserted or threatened
against RTI (and RTI is not aware of any claims which are likely to be asserted
or threatened against RTI or which have been asserted or threatened against
others relating to RTI Proprietary Rights or RTI Products) by any person
challenging RTI's use, possession, manufacture, sale or distribution of RTI
Products under any RTI Proprietary Rights (including, without limitation, the
Third Party Technology) or challenging or questioning the validity or
effectiveness of any material license or agreement relating thereto (including,
without limitation, the Third Party Licenses) or alleging a violation of any
person's or entity's privacy, personal or confidentiality rights. None of the
RTI Products nor the use or exploitation of any RTI Proprietary Rights in RTI's
current business infringes on the rights of or constitutes misappropriation of
any proprietary information or intangible property right of any third person or
entity, including without limitation any patent, trade secret, copyright,
trademark or trade name, and except as set forth on Schedule 3.8(a) of the RTI
Disclosure Schedule, RTI has not been sued or named in any suit, action or
proceeding which involves a claim of such infringement, misappropriation or
unfair competition.
(b) RTI has not granted any third party any right to reproduce,
distribute, market or exploit any of the RTI Products or any adaptations,
translations, or derivative works based on the RTI Products or any portion
thereof. Except with respect to the rights of third parties to the Third Party
Technology, no third party has any express right to reproduce, distribute,
market or exploit any works or materials of which any of the RTI Products are a
"derivative work" as that term is defined in the United States Copyright Act,
Title 17, U.S.C. Section 101.
(c) All material designs, drawings, specifications, source code,
object code, scripts, documentation, flow charts, diagrams, data lists,
databases, compilations and information incorporating, embodying or reflecting
any of the RTI Products at any stage of their development (the "RTI Components")
were written, developed and created solely and exclusively by employees of RTI
without the assistance of any third party or entity or were created by third
parties who assigned ownership of their rights to RTI by means of valid and
enforceable confidentiality and invention assignment agreements, copies of which
have been delivered to Mpath. RTI has at all times used commercially reasonable
efforts to treat the RTI Proprietary Rights related to RTI Products and RTI
Components as containing trade secrets and has not
-17-
disclosed or otherwise dealt with such items in a manner intended or reasonably
likely to cause the loss of such trade secrets by release into the public domain
(d) To RTI's knowledge, no employee, contractor or consultant of
RTI is in violation in any material respect of any term of any
written employment contract, patent disclosure agreement or any
other written contract or agreement relating to the
relationship of any such employee, consultant or contractor
with RTI or, to RTI's knowledge, any other party because of the
nature of the business conducted by RTI or proposed to be
conducted by RTI. Schedule 3.8(c) of the RTI Disclosure
Schedule lists all employees, contractors and consultants who
have participated in any way in the development of any material
portion of the RTI Products or the RTI Proprietary Rights.
(e) Each person presently or previously employed by RTI (including
independent contractors, if any) with access authorized by RTI to confidential
information of RTI has executed a confidentiality and non-disclosure agreement
pursuant to the form of agreement previously provided to Mpath or its
representatives.
(f) No product liability or warranty claims have been communicated in
writing to or, to RTI's knowledge, threatened against RTI.
(g) To RTI's knowledge, there is no material unauthorized use,
disclosure, infringement or misappropriation of any RTI Proprietary Rights, or
any Third Party Technology to the extent licensed by or through RTI, by any
third party, including any employee or former employee of RTI. RTI has not
entered into any agreement to indemnify any other person against any charge of
infringement of any RTI Proprietary Rights.
(h) RTI has taken steps customary and reasonable in the industry to
protect and preserve the confidentiality and proprietary nature of all RTI
Proprietary Rights and other confidential information not otherwise protected by
patents, patent applications or copyright ("Confidential Information"). All use,
disclosure or appropriation by RTI or, to the knowledge of RTI, by another party
pursuant to rights granted to it by RTI, of Confidential Information owned by
RTI to a third party has been pursuant to the terms of a written agreement
between RTI and such third party. All use, disclosure or appropriation by RTI of
Confidential Information not owned by RTI has been pursuant to the terms of a
written agreement between RTI and the owner of such Confidential Information, or
is otherwise lawful.
Section 3.9 Employee Benefit Plans.
----------------------
(a) Schedule 3.9 of the RTI Disclosure Schedule lists, with respect to
RTI and any trade or business (whether or not incorporated) which is treated as
a single employer with RTI (an "ERISA Affiliate") within the meaning of Section
414(b), (c), (m) or (o) of the Code, (i) all employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (ii) each loan to a non-officer employee, loans to officers
and directors and any stock option, stock purchase, phantom stock, stock
appreciation right, supplemental retirement, severance, sabbatical, medical,
dental, vision care, disability, employee
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relocation, cafeteria benefit (Code Section 125) or dependent care (Code Section
129), life insurance or accident insurance plans, programs or arrangements,
(iii) all bonus, pension, profit sharing, savings, deferred compensation or
incentive plans, programs or arrangements, (iv) other fringe or employee benefit
plans, programs or arrangements that apply to senior management of RTI and that
do not generally apply to all employees, and (v) any current or former
employment or executive compensation or severance agreements, written or
otherwise, for the benefit of, or relating to, any present or former employee,
consultant or director of RTI as to which (with respect to any of items (i)
through (v) above) any potential liability is borne by RTI (together, the "RTI
Employee Plans").
(b) RTI has delivered to Mpath or its representatives a copy of each
of the RTI Employee Plans and related plan documents (including trust documents,
insurance policies or contracts, employee booklets, summary plan descriptions
and other authorizing documents, and, to the extent still in its possession, any
material employee communications relating thereto) and has, with respect to each
RTI Employee Plan which is subject to ERISA reporting requirements, provided
copies of any Form 5500 reports filed for the last three plan years. Any RTI
Employee Plan intended to be qualified under Section 401(a) of the Code has
either obtained from the Internal Revenue Service a favorable determination
letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has applied to the Internal Revenue Service for such a determination letter
prior to the expiration of the requisite period under applicable Treasury
Regulations or Internal Revenue Service pronouncements in which to apply for
such determination letter and to make any amendments necessary to obtain a
favorable determination. RTI has also furnished Mpath with the most recent
Internal Revenue Service determination letter issued with respect to each such
RTI Employee Plan, and nothing has occurred since the issuance of each such
letter which could reasonably be expected to cause the loss of the tax-qualified
status of any RTI Employee Plan subject to Code Section 401(a).
(c) (i) None of the RTI Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person; (ii) there has been no
"prohibited transaction," as such term is defined in Section 406 of ERISA and
Section 4975 of the Code, with respect to any RTI Employee Plan; (iii) each RTI
Employee Plan has been administered in accordance with its terms and in
compliance with the requirements prescribed by any and all statutes, rules and
regulations (including ERISA and the Code), and RTI and each subsidiary or ERISA
Affiliate have performed all material obligations required to be performed by
them under, are not in any material respect in default, under or violation of,
and have no knowledge of any material default or violation by any other party
to, any of the RTI Employee Plans; (iv) neither RTI nor any subsidiary or ERISA
Affiliate is subject to any liability or penalty under Sections 4976 through
4980 of the Code or Title I of ERISA with respect to any of the RTI Employee
Plans; (v) all contributions required to be made by RTI or any subsidiary or
ERISA Affiliate to any RTI Employee Plan have been made on or before their due
dates and a reasonable amount has been accrued for contributions to each RTI
Employee Plan for the current plan years; (vi) with respect to each RTI Employee
Plan, no "reportable event" within the meaning of Section 4043 of ERISA
(excluding any such event for which the thirty (30) day notice requirement has
been waived under the regulations to Section 4043 of ERISA) nor any event
described in Section 4062, 4063
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or 4041 of ERISA has occurred; and (vii) no RTI Employee Plan is covered by, and
neither RTI nor any subsidiary or ERISA Affiliate has incurred or expects to
incur any material liability under Title IV of ERISA or Section 412 of the Code.
With respect to each RTI Employee Plan subject to ERISA as either an employee
pension plan within the meaning of Section 3(2) of ERISA or an employee welfare
benefit plan within the meaning of Section 3(1) of ERISA, RTI has prepared in
good faith and timely filed all requisite governmental reports (which were true
and correct as of the date filed) and has properly and timely filed and
distributed or posted all notices and reports to employees required to be filed,
distributed or posted with respect to each such RTI Employee Plan. No suit,
administrative proceeding, action or other litigation has been brought, or to
the knowledge of RTI is threatened, against or with respect to any such RTI
Employee Plan, including any audit or inquiry by the IRS or United States
Department of Labor. Neither RTI nor any ERISA Affiliate is a party to, or has
made any contribution to or otherwise incurred any obligation under, any "multi-
employer plan" as defined in Section 3(37) of ERISA.
(d) With respect to each RTI Employee Plan, RTI has complied with (i)
the applicable health care continuation and notice provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the
proposed regulations thereunder, (ii) the applicable requirements of the Family
Leave Act of 1993 and the regulations thereunder, and (iii) the applicable
requirements of the Health Insurance Portability and Accountability Act of 1996
("HIPAA") and the temporary regulations thereunder.
(e) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or other service
provider of RTI or any other ERISA Affiliate to severance benefits or any other
payment (including, without limitation, unemployment compensation, golden
parachute or bonus), except as expressly provided in this Agreement, or (ii)
accelerate the time of payment or vesting of any such benefits, or (iii)
increase or accelerate any benefits or the amount of compensation due any such
employee or service provider.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by RTI or other ERISA Affiliate relating
to, or change in participation or coverage under, any RTI Employee Plan which
would materially increase the expense of maintaining such Plan above the level
of expense incurred with respect to that Plan for the most recent fiscal year
included in the RTI Financial Statements.
Section 3.10 Bank Accounts. Schedule 3.10 of the RTI Disclosure
-------------
Schedule sets forth the names and locations of all banks, trust companies,
savings and loan associations, and other financial institutions at which RTI
maintains accounts of any nature and the names of all persons authorized to draw
thereon or make withdrawals therefrom.
Section 3.11 Contracts.
---------
(a) Except as identified on Schedule 3.11(a) of the RTI Disclosure
Schedule.
(i) RTI has no agreements, contracts or commitments that provide for
the sale, licensing or distribution by RTI of any RTI Products or RTI
Proprietary Rights. Without
-20-
limiting the foregoing, except as set forth on the RTI Disclosure Schedule, RTI
has not granted to any third party (including, without limitation, original
equipment manufacturers ("OEMs") and site-license customers) any rights to
reproduce, manufacture or distribute any of the RTI Products, nor has RTI
granted to any third party any exclusive rights of any kind (including, without
limitation, exclusivity with regard to categories of advertisers on RTI's World
Wide Web site, territorial exclusivity or exclusivity with respect to particular
versions, implementations or translations of any of the RTI Products), nor has
RTI granted any third party any right to market any of the RTI Products under
any private label or "OEM" arrangements, nor has RTI granted any license of any
RTI trademarks or service marks.
(ii) Except as set forth on Schedule 3.8(a) of the RTI Disclosure
Schedule, RTI has no Third Party Licenses.
(iii) RTI has no agreements, contracts or commitments that call for
fixed and/or contingent payments or expenditures by or to RTI (including,
without limitation, any advertising or revenue sharing arrangement).
(iv) RTI has no outstanding sales or advertising contract, commitment
or proposal (including, without limitation, insertion orders, slotting
agreements or other agreements under which RTI has allowed third parties to
advertise on or otherwise be included in RTI's World Wide Web sites) that RTI
currently expects to result in any material loss to RTI upon completion or
performance thereof.
(v) RTI has no outstanding agreements, contracts or commitments with
officers, employees, agents, consultants, advisors, salesmen, sales
representatives, distributors or dealers that are not cancelable by RTI "at
will" and without liability, penalty or premium.
(vi) RTI has no employment, independent contractor or similar
agreement, contract or commitment that is not terminable on thirty (30) days'
notice or less without penalty, liability or premium of any type, including,
without limitation, severance or termination pay.
(vii) RTI has no currently effective collective bargaining or union
agreements, contracts or commitments.
(viii) RTI is not restricted by agreement from competing with any
person or from carrying on its business anywhere in the world.
(ix) RTI has not guaranteed any obligations of other persons or made
any agreements to acquire or guarantee any obligations of other persons.
(x) RTI has no outstanding loan or advance to any person; nor is it
party to any line of credit, standby financing, revolving credit or other
similar financing arrangement of any sort which would permit the borrowing by
RTI of any sum.
(xi) RTI has no agreements pursuant to which RTI has agreed to
manufacture for, supply to or distribute to any third party any RTI Products or
RTI Components.
-21-
True and correct copies of each document or instrument listed on the
RTI Disclosure Schedule have been provided to Mpath or its representatives.
(b) All of the contracts listed on Schedule 3.11(a) of the RTI
Disclosure Schedule are valid, binding, in full force and effect, and
enforceable by RTI in accordance with their respective terms. Except as
disclosed in Schedule 3.11(a) of the RTI Disclosure Schedule, no such contract
contains any liquidated damages, penalty or similar provision. To the knowledge
of RTI, no party to any such contract intends to cancel, withdraw, modify or
amend such contract, agreement or arrangement.
(c) RTI is not in default under or in breach or violation of, nor, to
RTI's knowledge, is there any valid basis for any claim of default by RTI under,
or breach or violation by RTI of, any material provision of any contract listed
on Schedule 3.11(a) of the RTI Disclosure Schedule. To RTI's knowledge, no other
party is in default under or in breach or violation of, nor is there any valid
basis for any claim of default by any other party under or any breach or
violation by any other party of, any such contract.
(d) Except as specifically indicated on Schedule 3.11(a) of the RTI
Disclosure Schedule, none of the contracts listed on Schedule 3.11(a) of the RTI
Disclosure Schedule provides for indemnification by RTI of any third party. No
claims have been made or threatened that would require indemnification by RTI,
and RTI has not paid any amounts to indemnify any third party as a result of
indemnification requirements of any kind.
Section 3.12 Compliance With Law. RTI has complied in all material
-------------------
respects with, is not in material violation of, and has not received any notices
of violation with respect to any federal, state or local statute, law or
regulation with respect to the conduct of its business or the ownership or
operation of its business.
Section 3.13 Labor Difficulties; No Discrimination.
-------------------------------------
(a) RTI is not engaged in any unfair labor practice and is not in
material violation of any applicable laws respecting employment
and employment practices, terms and conditions of employment,
and wages and hours. There is no unfair labor practice
complaint against RTI actually pending or, to the knowledge of
RTI, threatened before the National Labor Relations Board.
There is no strike, labor dispute, slowdown, or stoppage
actually pending or, to the knowledge of RTI, threatened
against RTI. To the knowledge of RTI, no union organizing
activities are taking place with respect to the business of
RTI. No grievance, nor any arbitration proceeding arising out
of or under any collective bargaining agreement is pending and,
to the knowledge of RTI, no claims therefor exist. No
collective bargaining agreement that is binding on RTI
restricts it from relocating or closing any of its operations.
RTI has not experienced any material work stoppage or other
material labor difficulty.
(b) There is and has not been any claim against RTI or its officers or
employees, or to RTI's knowledge, threatened against RTI or its officers or
employees, based on actual or alleged
-22-
race, age, sex, disability or other harassment or discrimination, or similar
tortious conduct, or based on actual or alleged breach of contract with respect
to any person's employment by RTI, nor, to the knowledge of RTI, is there any
basis for any such claim.
(c) There are no pending claims against RTI under any workers
compensation plan or policy or for long term disability. RTI has no material
obligations under COBRA with respect to any former employees or qualifying
beneficiaries thereunder. There are no proceedings pending or, to the knowledge
of RTI, threatened, between RTI and any of its employees, which proceedings have
had or would have a Material Adverse Effect on RTI.
Section 3.14 Insider Transactions. To the knowledge of RTI, no
--------------------
affiliate ("Affiliate") as defined in Rule 12b-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") of RTI has any interest in any
equipment or other property, real or personal, tangible or intangible of RTI,
including, without limitation, any RTI Proprietary Rights or any creditor,
supplier, customer, manufacturer, agent, representative, or distributor of RTI
Products; provided, however, that no such Affiliate or other person shall be
-------- -------
deemed to have such an interest solely by virtue of the ownership of less than
1% of the outstanding stock or debt securities of any publicly-held company, the
stock or debt securities of which are traded on a recognized stock exchange or
quoted on the Nasdaq Stock Market.
Section 3.15 Employees, Independent Contractors and Consultants.
--------------------------------------------------
Schedule 3.15 of the RTI Disclosure Schedule lists all past and all currently
effective written or oral consulting, independent contractor and/or employment
agreements and other material agreements concluded with individual employees,
independent contractors or consultants to which RTI is a party. True and correct
copies of all such written agreements have been provided to Mpath or its
representatives. All independent contractors have been properly classified as
independent contractors for the purposes of federal and applicable state tax
laws, laws applicable to employee benefits and other applicable law. All
salaries and wages paid by RTI are in compliance in all material respects with
applicable federal, state and local laws. Also shown on Schedule 3.15 of the RTI
Disclosure Schedule are the names, positions and salaries or rates of pay,
including bonuses, of all persons presently employed by RTI.
Section 3.16 Insurance. Schedule 3.16 of the RTI Disclosure
---------
Schedule contains a list of the principal policies of fire, liability and other
forms of insurance currently or previously held by RTI, and all claims made by
RTI under such policies. To the knowledge of RTI, RTI has not done anything,
either by way of action or inaction, that might invalidate such policies in
whole or in part. There is no claim pending under any of such policies or bonds
as to which coverage has been questioned, denied or disputed by the underwriters
of such policies or bonds. All premiums due and payable under all such policies
and bonds have been paid and RTI is otherwise in compliance with the terms of
such policies and bonds in all material respects. RTI has no knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.
Section 3.17 Litigation. There is no private or governmental
----------
action, suit, proceeding, claim, arbitration or investigation pending before any
agency, court or tribunal, foreign or
-23-
domestic, or, to the knowledge of RTI, threatened against RTI or any of its
properties or any of its officers or directors (in their capacities as such).
There is no judgment, decree or order against RTI, or, to the knowledge of RTI,
any of its directors or officers (in their capacities as such). To RTI's
knowledge, no circumstances exist that could reasonably be expected to result in
a claim against RTI as a result of the conduct of RTI's business (including,
without limitation, any claim of infringement of any intellectual property
right).
Section 3.18 Governmental Authorizations and Regulations. RTI has
-------------------------------------------
obtained each federal, state, county, local or foreign governmental consent,
license, permit, grant, or other authorization of a Governmental Entity (i)
pursuant to which RTI currently operates or holds any interest in any of its
properties or (ii) that is required for the operation of RTI's business or the
holding of any such interest, and all of such authorizations are in full force
and effect, except when the failure to obtain such authorization would have a
Material Adverse Effect.
Section 3.19 Subsidiaries. RTI has no Subsidiaries. RTI does not
------------
own or control (directly or indirectly) any capital stock, bonds or other
securities of, and does not have any proprietary interest in, any other
corporation, general or limited partnership, firm, association or business
organization, entity or enterprise, and RTI does not control (directly or
indirectly) the management or policies of any other corporation, partnership,
firm, association or business organization, entity or enterprise.
Section 3.20 Compliance with Environmental Requirements. RTI has
------------------------------------------
obtained all permits, licenses and other authorizations which are required under
federal, state and local laws applicable to RTI and relating to pollution or
protection of the environment, including laws or provisions relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, or hazardous or toxic materials, substances, or wastes into air,
surface water, groundwater, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic materials,
substances, or wastes or which are intended to assure the safety of employees,
workers or other persons, except where the failure to obtain such authorizations
would not have a Material Adverse Effect. RTI is in compliance in all material
respects with all material terms and conditions of all such permits, licenses
and authorizations. There are no conditions, circumstances, activities,
practices, incidents, or actions known to RTI which could reasonably be expected
to form the basis of any claim, action, suit, proceeding, hearing, or
investigation of, by, against or relating to RTI, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant, or hazardous or
toxic substance, material or waste, or relating to the safety of employees,
workers or other persons.
Section 3.21 Corporate Documents. RTI has furnished to Mpath or
-------------------
its representatives: (a) copies of its Certificate of Incorporation and Bylaws,
as amended to date; (b) its minute book containing consents, actions, and
meetings of the stockholders, the board of directors and any committees thereof;
(c) all material permits, orders, and consents issued by any regulatory agency
with respect to RTI, or any securities of RTI, and all applications for such
permits, orders, and consents; and (d) the stock transfer books of RTI setting
forth all transfers of any
-24-
capital stock. The corporate minute books, stock certificate books, stock
registers and other corporate records of RTI are complete and accurate, and the
signatures appearing on all documents contained therein are the true or
facsimile signatures of the persons purporting to have signed the same.
Section 3.22 No Brokers. Neither RTI nor, to RTI's knowledge, any
----------
RTI stockholder is obligated for the payment of fees or expenses of any broker
or finder in connection with the origin, negotiation or execution of this
Agreement or the other Transaction Documents or in connection with any
transaction contemplated hereby or thereby.
Section 3.23 RTI Action. The Board of Directors of RTI, by
----------
unanimous written consent or at a meeting duly called and held, has (i)
determined that the Merger is fair and in the best interests of RTI and its
stockholders, (ii) approved the Merger and this Agreement in accordance with the
provisions of Delaware Law, and (iii) directed that this Agreement and the
Merger be submitted to RTI stockholders for their approval and resolved to
recommend that RTI stockholders vote in favor of the approval of this Agreement
and the Merger.
Section 3.24 Offers. RTI has suspended or terminated, and has the
------
legal right to terminate or suspend, all negotiations and discussions of
Acquisition Transactions (as defined in Section 5.6) with parties other than
Mpath.
Section 3.25 Disclosure. No statements by RTI contained in this
----------
Agreement, its exhibits and schedules nor in any of the certificates or
documents, including any of the Transaction Documents, delivered or required to
be delivered by RTI to Mpath or Sub under this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances under which they were made.
Section 3.26 Disclosure to Stockholders. The information supplied
--------------------------
by RTI for inclusion in the solicitation of consent and information statement,
which shall include information regarding Mpath in connection with the issuance
of its securities in the Merger, to be sent to the stockholders of RTI (the "RTI
Stockholders Meeting") or in connection with any written consent of stockholders
of RTI (such solicitation of consent and information statement, as amended or
supplemented is referred to herein as the "Private Placement Memorandum") shall
not, on the date the Private Placement Memorandum is first mailed to RTI
stockholders, at the time of the RTI Stockholders Meeting, or written consent of
stockholders and at the Effective Time, contain any statement which is false or
misleading with respect to any material fact regarding RTI or its business, or
omit to state any material fact regarding RTI or its business necessary in order
to make the statements regarding RTI or its business made therein, in light of
the circumstances under which they are made, not false or misleading. Whenever
any event occurs which should be set forth in an amendment or supplement to the
Private Placement Memorandum RTI or Mpath, as the case may be, will promptly
inform the other of such occurrence and cooperate in making any appropriate
amendment or supplement, and/or mailing to stockholders of RTI, such amendment
or supplement. Notwithstanding the foregoing, RTI makes no representation,
warranty or covenant with respect to any information supplied by
-25-
Mpath or Sub which is contained in any of the foregoing documents, whether such
information is incorporated directly into the foregoing documents or forms the
basis for information provided by RTI.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MPATH AND SUB
Mpath and Sub jointly and severally represent and warrant to RTI that,
except as disclosed in a filing with the Securities and Exchange Commission (the
"Commission"), the statements contained in this Article IV are true and correct.
Section 4.1 Organization of Mpath and Sub. Each of Mpath and its
-----------------------------
Subsidiaries, including Sub, is a corporation duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation and has all requisite corporate power to own, lease and operate
its property and to carry on its business as now being conducted and is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the failure to be so qualified or licensed would have a
Material Adverse Effect on Mpath or Sub. The authorized capital stock of Sub
consists of 1,000 shares of Common Stock, all of which are issued and
outstanding, duly paid and nonassessable and are owned by Mpath free and clear
of all liens, charges and encumbrances.
Section 4.2 Capitalization .
--------------
(a) The authorized capital stock of Mpath consists of 150,000,000
shares of Common Stock, par value $0.00005 per share ("Mpath Common Stock"), and
5,000,000 shares of undesignated Preferred Stock, par value $0.00005 per share
("Mpath Preferred Stock"). As of August 27, 1999, there were (i) 22,333,710
shares of Mpath Common Stock issued and outstanding, all of which are validly
issued, fully paid and non-assessable, (ii) no shares of Mpath Preferred Stock
issued or outstanding, (iii) warrants to purchase 430,727 shares of Mpath Common
Stock at a weighted-average exercise price of $12.63 per share outstanding, and
(iv) options to purchase 2,971,912 shares of Mpath Common Stock at a
weighted-average exercise price of $7.94 per share outstanding. All outstanding
shares of Mpath Common Stock and outstanding options and warrants to purchase
shares of Mpath Common Stock or Mpath Preferred Stock were issued in compliance
with applicable federal and state securities laws.
Mpath shall deliver a certificate signed by the Chief Executive Officer
and the Chief Financial Officer of Mpath setting forth all changes in the
capitalization of Mpath between August 27, 1999 and the Effective Time shall be
delivered by Mpath to RTI on the Closing Date.
(b) The shares of Mpath's Common Stock to be issued pursuant to the
Merger will be duly authorized, validly issued, fully paid, and non-assessable.
Section 4.3 Authority; No Conflict; Required Filings and Consents.
-----------------------------------------------------
-26-
(a) Each of Mpath and Sub has all requisite corporate power and
authority to enter into this Agreement and the other Transaction Documents to
which it is or will become a party and to consummate the transactions
contemplated by this Agreement and such Transaction Documents. The execution and
delivery of this Agreement and such Transaction Documents and the consummation
of the transactions contemplated by this Agreement and such Transaction
Documents (other than the Investors' Rights Agreement which will be executed and
delivered as of the Closing Date) have been duly authorized by all necessary
corporate action on the part of Mpath and Sub. This Agreement has been and such
Transaction Documents have been or, to the extent not executed by Mpath or Sub
as of the date hereof, will be duly executed and delivered by Mpath and Sub.
This Agreement and each of the Transaction Documents to which Mpath or Sub is a
party constitutes, and each of the Transaction Documents to which Mpath or Sub
will become a party when executed and delivered by Mpath or Sub will constitute,
a valid and binding obligation of Mpath or Sub, enforceable by RTI against Mpath
or Sub, as the case may be, in accordance with their respective terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the enforcement
of creditors' rights generally and, except that the availability of the
equitable remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought.
(b) The execution and delivery by Mpath or Sub of this Agreement and
the Transaction Documents to which it is or will become a party does not, and
consummation of the transactions contemplated by this Agreement or the
Transaction Documents to which it is or will become a party will not, (i)
conflict with, or result in any violation or breach of any provision of the
Certificate of Incorporation or Bylaws of Mpath or Sub, (ii) result in any
violation or breach of, or constitute (with or without notice or lapse of time,
or both) a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which Mpath or Sub is a
party or by which either of them or any of their properties or assets may be
bound, or (iii) conflict or violate any permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Mpath or Sub or any of their properties or assets, except in the case of (ii)
and (iii) for any such conflicts, violations, defaults, terminations,
cancellations or accelerations which would not have a Material Adverse Effect on
Mpath and its Subsidiaries, taken as a whole.
(c) Neither the execution and delivery of this Agreement by Mpath or
Sub or the Transaction Documents to which Mpath or Sub is or will become a party
nor the consummation of the transactions contemplated hereby or thereby will
===
require any consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, except for (i) the filing
of the Certificate of Merger with the Delaware Secretary of State, (ii) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal and state securities laws
and the laws of any foreign country, and (iii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would have a Material Adverse Effect on Mpath and its Subsidiaries, taken
as a whole.
-27-
Section 4.4 Commission Filings; Financial Statements.
----------------------------------------
(a) Mpath has filed with the Commission and made available to RTI or
its representatives all forms, reports and documents required to be filed by
Mpath with the Commission since February 16, 1999 (collectively, the "Mpath
Commission Reports"). The Mpath Commission Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Act of 1933, as amended, (the "Securities Act"), and the Exchange
Act, as the case may be, and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such Mpath Commission Reports
or necessary in order to make the statements in such Mpath Commission Reports,
in the light of the circumstances under which they were made, not misleading.
(b) Each of the financial statements (including, in each case, any
related notes) contained in the Mpath Commission Reports, including any Mpath
Commission Reports filed after the date of this Agreement until the Effective
Time, complied or will comply as to form in all material respects with the
applicable published rules and regulations of the Commission with respect
thereto, was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-Q of the Commission) and fairly presented the consolidated financial
position of Mpath and its Subsidiaries as at the respective dates and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount or effect.
Section 4.5 Compliance with Laws. Mpath has complied with, is not
--------------------
in violation of, and has not received any notices of violation with respect to,
any federal, state or local statute, law or regulation with respect to the
conduct of its business, or the ownership or operation of its business, except
for failures to comply or violations which would not have a Material Adverse
Effect on Mpath and its Subsidiaries, taken as a whole.
Section 4.6 Interim Operations of Sub. Sub was formed by Mpath
-------------------------
solely for the purpose of engaging in the transactions contemplated by this
Agreement, has engaged in no other business activities and has conducted its
operations only as contemplated by this Agreement. Sub has no liabilities and,
except for a subscription agreement pursuant to which all of its authorized
capital stock was issued to Mpath, is not a party to any agreement other than
this Agreement.
Section 4.7 Stockholders Consent. No consent or approval of the
--------------------
stockholders of Mpath is required or necessary for Mpath to enter into this
Agreement or the Transaction Documents or to consummate the transactions
contemplated hereby and thereby.
Section 4.8 Disclosure. No statements by Mpath contained in this
----------
Agreement, its exhibits and schedules, or any of the certificates or documents,
including any of the Transaction Documents, required to be delivered by Mpath or
Sub to RTI under this Agreement contain any
-28-
untrue statement of material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances under which they were made. The information supplied by
Mpath for inclusion in the Private Placement Memorandum shall not, on the date
the Private Placement Memorandum is first mailed to RTI stockholders, at the
time of the RTI Stockholders Meeting or at the time of execution of a written
consent of stockholders in lieu of such meeting and at the Effective Time,
contain any statement which is false or misleading with respect to any material
fact, or admit to state any material fact necessary in order to make the
statement made therein, in light of the circumstances under which they were
made, not false or misleading.
Section 4.9 Absence of Undisclosed Liabilities. Mpath has no
----------------------------------
material debt, liability, or obligation of any nature, whether accrued,
absolute, contingent, or otherwise, and whether due or to become due, that is
not reflected or reserved against in the financial statements in the Mpath
Commission Reports, that would be required to be disclosed on any of Form 8K,
Form 10K or Form 10Q of the Commission (if any such form were being filed as of
the date of this Agreement or the Closing Date, as applicable), except for those
that may have been incurred after the date of the most recently filed Mpath
Commission Report containing financial statements, which were incurred in the
ordinary course of business and are not material both individually and in the
aggregate to Mpath or its business.
Section 4.10 Absence of Certain Changes or Events. Since August 5,
------------------------------------
1999, except as disclosed in the Mpath Commission Reports, there have been no
events, changes or occurrences which would be required to be disclosed on Form
8K, Form 10K or Form 10Q of the Commission (if any such form were being filed as
of the date of this Agreement or the Closing Date, as applicable) and which have
not been previously disclosed in the Mpath Commission Reports.
Section 4.11 Corporate Documents. Mpath has furnished to RTI or its
-------------------
representatives: copies of its Certificate of Incorporation and Bylaws, as
amended to date. The signatures appearing on all documents contained therein are
the true or facsimile signatures of the persons purporting to have signed the
same.
Section 4.12 No Brokers. Neither Mpath nor, to Mpath's knowledge,
----------
any Mpath stockholder is obligated for the payment of fees or expenses of any
broker or finder in connection with the origin, negotiation or execution of this
Agreement or the other Transaction Documents or in connection with any
transaction contemplated hereby or thereby.
Section 4.13 Disclosure to Stockholders. The information supplied
--------------------------
by Mpath for inclusion in the Private Placement Memorandum shall not, on the
date the Private Placement Memorandum is first mailed to RTI Stockholders, at
the time of the RTI Stockholders Meeting, or written consent of stockholders and
at the Effective Time, contain any statement which is false or misleading with
respect to any material fact regarding Mpath or its business, or omit to state
any material fact regarding Mpath or its business necessary in order to make the
statements regarding Mpath or its business made therein, in light of the
circumstances under which they are made, not false or misleading. Whenever any
event occurs which should be set forth in an
-29-
amendment or supplement to the Private Placement Memorandum, Mpath or RTI, as
the case may be, will promptly inform the other of such occurrence and cooperate
in making any appropriate amendment or supplement, and/or mailing to
stockholders of RTI, such amendment or supplement. Notwithstanding the
foregoing, Mpath makes no representation, warranty or covenant with respect to
any information supplied by RTI which is contained in any of the foregoing
documents, whether such information is incorporated directly into the foregoing
documents or forms the basis for information provided by RTI.
ARTICLE V
PRECLOSING COVENANTS OF MPATH AND RTI
Section 5.1 Approval of RTI Stockholders. Prior to the Closing
----------------------------
Date and at the earliest practicable date following the date hereof, RTI will
solicit written consents from its stockholders seeking, or hold a RTI
Stockholders Meeting for the purpose of seeking, approval of this Agreement, the
Merger and related matters. If RTI holds a stockholders' meeting, the Board of
Directors of RTI will solicit proxies from RTI's stockholders to vote such
stockholders' shares at the RTI Stockholders' Meeting. In soliciting such
written consent or proxies, the Board of Directors of RTI will recommend to the
stockholders of RTI that they approve this Agreement and the Merger and shall
use its reasonable efforts to obtain the approval of the stockholders of RTI
entitled to vote on or consent to this Agreement and the Merger in accordance
with Delaware Law and RTI's Certificate of Incorporation and Bylaws. RTI and
Mpath will prepare as soon as reasonably practicable the Private Placement
Memorandum in form and substance reasonably acceptable to both parties, with
respect to the solicitation of written consents and/or proxies from the
stockholders of RTI to approve this Agreement, the Merger and related matters.
The Private Placement Memorandum shall be in such form and contain such
information so as to permit compliance by Mpath with the requirements of
Regulation D under the Securities Act in connection with the issuance of shares
of Mpath Common Stock in the Merger and will comply in all material respects
with all applicable requirements of law and the rules and regulations
promulgated thereunder. The Private Placement Memorandum shall include as an
attachment an Investor Representation Statement, in substantially the form
attached hereto as Exhibit E (an "Investor Representation Statement"), to be
completed by each stockholder of RTI and delivered to Mpath for purposes of
confirming the availability of an exemption from registration under the
Securities Act for the issuance by Mpath of shares of Mpath Common Stock in the
Merger. Within two business days after the execution of this Agreement, the
parties will distribute the Private Placement Memorandum to the stockholders of
RTI. Whenever any event occurs which should be set forth in an amendment or
supplement to the Private Placement Memorandum, RTI or Mpath, as the case may
be, will promptly inform the other of such occurrence and cooperate in making
any appropriate amendment or supplement, and/or mailing to stockholders of RTI,
such amendment or supplement. The Private Placement Memorandum will include the
recommendation of the Board of Directors of RTI in favor of adoption and
approval of this Agreement and approval of the Merger.
Section 5.2 Advice of Changes. RTI will promptly advise Mpath in
-----------------
writing of any event known to RTI occurring subsequent to the date of this
Agreement which would render any
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representation or warranty of RTI contained in this Agreement, if made on or as
of the date of such event or the Closing Date, untrue or inaccurate in any
material respect.
Section 5.3 Operation of Business. During the period beginning
---------------------
with the date hereof and ending on the Closing Date, RTI shall conduct its
business only in the normal and ordinary course and use commercially reasonable
efforts to preserve its business organization intact, to retain the services of
its present employees and to preserve the goodwill of its customers and
suppliers. In addition, RTI will agree that without Mpath's prior written
consent (which consent shall not be unreasonably withheld or delayed) and during
such period, it will not:
(a) Except for the issuance of shares of capital stock of RTI upon
exercise or conversion of currently outstanding options, warrants or preferred
stock, issue or sell, or contract to issue or sell, any shares of capital stock
of RTI or any securities convertible into or exchangeable for shares of capital
stock of RTI or securities, warrants, options or rights to purchase any of the
foregoing (with the understanding of the parties being that in the period
beginning on the date hereof and ending on the Closing Date, RTI will be
permitted to issue to newly hired RTI employees a number of options to be
determined on terms, including exercise prices, mutually acceptable to Mpath and
RTI, with a view to causing such issuances to be done without the incurrence of
compensation expense and with the understanding that such issuances and option
grants of cash shall in no way affect the number of Total Consideration Shares
or the aggregate amount to be paid to the holders of RTI Preferred Stock, if
any);
(b) Incur any indebtedness for borrowed money other than in the
ordinary course of business;
(c) Purchase or redeem any shares of its capital stock or other
securities (other than repurchases done pursuant to existing restricted stock
agreements in connection with the termination of the employment of RTI employees
prior to the Closing);
(d) Declare or pay any dividends or agree to make any other
distribution with respect to any shares of its capital stock;
(e) Amend its Certificate of Incorporation or Bylaws;
(f) Increase the compensation of any officer, employee or agent of RTI,
create any additional employee benefit plan or amend any existing employee
benefit plan;
(g) Propose or enter into an agreement with any person, other than
Mpath, providing for the possible acquisition (whether by way of merger,
purchase of capital stock, purchase of assets or otherwise) of any material
portion of the capital stock or assets of another entity.
(h) Enter into any agreement in which the obligation of RTI exceeds
$25,000 or shall not terminate or be subject to termination for convenience
within 180 days following execution without Mpath's consent; or
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(i) Enter into any agreement not in the ordinary course of business; or
(j) Allow any intellectual property deadlines, registrations or
applications to lapse.
Section 5.4 Access to Information. RTI shall afford, and cause
---------------------
its affiliates, officers and agents to afford, to Mpath and its representatives
and agents full, complete and timely access to the properties, business,
personnel, and financial, legal, tax and other data and information of RTI as
reasonably requested by Mpath or its representatives or agents upon reasonable
prior notice; provided that such access occurs during regular business hours and
at such location or locations as the parties shall mutually agree upon and that
Mpath coordinates in advance with RTI the conduct of any examination to be
conducted during such access.
Section 5.5 Satisfaction of Conditions Precedent. RTI will use
------------------------------------
commercially reasonable efforts to satisfy or cause to be satisfied all the
conditions precedent which are set forth in Sections 8.1 and 8.2, and RTI will
use commercially reasonable efforts to cause the transactions contemplated by
this Agreement to be consummated, and, without limiting the generality of the
foregoing, to use commercially reasonable efforts to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties which may be necessary or reasonably required on its
part in order to effect the transactions contemplated by this Agreement. RTI
shall use commercially reasonable efforts to obtain any and all consents
necessary with respect to those contracts listed on Schedule 5.5 of the RTI
Disclosure Schedule required to consummate the Merger (the "Material Consents").
Section 5.6 Other Negotiations. Following the date hereof and
------------------
until termination of this Agreement pursuant to Section 9.1, RTI will not (and
it will not permit any of its officers, directors, employees, agents and
Affiliates on its behalf to) take any action to solicit, initiate, seek,
encourage or support any inquiry, proposal or offer from, furnish any
information to, or participate in any negotiations with, any corporation,
partnership, person or other entity or group (other than Mpath) regarding any
acquisition of RTI, any merger or consolidation with or involving RTI, or any
acquisition of any material portion of the assets of RTI, or any acquisition of
any capital stock of RTI, or any material license of RTI Proprietary Rights (any
of the foregoing being referred to in this Agreement as an "Acquisition
Transaction") or enter into an agreement concerning any Acquisition Transaction
with any party other than Mpath. If between the date of this Agreement and the
termination of this Agreement pursuant to Section 9.1, RTI receives from a third
party any offer or indication of interest regarding any Acquisition Transaction,
or any request for information regarding any Acquisition Transaction, RTI shall
(i) notify Mpath immediately (orally and in writing) of such offer, indication
of interest or request, including the identity of such party and the full terms
of any proposal therein, and (ii) notify such third party of RTI's obligations
under this Agreement (without any reference to Mpath). Notwithstanding the
foregoing, nothing in this Section 5.6 shall be construed to restrict the
ability of the RTI Board of Directors to take such actions in connection with
any proposed Acquisition Transactions that such Board reasonably determines in
good faith to be required to permit it to discharge properly its fiduciary
duties, provided that this qualification shall in no way affect the obligations
--------
of RTI and the RTI Board of Directors pursuant to Section 5.1.
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ARTICLE VI
PRECLOSING AND OTHER COVENANTS OF MPATH AND SUB
Section 6.1 Advice of Changes. Mpath and Sub will promptly advise
-----------------
RTI in writing of any event occurring subsequent to the date of this Agreement
which would render any representation or warranty of Mpath or Sub contained in
this Agreement, if made on or as of the date of such event or the Closing Date,
untrue or inaccurate in any material respect.
Section 6.2 Reservation of Mpath Common Stock. Mpath shall prior
---------------------------------
to the Effective Time reserve for issuance, out of its authorized but unissued
capital stock, the maximum number of shares of Mpath Common Stock as may be
issuable upon consummation of the Merger.
Section 6.3 Satisfaction of Conditions Precedent. Mpath and Sub
------------------------------------
will use commercially reasonable efforts to satisfy or cause to be satisfied all
the conditions precedent which are set forth in Sections 8.1 and 8.3, and Mpath
and Sub will use commercially reasonable efforts to cause the transactions
contemplated by this Agreement to be consummated, and, without limiting the
generality of the foregoing, to use commercially reasonable efforts to obtain
all consents and authorizations of third parties and to use commercially
reasonable efforts to make all filings with, and give all notices to, third
parties which may be necessary or reasonably required on its part in order to
effect the transactions contemplated hereby.
Section 6.4 Nasdaq National Market Listing. Mpath shall prior to
------------------------------
the Effective Time cause the shares of Mpath Common Stock issuable to the
stockholders of RTI in the Merger to be authorized for listing on the Nasdaq
National Market.
Section 6.5 Stock Options and Warrants.
--------------------------
(a) At the Effective Time, each outstanding RTI Option
under the RTI Option Plan, whether vested or unvested, shall be assumed by Mpath
and deemed to constitute an option (an "Mpath Option") to acquire the same
number of shares of Mpath Common Stock as the holder of such RTI Option would
have been entitled to receive pursuant to the Merger had such holder exercised
such option in full immediately prior to the Effective Time (rounded down to the
nearest whole number), at a price per share (rounded up to the nearest whole
cent) equal to (i) the aggregate exercise price for the shares of RTI Common
Stock otherwise purchasable pursuant to such RTI Option divided by (ii) the
number of full shares of Mpath Common Stock deemed purchasable pursuant to such
Mpath Option in accordance with the foregoing; provided, however, that, in the
-------- -------
case of any RTI Option to which Section 422 of the Code applies ("incentive
stock options"), the option price, the number of shares purchasable pursuant to
such option and the terms and conditions of exercise of such option shall be
determined in order to comply with Section 424(a) of the Code. In connection
with the assumption by Mpath of the RTI Options pursuant to this Section 6.5(a),
RTI shall be deemed to have assigned to Mpath, effective at the Effective Time,
RTI's right to repurchase unvested shares of RTI Common Stock issuable upon the
exercise of the RTI Options or previously issued upon the exercise of options
granted under the RTI Option Plan, in accordance with the terms of the RTI
Option Plan and the related stock option agreements and stock purchase
agreements entered into under the RTI
-33-
Option Plan. With respect to provisions regarding a change of control, all RTI
Options assumed by Mpath shall be subject to the same restrictions and shall be
treated no less favorably than options granted under Mpath's 1999 Stock
Incentive Plan.
(b) As soon as practicable after the Effective Time,
Mpath shall deliver to the participants in the RTI Option Plan appropriate
notice setting forth such participants' rights pursuant thereto and the grants
pursuant to the RTI Option Plan shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 6.5 after giving
effect to the Merger and except that the vesting schedule for any RTI Options
will be amended to provide that one third of all RTI Options shall have vested
as of the Closing Date and that the remaining two thirds of each optionholder's
RTI Options will vest equally in two annual installments on the first and second
anniversary of the Closing Date. Mpath shall comply with the terms of the RTI
Option Plan and the parties intend that, to the extent required by, and subject
to the provisions of, such RTI Option Plan and Sections 422 and 424(a) of the
Code, that RTI Options which qualified as incentive stock options prior the
Effective Time continue to qualify as incentive stock options after the
Effective Time, and this provision shall be interpreted consistent with that
intent. At or prior to the Effective Time, Mpath shall take all corporate action
necessary to reserve for issuance sufficient shares of Mpath Common Stock for
delivery upon exercise of RTI Options assumed by it in accordance with this
Section 6.5. Mpath shall file a registration statement on Form S-8 (or any
successor or other appropriate forms) on or promptly following the one year
anniversary of the Closing Date, with respect to the shares of Mpath Common
Stock subject to such options and shall use its reasonable efforts to maintain
the effectiveness of such registrations statements and maintain the current
status of the prospectus or prospectuses contained therein for so long as such
options remain outstanding.
(c) Mpath shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Mpath Common Stock for
delivery upon exercise of RTI Options assumed in accordance with this Section
6.5.
(d) Each RTI Warrant, to the extent outstanding at the
Effective Time, whether or not exercisable and whether or not vested at the
Effective Time, shall remain outstanding at the Effective Time. At the Effective
Time, RTI Warrants shall, by virtue of the Merger and without any further action
on the part of RTI or the holder of any of RTI Warrants (unless further action
may be required by the terms of any of RTI Warrants), be assumed by Mpath
pursuant to such documentation as is reasonably acceptable to RTI and each RTI
Warrant assumed by Mpath shall be exercisable upon the same terms and conditions
as under the applicable warrant agreements with respect to such RTI Warrants,
except that (A) each such RTI Warrant shall be exercisable for that whole number
of shares of Mpath Common Stock (rounded down to the nearest whole share) into
which the number of shares of RTI Common Stock subject to such RTI Warrant would
be converted under Section 2.1(c), and (B) the exercise price per share of Mpath
Common Stock shall be an amount equal to the exercise price per share of RTI
Common Stock subject to such RTI Warrant in effect immediately prior to the
Effective Time divided by the applicable Exchange Ratio (the exercise price per
share, so determined, being rounded to the nearest full cent). From and after
the Effective Time, all references to RTI in the warrant agreements underlying
RTI Warrants shall be deemed to refer to Mpath. Mpath further
-34-
agrees that, notwithstanding any other term of this Section 6.5(d) to the
contrary, if required under the terms of RTI Warrants or if otherwise
appropriate under the terms of RTI Warrants, it will execute a supplemental
agreement with the holders of RTI Warrants to effectuate the foregoing. No
payment shall be made for fractional shares. Mpath shall (i) on or prior to the
Effective Time, reserve for issuance the number of shares of Mpath Common Stock
that will become subject to warrants to purchase Mpath Common Stock ("Mpath
Warrants") pursuant to this Section 6.5(d), (ii) from and after the Effective
Time, upon exercise of the Mpath Warrants in accordance with the terms thereof,
make available for issuance all shares of Mpath Common Stock covered thereby and
(iii) as promptly as practicable following the Effective Time, issue to each
holder of an outstanding RTI Warrant a document evidencing the foregoing
assumption by Mpath.
Section 6.6 Registration of Shares Issued in the Merger. As soon
-------------------------------------------
as practicable following the date hereof, and prior to the Closing Date, Mpath
shall enter into the Fifth Amended and Restated Investors' Rights Agreement in
substantially the form attached as Exhibit G hereto (the "Investors' Rights
Agreement") with each of the RTI Stockholders and the other parties thereto
pursuant to which Mpath grants to each RTI Stockholder registration rights on
terms consistent with those granted to other stockholders of Mpath.
Section 6.7 Certain Employee Benefit Matters. From and after the
--------------------------------
Effective Time, employees of RTI at the Effective Time (each, an "RTI Employee")
will be provided with employee benefits by the Surviving Corporation or Mpath
which in the aggregate are no less favorable to such employees than those
provided from time to time by Mpath to its similarly situated employees. If any
employee of RTI becomes a participant in any employee benefit plan, program,
policy or arrangement of Mpath, such employee shall be given credit for all
service prior to the Effective Time with RTI to the extent permissible under
such plan, program, policy or arrangement. No RTI Employee as of the time of
Closing shall be required to relocate from Williamstown, Massachusetts in order
to continue their employment with RTI and Mpath following the Closing.
Section 6.8 Put Right. Following the Closing, each RTI Employee
---------
shall have the right (a "Put Right") to offer to Mpath up to such RTI Employee's
Pro Rata Portion of 200,000 shares of Mpath Common Stock and Mpath shall be
obligated to purchase such shares of Mpath Common Stock at a purchase price of
$10.00 per share. The RTI Employee must provide Mpath with five (5) business
days prior written notice of its intent to exercise such Put Right. In order to
exercise such Put Right, the RTI Employee shall be required to deliver written
notice thereof to Mpath at or prior to 5:00 p.m. California time on the second
anniversary of the Effective Time. Such Put Right may be exercised by each RTI
Employee at any time and from time to time prior to such second anniversary
date. Written notice shall be delivered for this purpose in accordance with
Section 11.2 hereof. Exercise of such right shall in all instances be subject to
any and all applicable state law restrictions on the ability of Mpath to make
such payments to its stockholders. If, on or after the date of this Agreement,
the outstanding shares of Mpath Common Stock shall have been changed into a
different number of shares or a different class by reason of any
reclassification, split-up, stock dividend or stock combination, then the number
of shares of
-00-
Xxxxx Xxxxxx Stock subject to the Put Right and the $10.00 per
share repurchase price shall be correspondingly adjusted.
ARTICLE VII
OTHER AGREEMENTS
Section 7.1 Confidentiality. Each party acknowledges that Mpath
---------------
and RTI have executed a Non-Disclosure Agreement dated August 23, 1999 (the
"Confidentiality Agreement"), which agreement shall continue in full force and
effect in accordance with its terms.
Section 7.2 No Public Announcement. Each of Mpath and RTI agrees
----------------------
that neither it nor any of their respective representatives, officers,
directors, agents, stockholder or affiliates shall make any public announcement
with respect to this Agreement or the transactions contemplated hereby, or
disclose the terms or existence of this Agreement to any third party prior to
the public announcement of the transactions contemplated hereby. All public
announcements with respect to this Agreement or the transactions contemplated
hereby will be made upon the mutual agreement of the parties and only after each
party has had the opportunity to review and comment on the proposed public
announcement.
Section 7.3 Regulatory Filings; Consents; Reasonable Efforts.
------------------------------------------------
Subject to the terms and conditions of this Agreement, RTI and Mpath shall use
their respective reasonable good faith efforts to (i) make all necessary filings
with respect to the Merger and this Agreement under the Exchange Act and
applicable blue sky or similar securities laws and obtain required approvals and
clearances with respect thereto and supply all additional information requested
in connection therewith; (ii) make merger notification or other appropriate
filings with federal, state or local governmental bodies or applicable foreign
governmental agencies and obtain required approvals and clearances with respect
thereto and supply all additional information requested in connection therewith;
(iii) obtain all consents, waivers, approvals, authorizations and orders
required in connection with the authorization, execution and delivery of this
Agreement and the consummation of the Merger; and (iv) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable.
Section 7.4 Further Assurances. Prior to and following the
------------------
Closing, each party agrees to cooperate fully with the other parties and to
execute such further instruments, documents and agreements and to give such
further written assurances, as may be reasonably requested by any other party to
better evidence and reflect the transactions described herein and contemplated
hereby and to carry into effect the intents and purposes of this Agreement.
Section 7.5 Escrow Agreement. On or before the Effective Time,
----------------
Mpath shall, and the parties hereto shall exercise their reasonable good faith
efforts to cause the Escrow Agent (as defined in Section 10.2) and the
Stockholders' Agents (as defined in Section 10.9), to enter into an Escrow
Agreement in substantially the form attached hereto as Exhibit F.
---------
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Section 7.6 FIRPTA. RTI shall, prior to the Closing Date, provide
------
Mpath with a properly executed Foreign Investment and Real Property Tax Act of
1980 ("FIRPTA") FIRPTA Notification Letter which states that shares of capital
stock of RTI do not constitute "United States real property interests" under
Section 897(c) of the Code, for purposes of satisfying Mpath's obligations under
Treasury Regulation Section 1.1445-2(c)(3). In addition, simultaneously with
delivery of such FIRPTA Notification Letter, RTI shall provide to Mpath, as
agent for RTI, a form of notice to the Internal Revenue Service in accordance
with the requirements of Treasury Regulation Section 1.897-2(h)(2), along with
written authorization for Mpath to deliver such notice form to the Internal
Revenue Service on behalf of RTI upon the Closing of the Merger.
Section 7.7 Blue Sky Laws. Mpath shall take such steps as may be
-------------
necessary to comply with the securities and blue sky laws of all jurisdictions
which are applicable to the issuance of the Mpath Common Stock in connection
with the Merger. RTI shall use its reasonable good faith efforts to supply
information to Mpath as may be necessary to comply with the securities and blue
sky laws of all jurisdictions which are applicable in connection with the
issuance of Mpath Common Stock in connection with the Merger.
Section 7.8 Other Filings. As promptly as practicable after the
-------------
date of this Agreement, RTI and Mpath will prepare and file any other filings
required under the Exchange Act, the Securities Act or any other Federal,
foreign or state securities or blue sky laws relating to the Merger and the
transactions contemplated by this Agreement (the "Other Filings"). The Other
Filings will comply in all material respects with all applicable requirements of
law and the rules and regulations promulgated thereunder. Whenever any event
occurs which is required to be set forth in an amendment or supplement to the
Other Filings, RTI or Mpath, as the case may be, will promptly inform the other
of such occurrence and cooperate in making any appropriate amendment or
supplement, and/or mailing to stockholders of RTI, such amendment or supplement.
ARTICLE VIII
CONDITIONS TO MERGER
Section 8.1 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Merger. The respective obligations of each party to this Agreement to effect the
------
Merger shall be subject to the satisfaction prior to the Closing Date of the
following conditions:
(a) Stockholder Approval. The stockholders of RTI
--------------------
entitled to vote on or consent to this Agreement and the Merger in accordance
with Delaware Law and RTI's Certificate of Incorporation, shall have approved
this Agreement and the Merger.
(b) Approvals. Other than the filing provided for by
---------
Section 1.2, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Entity shall have been filed, occurred or been obtained.
-37-
(c) 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 or regulatory
restraint or prohibition preventing the consummation of the Merger or limiting
or restricting the conduct or operation of the business of RTI by Mpath after
the Merger shall have been issued, nor shall any proceeding brought by a
domestic administrative agency or commission or other domestic Governmental
Entity or other third party, 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.
(d) Nasdaq. The shares of Mpath Common Stock to be issued in
------
the Merger shall have listed on the Nasdaq Stock Market.
Section 8.2 Additional Conditions to Obligations of Mpath and Sub.
-----------------------------------------------------
The obligations of Mpath and Sub to effect the Merger are subject to the
satisfaction of each of the following conditions, any of which may be waived in
writing exclusively by Mpath and Sub:
(a) Representations and Warranties. The representations
------------------------------
and warranties of RTI set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date, except for changes
contemplated by this Agreement; and Mpath shall have received a certificate
signed on behalf of RTI by the chief executive officer and the chief financial
officer of RTI to such effect.
(b) Performance of Obligations of RTI. RTI shall have
---------------------------------
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date; and Mpath shall have
received a certificate signed on behalf of RTI by the chief executive officer of
RTI to such effect.
(c) Blue Sky Laws. Mpath shall have received all state
-------------
securities or "Blue Sky" permits and other authorizations necessary to issue
shares of Mpath Common Stock pursuant to the Merger.
(d) Dissenting Stockholders. Holders of no more than 10%
-----------------------
of RTI's issued and outstanding capital stock as of the Closing shall have
elected to, or continue to have contingent rights to, exercise appraisal rights
under Delaware Law as to such shares.
(e) Escrow Agreement. The Escrow Agent and Stockholders'
----------------
Agents shall have executed and delivered to Mpath the Escrow Agreement and such
agreement shall remain in full force and effect.
(g) Ancillary Agreements. Each of the Stockholders
--------------------
Agreements, the Noncompetition Agreements and the Stock Repurchase Agreements
executed and delivered concurrently with the execution of this Agreement shall
remain in full force and effect.
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(h) Opinion of RTI's Counsel. Mpath shall have received
------------------------
an opinion dated the Closing Date of Xxxxxxx Xxxx LLP, counsel to RTI, in a form
mutually satisfactory to the parties.
(i) Approvals. All authorizations, consents (including
---------
the Material Consents), or approvals of, or notifications to any third party,
required by RTI's contracts, agreements or other obligations in connection with
the consummation of the Merger shall have occurred or been obtained.
(j) Board Resignations. RTI shall have received written
------------------
letters of resignation from the RTI Board of Directors from each of the current
members of such Board, in each case effective at the Effective Time.
(k) Securities Exemption. Each stockholder of RTI shall
--------------------
have executed and delivered to Mpath an Investor Representation Statement and,
based upon the information supplied in such Investor Representation Statement,
Mpath shall have reasonably concluded that the issuance of shares of Mpath
Common Stock shall be exempt from registration under the Securities Act pursuant
to Section 4(2) thereof and Regulation D promulgated thereunder.
Section 8.3 Additional Conditions to Obligations of RTI. The
-------------------------------------------
obligation of RTI to effect the Merger is subject to the satisfaction of each of
the following conditions, any of which may be waived, in writing, exclusively by
RTI:
(a) Representations and Warranties. The representations
------------------------------
and warranties of Mpath and Sub set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and (except to
the extent such representations speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, and RTI shall have received a
certificate signed on behalf of Mpath by the chief financial officer of Mpath to
such effect.
(b) Performance of Obligations of Mpath and Sub. Mpath
-------------------------------------------
and Sub shall have performed in all material respects all obligations required
to be performed by them under this Agreement at or prior to the Closing Date;
and RTI shall have received a certificate signed on behalf of Mpath by the chief
financial officer of Mpath to such effect.
(c) Registration Rights. Mpath and holders of at least
-------------------
two-thirds of Registrable Securities (as defined in the Investors' Rights
Agreement) shall have executed and delivered the Investors' Rights Agreement to
the RTI Stockholders.
(d) Escrow Agreement. The Escrow Agent and Mpath shall
----------------
have executed and delivered to RTI and the Stockholder's Agents the Escrow
Agreement and such agreement shall remain in full force and effect.
(e) Tax Opinion. RTI shall have received the opinion
-----------
dated the Closing Date of Xxxxxxx Xxxx LLP to the effect that the Merger will be
treated for federal income tax purposes as a tax-free reorganization within the
meaning of Section 368(a) of the Code. In
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rendering such opinion, counsel shall be entitled to rely upon, among other
things, reasonable assumptions as well as representations of Mpath, Sub and RTI.
(f) Opinion of Mpath's Counsel. RTI shall have received
--------------------------
an opinion dated the Closing Date of Venture Law Group, A Professional
Corporation, counsel to Mpath, in a form mutually satisfactory to the parties.
ARTICLE IX
TERMINATION AND AMENDMENT
Section 9.1 Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time:
(a) by mutual written consent of Mpath and RTI;
(b) by either Mpath or RTI, by giving written notice to
the other party, if a court of competent jurisdiction or other Governmental
Entity shall have issued a nonappealable final order, decree or ruling or taken
any other action, in each case having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger, except, if such party relying on
such order, decree or ruling or other action shall not have complied with its
respective obligations under Sections 5.5 or 6.3 of this Agreement, as the case
may be;
(c) by Mpath or RTI, by giving written notice to the
other party, if the other party is in material breach of any representation,
warranty, or covenant of such other party contained in this Agreement, which
breach shall not have been cured, if subject to cure, within 10 business days
following receipt by the breaching party of written notice of such breach by the
other party;
(d) by Mpath, by giving written notice to RTI, if the
Closing shall not have occurred on or before October 31, 1999 by reason of the
failure of any condition precedent under Section 8.1 or 8.2 (unless the failure
results primarily from a breach by Mpath of any representation, warranty, or
covenant of Mpath contained in this Agreement or Mpath's failure to fulfill a
condition precedent to closing or other default);
(e) by RTI, by giving written notice to Mpath, if the
Closing shall not have occurred on or before October 31, 1999 by reason of the
failure of any condition precedent under Section 8.1 or 8.3 (unless the failure
results primarily from a breach by RTI of any representation, warranty, or
covenant of RTI contained in this Agreement or RTI's failure to fulfill a
condition precedent to closing or other default); or
(f) by Mpath, by giving written notice to RTI, if the
required approvals of the stockholders of RTI contemplated by this Agreement
shall not have been obtained by reason of the failure to obtain the required
consents or votes upon a vote taken by written consent or at a meeting of
stockholders, duly convened therefor or at any adjournment thereof.
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Section 9.2 Effect of Termination. In the event of termination of
---------------------
this Agreement as provided in Section 9.1, this Agreement shall immediately
become void and there shall be no liability or obligation on the part of Mpath,
RTI, Sub or their respective officers, directors, stockholders or Affiliates,
except as set forth in Sections 7.1 and 9.3 and further except to the extent
that such termination results from the willful breach by any such party of any
of its representations, warranties or covenants set forth in this Agreement.
Section 9.3 Fees and Expenses.
-----------------
(a) Except as set forth in this Section 9.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the Merger is consummated.
(b) If the Merger is consummated, all legal, accounting,
investment banking, broker's and finder's fees and expenses incurred by RTI or
its stockholders in connection with the Merger shall be deemed expenses of RTI.
RTI will make arrangements for the payments of such fees acceptable to Mpath.
ARTICLE X
ESCROW AND INDEMNIFICATION
Section 10.1 Indemnification. From and after the Effective Time
---------------
and subject to the limitations contained in this Article X, the Former RTI
Stockholders will, severally and pro rata, in accordance with their Pro Rata
Portion, indemnify and hold Mpath harmless against (A) any loss, expense,
liability or other damage, including reasonable attorneys' fees, to the extent
of the amount of such loss, expense, liability or other damage that Mpath has
incurred by reason of the breach by RTI of any representation, warranty,
covenant or agreement of RTI contained in this Agreement that becomes known to
Mpath during the Regular Escrow Period (as defined in Section 10.4 below)
(collectively, "Regular Damages") and (B)(i) any money damages awarded to
Gateway 2000, Inc. ("Gateway") by a court of competent jurisdiction in
connection with a final and non-appealable judgment from such court holding that
the technology or any use thereof underlying RTI's U.S. Patent application
Serial Number 09/248,371 (the "RTI Patent") actually infringes U.S. Patent No.
U.S. 5,850,396 issued on December 15, 1998 to Gateway (the "Gateway Patent")
together with all litigation fees and expenses (including reasonable attorneys'
fees) associated with any lawsuit that results in any such final and
non-appealable judgement and (ii) fifty percent (50%) of any amount paid in
settlement of any lawsuit together with 50% of all litigation fees and expenses
(including reasonable attorneys' fees), in connection with any claim that the
RTI Patent infringes the Gateway Patent (the amounts referred to in this clause
(ii) and the foregoing clause (i) are collectively referred to as "Special IP
Damages"). Mpath, RTI and Sub acknowledge and agree, and the Former RTI
Stockholders, by their approval of this Agreement and their execution of the
Stockholders Agreement, agree that, notwithstanding anything to the contrary
contained in this Agreement or any other Transaction Document, (w) fifty percent
(50%) of any amount paid in settlement of any lawsuit together with 50% of all
litigation fees and expenses (including reasonable attorneys' fees), in
connection with any claim that the RTI Patent infringes the Gateway Patent shall
not constitute Special IP
-41-
Damages, (x) any amounts that Mpath or RTI may be required to pay in connection
with any license of the Gateway Patent and the rights associated therewith shall
not constitute Special IP Damages, (y) all costs, expenses, fees and all other
payments incurred or required to be paid in connection with the matters
described in clauses (ii) through (v) of Section 10.4 below shall not constitute
Special IP Damages and (z) the costs, expenses, fees or amounts referred in the
foregoing clauses (w), (x) and (y) shall not be indemnifiable under this Article
X or the Escrow Agreement and shall be paid by Mpath. Mpath, RTI and Sub
acknowledge and agree, and the Former RTI Stockholders, by their approval of
this Agreement and their execution of the Stockholders Agreement, agree that
notwithstanding anything to the contrary contained in this Agreement or any
other Transaction Document, such indemnification under this Article X shall be
the sole and exclusive remedy for any claim for Regular Damages or for Special
IP Damages, except for Regular Damages based upon a claim of fraud.
Section 10.2 Escrow Funds.
------------
(a) As security and the sole and exclusive recourse for the indemnities
in Section 10.1, as soon as practicable after the Effective Time, the Escrow
Shares shall be deposited with U.S. Bank Trust, National Association (or such
other institution selected by Mpath with the reasonable consent of RTI) as
escrow agent (the "Escrow Agent"), such deposit to constitute the Escrow Fund
(the "Escrow Fund") and to be governed by the terms set forth in this Article X
and in the Escrow Agreement.
(b) Notwithstanding the foregoing or anything to the contrary contained
in this Agreement or in any Transaction Document, (i) the indemnification
obligations of the Former RTI Stockholders pursuant to this Article X or
otherwise with respect to claims for Regular Damages shall be limited to fifty
percent (50%) of the Escrow Shares initially deposited with the Escrow Agent at
the Effective Time, and (ii) the indemnification obligations of the Former RTI
Stockholders pursuant to this Article X or otherwise with respect to claims for
Special IP Damages shall be limited to the amount and assets deposited and
present in the Escrow Fund.
(c) Notwithstanding the foregoing or anything to the contrary contained
in this Agreement or in any Transaction Document, Mpath shall not be entitled to
pursue any claims for indemnification under this Article X or otherwise against
the Former RTI Stockholders directly or personally, and the sole recourse of
Mpath shall be to make claims against the Escrow Fund in accordance with the
terms of this Article X and the Escrow Agreement, except for any Regular Damages
based upon a claim of fraud.
Section 10.3 Damage Threshold.
----------------
(a) Notwithstanding the foregoing, the Former RTI Stockholders shall
have no liability under Section 10.1 and Mpath may not receive any shares from
the Escrow Fund unless and until an Officer's Certificate or Certificates (as
defined in Section 10.5 below) for an aggregate amount of Mpath's Regular
Damages and Special IP Damages in excess of $100,000 has been delivered to the
Stockholders' Agents and to the Escrow Agent; provided, however, that after an
-------- -------
Officer's Certificate or Certificates for an aggregate of $100,000 in Regular
Damages and Special IP Damages has been delivered Mpath shall be entitled,
subject to the provisions of
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this Article X (including, without limitation, the provisions of Section 10.2),
to receive Escrow Shares equal in value to the full amount of Regular Damages
and/or Special IP Damages identified in such Officer's Certificate or
Certificates.
(b) Notwithstanding anything to the contrary in this Agreement, the
amount of any Regular Damages and/or Special IP Damages as applicable otherwise
due and/or payable to Mpath in connection with any claim for indemnification
under this Agreement shall be reduced (i) to the extent that Mpath actually
realizes, by reason of such Regular Damages and/or Special IP Damages (as
applicable), any tax benefit, and (ii) by any insurance proceeds actually
received by Mpath in respect thereof. Mpath shall use reasonable efforts to make
a claim for Regular Damages or Special IP Damages, as applicable, from any
available insurers prior to attempting to collect from the Escrow Fund. If Mpath
recovers any amount from any insurer after payment to Mpath out of the Escrow
Fund, of any Regular Damages and/or Special IP Damages suffered or incurred by
Mpath in respect of the matters to which such insurance payment relates, then
Mpath will promptly pay over to the Escrow Agent the amount so recovered, to the
extent not in excess of the amount previously paid to Mpath in respect of such
matter.
Section 10.4 Escrow Periods.
--------------
(a) The period during which any indemnification claims with respect to
Regular Damages are permitted to be made under this Article X and the Escrow
Agreement (such period referred to as the "Regular Escrow Period") shall
terminate upon the first anniversary date of the Closing Date.
(b) The period during which any indemnification claims with respect to
Special IP Damages are permitted to be made under this Article X and the Escrow
Agreement (such period referred to as the "Special Escrow Period") shall
terminate upon the earliest to occur of (i) the second anniversary date of the
Closing Date, (ii) the assignment to Mpath of the Gateway Patent pursuant to an
assignment agreement in substance and form reasonably satisfactory to Mpath and
its counsel, (iii) the license to Mpath of the Gateway Patent for a period of
the duration of the Gateway Patent pursuant to a license agreement in form and
substance reasonably satisfactory to Mpath and its counsel, (iv) the
declaration, pursuant to a final judgment (with all appeals exhausted) that the
Gateway Patent is invalid or that the RTI Patent does not infringe the Gateway
Patent, or (v) the receipt by Mpath of an executed certificate from the
registered owner of the Gateway Patent that such registered owner waives any and
all current and future claims of infringement of the Gateway Patent such
registered owner may have against Mpath or its subsidiaries or their respective
successors or the customers or licensees of Mpath, its subsidiaries or their
respective successors, provided such certificate is in form and substance
reasonably satisfactory to Mpath and its counsel. Each of Mpath, Sub and the
Surviving Corporation agree to use reasonable efforts to cause one of the
matters described in the foregoing clauses (ii) through (v) to occur as soon as
possible following the Effective Time, and Mpath, Sub and the Surviving
Corporation further agree to include the Stockholders' Agents in any meetings,
negotiations, settlements or proceedings relating to the matters described in
clauses (ii) through (v) of this Section 10.4.
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(c) Upon the termination of Regular Escrow Period, no Escrow Shares
shall be released from the Escrow Fund, unless the Special Escrow Period shall
have already terminated, in which case all Escrow Shares shall be released from
the Escrow Fund pursuant to Section 10.6 hereof.
(d) In the event that the Special Escrow Period shall terminate prior
to the termination of the Regular Escrow Period, fifty percent (50%) of the
Escrow Shares initially deposited with the Escrow Agent at the Effective Time,
less the number of escrow Shares previously released in respect of Special IP
Damages already paid, shall be released from the Escrow Fund pursuant to Section
10.6 hereof. In the event that the Special Escrow Period shall terminate after
the termination of the Regular Escrow Period, all of the remaining Escrow Shares
shall be released from the Escrow Fund pursuant to Section 10.6 hereof.
(e) Notwithstanding the foregoing, in the event that the Special Escrow
Period terminates prior to the Regular Escrow Period and at the end of the
Regular Escrow Period there exists unsatisfied claims (notice of which shall
have been given pursuant to Section 10.5 below) for Regular Damages that were
pending prior to expiration of the Regular Escrow Period, the Escrow Agent shall
retain in the Escrow Fund that number of Regular Damage Escrow Shares (as
defined below), which, in the reasonable judgment of Mpath, subject to the
objection of the Stockholders' Agents and the subsequent resolution of the
matter in the manner provided in Section 10.9, are necessary to satisfy any such
unsatisfied claims and such retained Regular Damage Escrow Shares (as defined
below) shall not be released until such claims have been finally resolved. For
purposes of this Section 10.4(e), the term "Regular Damage Escrow Shares" shall
mean those Escrow Shares that remain in the Escrow Fund immediately after giving
effect to the release of Escrow Shares contemplated in the first sentence of
Section 10.4(d).
(f) Notwithstanding the foregoing, in the event that the Special Escrow
Period ends after the Regular Escrow Period and at the end of the Special Escrow
Period there exists unsatisfied claims (notice of which shall have been given
pursuant to Section 10.5 below) for Special IP Damages that were pending prior
to expiration of the Special Escrow Period, the Escrow Agent shall retain in the
Escrow Fund that number of Escrow Shares, which, in the reasonable judgment of
Mpath, subject to the objection of the Stockholders' Agents and the subsequent
resolution of the matter in the manner provided in Section 10.9, are necessary
to satisfy any such unsatisfied claims and such retained Escrow Shares shall not
be released until such claims have been finally resolved by the delivery of a
joint certificate from Mpath and the Stockholders' Agents stating that such
lawsuit has been resolved and attaching the final and non-appealable judgment of
the Court.
Section 10.5 Claims Upon Escrow Fund.
-----------------------
(a) Upon receipt by the Escrow Agent on or before the last day of the
Regular Escrow Period of a certificate signed by any appropriately authorized
officer of Mpath (an "Officer's Regular Damages Certificate"):
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(i) Stating the aggregate amount of Mpath's Regular Damages
or an estimate thereof, in each case to the extent known or determinable at such
time; and
(ii) Specifying in reasonable detail the individual items
of such Regular Damages included in the amount so stated, the date each such
item was paid or properly accrued or arose, and the nature of the
misrepresentation, breach or claim to which such item is related, the Escrow
Agent shall, subject to the provisions of Sections 10.2, 10.3, 10.8 and 10.9
hereof and of the Escrow Agreement, deliver to Mpath out of the Escrow Fund, as
promptly as practicable, Escrow Shares having a value equal to such Regular
Damages, all in accordance with the Escrow Agreement and Section 10.7 below.
(b) Upon receipt by the Escrow Agent on or before the last day of the
Special Escrow Period of a certificate signed by any appropriately authorized
officer of Mpath (an "Officer's Special IP Damages Certificate") stating that a
lawsuit has been filed by Gateway with respect to the infringement of the
Gateway Patent by the RTI Patent and attaching a copy of the complaint filed
certified by the Clerk of the Court in which such complaint has been filed, the
Escrow Agent shall retain in the Escrow Fund that number of Escrow Shares,
which, in the reasonable judgment of Mpath, subject to the objection of the
Stockholders' Agents and the subsequent resolution of the matter in the manner
provided in Section 10.9, are necessary to satisfy any Special IP Damages that
may arise from such lawsuit, and such Escrow Shares, shall be retained by the
Escrow Agent in the Escrow Fund until such lawsuit shall have been finally
resolved, dismissed or the parties hereto otherwise agree, whereupon, if such
lawsuit shall have been decided in a manner adverse to the RTI Stockholders, the
Escrow Agent shall, subject to the provisions of Section 10.2, 10.3 10.8 and
10.9 hereof and of the Escrow Agreement, deliver to Mpath out of the Escrow Fund
Escrow Shares have a value equal to any such Special IP Damages. If any such
lawsuit shall be dismissed with prejudice, the Escrow Shares held in the Escrow
Fund Shall be distributed pursuant to Section 10.6 hereof.
(c) For purposes of this Agreement, the term "Officer's Certificate"
shall mean either an Officer's Special IP Damages Certificate or an Officer's
Regular Damages Certificate as the context may require.
Section 10.6 Final Release of Escrow Shares. All Escrow Shares
------------------------------
remaining in the Escrow Fund after (a) the satisfaction of all indemnification
claims pursuant to this Article X and the Escrow Agreement and (b) the
expiration of both the Regular Escrow Period and the Special Escrow Period shall
be distributed from the Escrow Fund to the Holders (as defined in the Escrow
Agreement) on a pro rata basis based upon their respective percentage interests
therein at the time or such distribution.
Section 10.7 Valuation. For the purpose of compensating Mpath for
---------
its Regular Damages or Special IP Damages, as applicable, pursuant to this
Agreement, the value per share of the Escrow Shares which shall be released to
Mpath in respect of a claim for Regular Damages or Special IP Damages shall be,
in each case, the Average Stock Price.
-45-
Section 10.8 Delivery of Officer's Certificate; Objections to
------------------------------------------------
Claims for Regular Damages. 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 Stockholders' Agents (as defined in Section 10.10 below). In
the case of delivery of an Officer's Regular Damages Certificate, for a period
of thirty (30) days after such delivery, the Escrow Agent shall make no delivery
of Escrow Shares pursuant to Section 10.5 unless the Escrow Agent shall have
received written authorization from the Stockholders' Agents to make such
delivery. After the expiration of such thirty (30) day period, the Escrow Agent
shall make delivery of the Escrow Shares in the Escrow Fund in accordance with
those provisions of Section 10.4 and Section 10.5 relating to claims for Regular
Damages, provided that no such delivery may be made if the Stockholders' Agents
--------
shall object in a written statement to the claim made in the Officer's Regular
Damages Certificate, and such statement shall have been delivered to the Escrow
Agent and to Mpath prior to the expiration of such thirty (30) day period.
Section 10.9 Resolution of Conflicts.
-----------------------
(a) In case the Stockholders' Agents shall so object in
writing to any claim or claims by Mpath made in any Officer's Certificate, Mpath
shall have thirty (30) days to respond in a written statement to the objection
of the Stockholders' Agents. If after such thirty (30) day period there remains
a dispute as to any claims, the Stockholders' Agents and Mpath shall attempt in
good faith for thirty (30) days to agree upon the rights of the respective
parties with respect to each of such claims. If the Stockholders' Agents and
Mpath 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 shall
distribute the Escrow Shares from the applicable Escrow Fund in accordance with
the terms of the memorandum.
(b) If no such agreement can be reached after good faith
negotiation, either Mpath or the Stockholders' Agents may, by written notice to
the other, 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 three arbitrators. Within fifteen (15) days
after such written notice is sent, Mpath (on the one hand) and the Stockholders'
Agents (on the other hand) shall each select one arbitrator, and the two
arbitrators so selected shall select a third arbitrator. The decision of the
arbitrators 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 in Section 10.4, the Escrow Agent shall be entitled
to act in accordance with such decision and make or withhold payments out of the
applicable Escrow Fund in accordance with such decision.
(c) Judgment upon any award rendered by the arbitrators
may be entered in any court having jurisdiction. Any such arbitration shall be
held in Santa Xxxxx County, California under the commercial rules then in effect
of the American Arbitration Association. The non-prevailing party to an
arbitration shall pay its own expenses, the fees of each arbitrator, the
administrative fee of the American Arbitration Association, and the expenses,
including,
-46-
without limitation, the reasonable attorneys' fees and costs, incurred by the
prevailing party to the arbitration.
Section 10.10 Stockholders' Agents.
--------------------
Xxxx Xxxxxx and Xxxxx xx Xxxxxxxxx shall be constituted and
appointed as agents (the "Stockholders' Agents") for and on behalf of the Former
RTI Stockholders to give and receive notices and communications, to authorize
delivery to Mpath of the Escrow Shares or other property from the applicable
Escrow Fund in satisfaction of claims by Mpath, 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 the Stockholders' Agents for the accomplishment of the foregoing.
All actions of the Stockholders' Agents shall be taken jointly, not
individually. Such agency may be changed by the holders of a majority in
interest of the Escrow Shares from time to time upon not less than ten (10)
days' prior written notice to Mpath. No bond shall be required of the
Stockholders' Agents, and the Stockholders' Agents shall receive no compensation
for services. Notices or communications to or from the Stockholders' Agents
shall constitute notice to or from each of the Former RTI Stockholders.
(b) The Stockholders' Agents shall not be liable for any
act done or omitted hereunder as Stockholders' Agent while acting in good faith,
and any act done or omitted pursuant to the advice of counsel shall be
conclusive evidence of such good faith. The Former RTI Stockholders shall
severally and pro rata, in accordance with their Pro Rata Portion, indemnify the
Stockholders' Agents and hold them harmless against any loss, liability or
expense incurred without gross negligence or bad faith on the part of the
Stockholders' Agents and arising out of or in connection with the acceptance or
administration of their duties hereunder under this Agreement or the Escrow
Agreement.
(c) The Stockholders' Agents shall have reasonable access
to information about RTI and Mpath and the reasonable assistance of RTI's and
Mpath's officers and employees for purposes of performing their duties and
exercising their rights under this Article X, provided that the Stockholders'
--------
Agents shall treat confidentially and not disclose any nonpublic information
from or about RTI or Mpath to anyone (except on a need to know basis to
individuals who agree to treat such information confidentially).
Section 10.11 Actions of the Stockholders' Agents. A decision, act,
-----------------------------------
consent or instruction of the Stockholders' Agents shall constitute a decision
of all of the Former RTI Stockholders for whom shares of Mpath Common Stock
otherwise issuable to them are deposited in the applicable Escrow Fund and shall
be final, binding and conclusive upon each such Former RTI Stockholder, and the
Escrow Agent and Mpath may rely upon any decision, act, consent or instruction
of the Stockholders' Agents as being the decision, act, consent or instruction
of each and every such Former RTI Stockholder. The Escrow Agent and Mpath 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 Stockholders'
Agents.
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Section 10.12 Claims. In the event Mpath becomes aware of a
------
third-party claim which Mpath believes may result in a demand against the Escrow
Fund, Mpath shall promptly notify the Stockholders' Agents of such claim, and
the Stockholders' Agents and the Former RTI Stockholders for whom shares of
Mpath Common Stock otherwise issuable to them are deposited in the Escrow Fund
shall be entitled, at their expense, to participate in any defense of such
claim. Mpath shall have the right in its sole discretion to settle any such
claim; provided, however, that Mpath may not effect the settlement of any such
-------- -------
claim without the consent of the Stockholders' Agents, which consent shall not
be unreasonably withheld. In the event that the Stockholders' Agents have
consented to any such settlement, the Stockholders' Agents shall have no power
or authority to object to the amount of any claim by Mpath against the Escrow
Fund for indemnity with respect to such settlement in the amount agreed to.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Survival of Representations and Covenants. All
-----------------------------------------
representations, warranties, covenants and agreements of RTI contained in this
Agreement shall survive the Closing and any investigation at any time made by or
on behalf of Mpath until the end of the Escrow Period. If Escrow Shares or other
assets are retained in the Escrow Fund beyond expiration of the period specified
in the Escrow Agreement, then (notwithstanding the expiration of such time
period) the representation, warranty, covenant or agreement applicable to such
claim shall survive until, but only for purposes of, the resolution of the claim
to which such retained Escrow Shares or other assets relate. All
representations, warranties, covenants and agreements of Mpath contained in this
Agreement shall terminate as of the Effective Time, provided that the covenants
--------
and agreements contained in Sections 6.5, 6.6, 6.7, 6.8, 6.9 and 9.3 shall
survive the Closing and shall continue in full force and effect.
Section 11.2 Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or two business days after being mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Mpath or Sub:
Mpath Interactive, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Fax No: (000) 000-0000
Telephone No: (000) 000-0000
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with a copy to:
Venture Law Group
A Professional Corporation
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Fax No: (000) 000-0000
Telephone No: (000) 000-0000
(b) if to RTI, to:
Resounding Technology, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxx 00, Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Fax No. (000) 000-0000
Telephone No. (000) 000-0000
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
Fax No: (000) 000-0000
Telephone No: (000) 000-0000
Section 11.3 Interpretation. When a reference is made in this
--------------
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. 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. Whenever the words "include,"
"includes" or "including" are used in this Agreement they shall be deemed to be
followed by the words "without limitation." Whenever the words "to the knowledge
of RTI" or "known to RTI" or similar phrases are used in this Agreement, they
mean to the actual knowledge, after reasonable inquiry, of Xxxx Xxxxxx and Xxxxx
xx Xxxxxxxxx and all other executive officers of RTI.
Section 11.4 Counterparts. This Agreement may be executed in two
------------
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
-49-
Section 11.5 Entire Agreement; No Third Party Beneficiaries. This
----------------------------------------------
Agreement (including the documents and the instruments referred to herein), the
Confidentiality Agreement, and the Transaction Documents (a) constitute the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and (b) are not intended to confer upon any person other than the parties hereto
(including without limitation any RTI employees) any rights or remedies
hereunder.
Section 11.6 Governing Law. This Agreement shall be governed and
-------------
construed in accordance with the laws of the State of Delaware without regard to
any applicable conflicts of law.
Section 11.7 Assignment. Neither this Agreement nor any of the
----------
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
Section 11.8 Amendment. This Agreement may be amended by the
---------
parties hereto, at any time before or after approval of matters presented in
connection with the Merger by the stockholders of RTI, but after any such
stockholder approval, no amendment shall be made which by law requires the
further approval of stockholders without obtaining such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
Section 11.9 Extension; Waiver. At any time prior to the Effective
-----------------
Time, the parties hereto may, to the extent legally allowed, (i) extend the time
for the performance of any of the obligations or the other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations or warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
Section 11.10 Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to injunctive relief to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
[Signature Page Follows]
-50-
IN WITNESS WHEREOF, Mpath, Sub and RTI have caused this Agreement and
Plan of Merger to be signed by their respective officers thereunto duly
authorized as of the date first written above.
MPATH INTERACTIVE, INC.
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
ITR ACQUISITION CORP.
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
RESOUNDING TECHNOLOGY, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------------
Title: CEO
-------------------------------------
EXHIBIT A
VOTING AGREEMENT
THIS VOTING AGREEMENT ("Agreement") is made and entered into as of
September 27, 1999, between Mpath Interactive, Inc. ("Mpath"), a Delaware
corporation, and the undersigned stockholder (the "Stockholder") of Resounding
Technology, Inc., a Delaware corporation ("Resounding").
RECITALS
A. Concurrently with the execution of this Agreement, Mpath, Resounding
and ITR Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of Mpath ("Merger Sub"), have entered into an Agreement and Plan of Merger (the
"Merger Agreement"), which provides for the merger (the "Merger") of Merger Sub
with and into Resounding and the conversion of each outstanding share of
Resounding's capital stock into shares of Mpath Common Stock.
B. As a condition to its willingness to enter into the Merger
Agreement, Mpath has requested that the Stockholder agree to certain matters
regarding the retention and voting of the Shares (as defined below) in
connection with the Merger.
AGREEMENT
The parties agree as follows:
1. Agreement to Retain Shares.
--------------------------
1.1 Transfer and Encumbrance. The Stockholder agrees not to
------------------------
transfer, sell, exchange, pledge or otherwise dispose of or encumber (in each
case, other than as a result of death) any of shares of capital stock of
Resounding owned or beneficially held by such Stockholder (the "Shares") or New
Shares, as defined in Section 1.2 below, or to make any offer or agreement
relating thereto, at any time prior to the Expiration Date. As used herein, the
term "Expiration Date" shall mean the earlier to occur of (i) such date and time
as the Merger shall become effective in accordance with the terms and provisions
of the Merger Agreement and, (ii) the date on which the Merger Agreement shall
be terminated in accordance with Section 9.1 thereof.
1.2 Additional Purchases. The Stockholder agrees that any
--------------------
shares of capital stock of Resounding that such Stockholder shall purchase or
with respect to which such Stockholder shall otherwise acquire beneficial
ownership after the execution of this Agreement and prior to the Expiration Date
(the "New Shares") shall be subject to the terms and conditions of this
Agreement to the same extent as if they were Shares.
-52-
2. Agreement to Vote Shares and Grant Proxy. At every meeting of
----------------------------------------
the Stockholders of Resounding called with respect to any of the following, and
on every action or approval by written consent of the Stockholders of Resounding
with respect to any of the following, the Stockholder agrees to vote the Shares
and any New Shares in favor of approval of the Merger Agreement and the Merger
and any matter that could reasonably be expected to facilitate the Merger,
including the manner in which the Escrow Fund under the Merger Agreement is to
be established as contemplated by Section 2.2 and Article X of the Merger
Agreement. The Stockholder further agrees not, directly or indirectly, to
solicit or encourage any offer from any party concerning the possible
disposition of all or any substantial portion of Resounding's business, assets
or capital stock. In the event Resounding's board of directors does not call a
meeting to approve the Merger, the Stockholder agrees to take all action
necessary to call a meeting to approve the Merger or to approve the Merger by
written consent. In order to effectuate the foregoing, the Stockholder does
hereby constitute and appoint Mpath, or any nominee of Mpath, with full power of
substitution, from the date hereof to the Expiration Date, as its true and
lawful proxy, for and in its name, place and stead, including the right to sign
its name (as stockholder) to any consent, certificate or other document relating
to Resounding, for the sole purpose of causing the Shares and any New Shares to
be voted in the manner contemplated by this Section 2. The parties acknowledge
that the proxy provided for here is irrevocable and coupled with an interest.
3. Representations, Warranties and Covenants of the Stockholder.
------------------------------------------------------------
The Stockholder represents, warrants and covenants to Mpath as follows:
3.1 Ownership of Shares. The Stockholder (together with such
-------------------
Stockholder's spouse, if applicable) is the sole beneficial and record owner and
holder of the Shares, which at the date hereof and at all times up until the
Expiration Date, will be free and clear of any liens, claims, options, charges,
security interests, equities, options, warrants, rights to purchase (including,
without limitation, restrictions on rights of disposition other than those
imposed by applicable securities laws), third party rights of any nature or
other encumbrances; and (ii) does not own any shares of capital stock of
Resounding other than the Shares.
3.2 Authority; Due Execution. The Stockholder has full power
------------------------
and authority to make, enter into and carry out the terms of this Agreement. The
Stockholder has duly executed and delivered this Agreement and (assuming the due
authorization, execution and delivery of this Agreement by Mpath) this Agreement
constitutes a valid and binding obligation of the Stockholder.
3. Representations, Warranties and Covenants of Mpath. Mpath
--------------------------------------------------
represents, warrants and covenants to the Stockholder as follows:
3.1 Due Authorization. This Agreement has been authorized by
-----------------
all necessary corporate action on the part of Mpath and has been duly executed
by a duly authorized officer of Mpath.
3.2 Validity; No Conflict. This Agreement constitutes the
---------------------
legal, valid and binding obligation of Mpath. Neither the execution of this
Agreement by Mpath nor the
-53-
consummation of the transactions contemplated hereby will result in a breach or
violation of the terms of any agreement by which Mpath is bound or by any
decree, judgment, order, law or regulation now in effect of any court or other
governmental body applicable to Mpath.
4. Termination. This Agreement shall terminate and shall have no
-----------
further force or effect as of the Expiration Date.
5. Miscellaneous.
-------------
5.1 Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
5.2 Binding Effect and Assignment. This Agreement and all of
-----------------------------
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
either of the parties without prior written consent of the other.
5.3 Amendments and Modification. This Agreement may not be
---------------------------
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.
5.4 Specific Performance; Injunctive Relief. The parties
---------------------------------------
here to acknowledge that Mpath will be irreparably harmed and that there will be
no adequate remedy at law for a violation of any of the covenants or agreements
of the Stockholder set forth herein. Therefore, it is agreed that, in addition
to any other remedies that may be available to Mpath upon any such violation,
Mpath shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to Mpath at law
or in equity.
5.5 Governing Law. This Agreement shall be governed by,
-------------
construed and enforced in accordance with, the internal laws of the State of
California as such laws are applied to contracts entered into and to be
performed entirely within California.
5.6 Entire Agreement. This Agreement contains the entire
----------------
understanding of the parties in respect of the subject matter hereof, and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
5.7 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
5.8 Effect of Headings. The section headings herein are for
------------------
convenience only and shall not affect the construction or interpretation of this
Agreement.
-54-
5.9 No Limitation on Actions of the Stockholder as Director.
-------------------------------------------------------
In the event the Stockholder is a director of Resounding, notwithstanding
anything to the contrary in this Agreement, nothing in this Agreement is
intended or shall be construed to require the Stockholder to take or in any way
limit any action that the Stockholder may take to discharge the Stockholder's
fiduciary duties as a director of Resounding.
[Signature Page Follows.]
-55-
IN WITNESS WHEREOF, the parties have caused this Voting
Agreement to be duly executed on the day and year first above written.
MPATH INTERACTIVE, INC.
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxxx
-------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
STOCKHOLDER
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxxxx Xxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxxx Xxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxx X. xx Xxxxxxxxx
--------------------------------------------
Name: Xxxxx X. xx Xxxxxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxx Xxxxxx
--------------------------------------------
Name: Xxxx Xxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
-------------------------------------
STOCKHOLDER
/s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------
-57-
STOCKHOLDER
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxx X. Gold
--------------------------------------------
Name: Xxxx X. Gold
-------------------------------------
STOCKHOLDER
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------
STOCKHOLDER
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Managing Diector
-------------------------------------
-58-
The Berkshires Management Company,
General Partner,
The Berkshires Capital Investors Fund
II, LP
STOCKHOLDER
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx, Managing Director
-------------------------------------
The Berkshires Management Company, GP
The Berkshires Capital Investor, LP
STOCKHOLDER
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------
-59-
EXHIBIT B
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of
September 27, 1999, by and between Mpath Interactive, Inc., a Delaware
corporation ("Mpath") and Name ("Individual"), an employee of Resounding
Technology, Inc. ("RTI").
RECITALS
A. RTI is engaged in the business of designing, developing, licensing
and marketing software solutions which enable the efficient transmission and
receipt of data between multiple devices over the Internet, currently
productized as interactive voice, but envisioned to include other media types
(the "Business").
B. Individual is a stockholder and an employee of RTI and has
confidential and proprietary information relating to the business and operation
of RTI.
C. Individual's covenant not to compete with Mpath, as reflected in
this Agreement, is an essential part of the transactions described in that
certain Agreement and Plan of Merger dated as of September 27, 1999 (the "Merger
Agreement"), among Mpath, ITR Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Mpath ("Sub"), and RTI, whereby Sub will be merged
with and into RTI (the transactions contemplated by the Merger Agreement are
referred to hereinafter as the "Merger").
D. As a condition to its willingness to enter into the Merger
Agreement, Mpath has required that Individual agree, and Individual has agreed,
to the noncompetition and nonsolicitation covenants and the confidentiality
agreements provided in this Agreement.
E. References to Mpath hereinafter shall include all subsidiaries of
Mpath and shall include RTI which is the surviving corporation in the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and to induce Mpath
to consummate the transactions contemplated by the Merger Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Individual hereby covenants and agrees as follows:
1. Noncompetition.
--------------
(a) Individual and Mpath agree that due to the nature of
Individual's employment with RTI, Individual has confidential and proprietary
information relating to the
-60-
business and operations of RTI. Individual acknowledges that such information is
of importance to the Business and will continue to be so after the Merger and
that disclosure of such confidential information to others or the unauthorized
use of such information by others would cause substantial loss and harm to RTI
and, following the Merger, Mpath.
(b) During the period which shall commence at the Effective
Time and shall terminate on the second anniversary of the Effective Time (such
period, the "Restricted Period"), Individual shall not (i) enter into or
participate in the Business, or (ii) directly or indirectly (including without
limitation, through any Affiliate (as defined below) of Individual), own,
manage, operate, control or otherwise engage or participate in, or be connected
as an owner, partner, principal, creditor, salesman, guarantor, advisor, member
of the board of directors of, employee of or consultant in (A) the companies
listed on Exhibit A or any of their respective controlled Affiliates to the
---------
extent that Individual's relationship with, employment by or participation with
such companies shall relate to or concern the Business, or (B) any entity or
business, or any division, group, or other subset of any business, devoting 20%
or more of its resources to engaging in or developing a business competitive
with the Business or generating 20% or more of its gross revenues or earnings
from a business competitive with the Business.
(c) Notwithstanding the foregoing provisions of Section 1(b)
and the restrictions set forth therein, Individual may own securities in any
publicly held corporation that is covered by the restrictions set forth in
Section 1(b), but only to the extent that Individual does not own, of record or
beneficially, more than 1% of the outstanding beneficial ownership of such
corporation.
(d) The restrictions set forth in Section 1(b) shall apply
worldwide (the "Business Area").
(e) "Affiliate" as used herein, means, with respect to any
person or entity, any person or entity directly or indirectly controlling,
controlled by or under direct or indirect common control with such other person
or entity.
2. Nonsolicitation of Mpath Employees. During the Restricted
----------------------------------
Period, Individual shall not, without the prior written consent of Mpath,
directly or indirectly (including without limitation, through any Affiliate of
Individual), solicit, request, cause or induce any person who is at the time, an
employee of or a consultant of Mpath to leave the employ of or terminate such
person's relationship with Mpath.
3. Nonsolicitation of Customers. During the Restricted Period,
----------------------------
Individual shall not, directly or indirectly (including without limitation,
through any Affiliate of Individual) (i) solicit, induce or attempt to induce
any customer of Mpath, including but not limited to any customer of RTI that was
a customer of Mpath or RTI while the Individual was an employee of Mpath or RTI,
as the case may be, or during the Restricted Period, to cease doing business in
whole or in part with Mpath with respect to the Business; (ii) attempt to limit
or interfere with any business agreement or relationship existing between Mpath
and/or its Affiliates with any third party; or (iii) make materially false
statements, or take intentional actions, which are intended to disparage the
business reputation of Mpath (or its management team) or take any intentional
actions which
-61-
are intended to result in material harm to Mpath's goodwill with its customers,
content providers, bandwidth or other network infrastructure providers, vendors,
employees, the media or the public.
4. Confidentiality. Prior to the Effective Time, Individual will
---------------
execute Mpath's standard employee proprietary information and inventions
agreement in the form attached hereto as Exhibit B.
---------
5. Stay of Time. In the event that either party shall request a
------------
court of competent jurisdiction (collectively a "Court") or other entity or
person mutually selected by the parties to determine whether the Individual has
violated the provisions of this Agreement, the running of the time period of
such provisions so violated shall be automatically suspended as of the date of
such violation and shall resume on the date of the final order or remedy that
the Court or other entity or person rules or determines that such violation
occurred.
6. Injunctive Relief. The remedy at law for any breach of this
-----------------
Agreement is and will be inadequate, and in the event of a breach or threatened
breach by Individual of the provisions of Sections 1, 2 or 3 of this Agreement,
RTI and Mpath shall be entitled to seek an injunction restraining Individual
from the conduct which would constitute a breach of this Agreement. Nothing
herein contained shall be construed as prohibiting RTI or Mpath from pursuing
any other remedies available to it or them for such breach or threatened breach,
including, without limitation, the recovery of damages from Individual.
7. Separate Covenants. This Agreement shall be deemed to consist
------------------
of a series of separate covenants, one for each line of business carried on by
the Business and each county, state, country or other region included within the
Business Area. The parties expressly agree that the character, duration and
geographical scope of this Agreement are reasonable in light of the
circumstances as they exist on the date upon which this Agreement has been
executed. However, should a determination nonetheless be made by a court of
competent jurisdiction at a later date that the character, duration or
geographical scope of this Agreement is unreasonable in light of the
circumstances as they then exist, then it is the intention and the agreement of
Individual that this Agreement shall be construed by the court in such a manner
as to impose only those restrictions on the conduct of Individual that are
reasonable in light of the circumstances as they then exist and as are necessary
to assure RTI and Mpath of the intended benefit of this Agreement. If, in any
judicial proceeding, a court shall refuse to enforce all of the separate
covenants deemed included herein because, taken together, they are more
extensive than necessary to assure Mpath of the intended benefit of this
Agreement, it is expressly understood and agreed among the parties hereto that
those of such covenants that, if eliminated, would permit the remaining separate
covenants to be enforced in such proceeding shall, for the purpose of such
proceeding, be deemed eliminated from the provisions hereof.
8. Severability. If any of the provisions of this Agreement shall
------------
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar
-62-
as the laws of that state, country or jurisdiction are concerned, as not
containing the provision or provisions contravening or invalid under the laws of
that state or jurisdiction, and the rights and obligations created hereby shall
be construed and enforced accordingly.
9. Construction. This Agreement shall be construed and enforced
------------
in accordance with and governed by the laws of the State of Massachusetts,
without regard to principles of conflicts or choice of laws; provided, however,
that with respect to activities occurring in a particular jurisdiction, the law
of such jurisdiction shall apply solely to the extent it results in the greatest
enforcement of the terms of this Agreement.
10. Amendments and Waivers. This Agreement may be modified only by
----------------------
a written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No waiver
of any right hereunder shall operate as a waiver of any other right or of the
same or a similar right on another occasion.
11. Entire Agreement. This Agreement, together with the Merger
----------------
Agreement and the ancillary documents executed in connection therewith, contains
the entire understanding of the parties relating to the subject matter hereof,
supersedes all prior and contemporaneous agreements and understandings relating
to the subject matter hereof and shall not be amended except by a written
instrument signed by each of the parties hereto.
12. Counterparts. This Agreement may be executed by the parties in
------------
separate counterparts, each of which, when so executed and delivered, shall be
an original, but all of which, when taken as a whole, shall constitute one and
the same instrument.
13. Section Headings. The headings of each Section, subsection or
----------------
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.
14. Assignment. Neither this Agreement nor any right, remedy,
----------
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties; provided, however, that Mpath and RTI may
assign their rights hereunder, without the consent of Individual, to any entity
that acquires or succeeds to the Business.
15. Further Assurances. From time to time, at Mpath's request and
------------------
without further consideration, Individual shall execute and deliver such
additional documents and take all such further action as reasonably requested by
RTI or Mpath to be necessary or desirable to make effective, in the most
expeditious manner possible, the terms of this Agreement.
16. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed given if delivered personally or two business
days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
-63-
(a) if to Mpath:
Mpath Interactive, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
with a copy to:
Venture Law Group
A Professional Corporation
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
(b) if to Individual:
to the address set forth below the name of Individual
on the signature page hereof.
17. Effectiveness. Notwithstanding any other provision of this
-------------
Agreement, this Agreement shall become effective only upon the Effective Time,
and if such Effective Time shall not occur prior to the termination of the
Merger Agreement this Agreement shall be deemed void ab initio and have no
further force or effect upon such termination of the Merger Agreement.
19. Defined Terms. Capitalized terms not otherwise defined herein
-------------
shall have the meanings given to them in the Merger Agreement.
********
-64-
IN WITNESS WHEREOF, the parties hereto have executed this
Noncompetition Agreement as of the date first above written.
MPATH INTERACTIVE, INC.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxx
------------------------------
Title: President and CEO
-----------------------------
-----------------------------------
Name:
Address:
****NONCOMPETITION AGREEMENT****
Exhibit A
---------
Yahoo!
Excite (Excite@Home)
GO Network
Lycos
Alta Vista
America Online Inc.
Microsoft
Lipstream
Multitude
NetTalk
Xxxxxxxxxxx.xxx
Really Easy Voice
NetDive
PowWow
Real Networks
Exhibit B
EMPLOYEE
PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
------------------------
September 15, 1999
The following confirms an agreement between
and Mpath Interactive, Inc., a Delaware corporation (the "Company"), which is a
material part of the consideration for my employment by the Company:
1. I understand that the Company possesses and will possess
Proprietary Information that is important to its business. For purposes of this
Agreement, "Proprietary Information" is information that was or will be
developed, created, or discovered by or on behalf of the Company, or which
became or will become known by, or was or is conveyed to the Company, which has
commercial value in the Company's business. "Proprietary Information" includes,
but is not limited to, information about algorithms, trade secrets, computer
programs, designs, technology, ideas, know-how, processes, formulas,
compositions, data, circuits, mask works, layouts, techniques, improvements,
inventions (whether patentable or not), works of authorship, business and
product development plans, the salaries and terms of compensation of other
employees, customers and other information concerning the Company's actual or
anticipated business, research or development, or which is received in
confidence by or for the Company from any other person. I understand that my
employment creates a relationship of confidence and trust between me and the
Company with respect to Proprietary Information.
2. I understand that the Company possesses or will possess "Company
Materials" which are important to its business. For purposes of this Agreement,
"Company Materials" are documents or other media or tangible items that contain
or embody Proprietary Information or any other information concerning the
business, operations or plans of the Company, whether such documents have been
prepared by me or by others, or any verbal communications. "Company Materials"
include, but are not limited to, blueprints, drawings, photographs, charts,
graphs, notebooks, customer lists, computer disks, tapes or printouts, sound
recordings and other printed, typewritten or handwritten documents, as well as
samples, prototypes, models, products and the like.
1.
3. In consideration of my employment by the Company and the
compensation received by me from the Company from time to time, I hereby agree
as follows:
a. All Proprietary Information and all title, patents, patent
rights, copyrights, mask work rights, trade secret rights, and other
intellectual property and rights anywhere in the world (collectively "Rights")
in connection therewith shall be the sole property of the Company. I hereby
assign to the Company any Rights I may have or acquire in such Proprietary
Information. At all times, both during my employment by the Company and after
its termination, I will keep in confidence and trust and will not use or
disclose any Proprietary Information or anything relating to it without the
prior written consent of an officer of the Company. Nothing contained herein
will prohibit an employee from disclosing to anyone the amount of his or her
wages.
b. All Company Materials shall be the sole property of the
Company. I agree that during my employment by the Company, I will not remove any
Company Materials from the business premises of the Company or deliver any
Company Materials to any person or entity outside the Company, except as I am
required to do in connection with performing the duties of my employment. I
further agree that, immediately upon the termination of my employment by me or
by the Company for any reason, or during my employment if so requested by the
Company, I will return all Company Materials, apparatus, equipment and other
physical property, or any reproduction of such property, excepting only (i) my
personal copies of records relating to my compensation; (ii) my personal copies
of any materials previously distributed generally to stockholders of the
Company; and (iii) my copy of this Agreement.
c. I will promptly disclose in writing to my immediate supervisor
or to any persons designated by the Company, all "Inventions", (which term
includes improvements, inventions, works of authorship, trade secrets,
technology, mask works, circuits, layouts, algorithms, computer programs,
formulas, compositions, ideas, designs, processes, techniques, know-how and
data, whether or not patentable) made or conceived or reduced to practice or
developed by me, either alone or jointly with others, during the term of my
employment. I will also disclose to the President of the Company Inventions
conceived, reduced to practice, or developed by me within six (6) months after
termination of my employment with the Company; such disclosures shall be
received by the Company in confidence (to the extent they are not assigned in
(d) below) and do not extend the assignment made in Section (d) below. I will
not disclose Inventions covered by Section 3.d to any person outside the Company
unless I am requested to do so by management personnel of the Company.
2.
d. I agree that all Inventions which I make, conceive, reduce to
practice or develop (in whole or in part, either alone or jointly with others)
during my employment shall be the sole property of the Company to the maximum
extent permitted by Section 2870 of the California Labor Code, a copy of which
is attached and I hereby assign such Inventions and all Rights therein to the
Company. No assignment in this Agreement shall extend to inventions, the
assignment of which is prohibited by Labor Code section 2870. The Company shall
be the sole owner of all Rights in connection therewith.
e. I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and assist it, at the
Company's expense, in evidencing, perfecting, obtaining, maintaining, defending
and enforcing Rights and/or my assignment with respect to such Inventions in any
and all countries. Such acts may include, but are not limited to, execution of
documents and assistance or cooperation in legal proceedings. I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents, as my agents and attorneys-in-fact to act for and in my behalf and
instead of me, to execute and file any documents and to do all other lawfully
permitted acts to further the above purposes with the same legal force and
effect as if executed by me.
f. Any assignment of copyright hereunder includes all rights of
paternity, integrity, disclosure and withdrawal and any other rights that may be
known as or referred to as "moral rights" (collectively "Moral Rights"). To the
extent such Moral Rights cannot be assigned under applicable law and to the
extent the following is allowed by the laws in the various countries where Moral
Rights exist, I hereby waive such Moral Rights and consent to any action of the
Company that would violate such Moral Rights in the absence of such consent. I
will confirm any such waivers and consents from time to time as requested by the
Company.
g. I have attached hereto a complete list of all existing
Inventions to which I claim ownership as of the date of this Agreement and that
I desire to specifically clarify are not subject to this Agreement, and I
acknowledge and agree that such list is complete. If no such list is attached to
this Agreement, I represent that I have no such Inventions at the time of
signing this Agreement.
h. During the term of my employment and for one (1) year
thereafter, I will not encourage or solicit any employee or consultant of the
Company to leave the Company for any reason. However, this obligation shall not
affect any responsibility I may have as an employee of the Company with respect
to the bona fide hiring and firing of Company personnel.
3.
i. I agree that during my employment with the Company: (i) I will
not engage in any employment, business, or activity that is in any way
competitive with the business or proposed business of the Company; (ii) I will
not assist any other person or organization in competing with the Company or in
preparing to engage in competition with the business or proposed business of the
Company; and (iii) I will devote my full business time and attention and loyalty
exclusively to the Company. The provisions of this paragraph shall apply both
during normal working hours and at all other times including, but not limited
to, nights, weekends and vacation time, while I am employed by the Company. I
may, however, request from time to time that the Company allow me to serve on
advisory boards of companies within the industry.
j. I represent that my performance of all the terms of this
Agreement will not breach any agreement to keep in confidence proprietary
information acquired by me in confidence or in trust prior to my employment by
the Company. I have not entered into, and I agree I will not enter into, any
agreement either written or oral in conflict herewith or in conflict with my
employment with the Company.
4. I agree that this Agreement is not an employment contract and that
my employment with the Company constitutes at-will employment, and, accordingly,
that I have the right to resign and the Company has the right to terminate my
employment at any time, for any reason, with or without cause.
5. I agree that this Agreement does not purport to set forth all of
the terms and conditions of my employment, and that as an employee of the
Company I have obligations to the Company which are not set forth in this
Agreement.
6. I agree that my obligations under paragraphs 3(a) through 3(f) and
paragraph 3(h) of this Agreement shall continue in effect after termination of
my employment, regardless of the reason or reasons for termination, and whether
such termination is voluntary or involuntary on my part, and that the Company is
entitled to communicate my obligations under this Agreement to any future
employer or potential employer of mine.
4.
7. I agree that any controversy between me and the Company involving
the construction of application of any terms, covenants or conditions of this
Agreement, or any claims arising out of or relating to this Agreement or the
breach thereof or with my employment with the Company or any termination of that
employment, except with respect to prejudgment remedies, will be submitted to
and settled by final and binding arbitration in San Mateo County, California, in
accordance with the Model Employment Dispute Resolution Rules of the American
Arbitration Association (the "Rules") then in effect, any arbitrator shall be
selected pursuant to such Rules and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. I further
agree that if one or more provisions of this Agreement are held to be illegal or
unenforceable under applicable California law, such illegal or unenforceable
portion(s) shall be limited or excluded from this Agreement to the minimum
extent required so that this Agreement shall otherwise remain in full force and
effect and enforceable in accordance with its terms.
8. This Agreement shall be effective as of the date I execute this
Agreement and shall be binding upon me, my heirs, executors, assigns, and
administrators and shall inure to the benefit of the Company, its subsidiaries,
successors and assigns.
9. This Agreement can only be modified by a subsequent written
agreement executed by the Company.
10. This Agreement shall be interpreted, construed, governed and
enforced according to the laws of the State of California. If any provision of
this Agreement is determined by a court of law to be illegal or unenforceable,
then such provision shall be enforced to the maximum extent possible and the
other provisions shall remain in full force and effect.
5.
I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR
REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I
SIGN THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING
THAT ONE COUNTERPART WILL BE RETAINED BY THE COMPANY AND THE OTHER COUNTERPART
WILL BE RETAINED BY ME.
Dated: , 199
---------- - ------------------------------------
, Employee
Accepted and Agreed to:
Mpath Interactive, Inc.
By
-------------------------------
Xxxx Xxxxxxxxx, President & CEO
6.
ATTACHMENT A
------------
Mpath Interactive, Inc.
000 Xxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
1. The following is a complete list of Inventions relevant to the
subject matter of my employment by Mpath Interactive, Inc. (the "Company") that
have been made or conceived or first reduced to practice by me alone or jointly
with others prior to my employment by the Company that I desire to clarify are
not subject to the Company's Proprietary Information and Inventions Agreement.
No Inventions
---
See below:
---
Additional sheets attached
---
2. I propose to bring to my employment the following materials and
documents of a former employer:
No materials or documents
---
See below:
---
Dated:
----------------- ------------------------------------
, Employee
1.
ATTACHMENT B
------------
Section 2870. Application of provision providing that employee shall
assign or offer to assign rights in invention to employer.
(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or
(2) Result from any work performed by the employee for his
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
1.
EXHIBIT C
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is entered into as of
October __, 1999, among Mpath Interactive, Inc., a Delaware corporation
("Mpath"), and the undersigned Stockholder ("Stockholder") of Resounding
Technology, Inc., a Delaware corporation ("Resounding").
RECITALS
A. Concurrently with the execution of this Agreement, Mpath, Resounding
and ITR Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of Mpath ("Merger Sub"), have entered into an Agreement and Plan of Merger (the
"Merger Agreement"), which provides for the merger (the "Merger") of Merger Sub
with and into Resounding and the conversion of each outstanding share of
Resounding's capital stock into shares of Mpath Common Stock.
B. In the Merger, outstanding shares of Resounding capital stock,
including any such shares owned by Stockholder, will be converted into the right
to receive shares of Mpath Common Stock (the "Shares") subject to the terms of,
and as set forth in, the Merger Agreement.
C. At the time of issuance to the Stockholder, the Shares to be
received by Stockholder in the Merger will not have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), but will have been
issued in reliance upon the exemption from registration contained in Section
4(2) of the Securities Act or Regulation D promulgated thereunder.
D. Pursuant to the terms of the Merger Agreement, after the Effective
Time (as defined in the Merger Agreement), Mpath has agreed to grant the
Stockholders certain registration rights pursuant to that certain Fifth Amended
and Restated Investors' Rights Agreement, dated as of October __, 1999 among the
Company and the other parties thereto (as amended from time to time, the
"Investors' Rights Agreement").
E. In order to induce Mpath to enter into the Merger Agreement and to
grant such registration rights, Stockholder is willing to agree to be bound by
certain requirements and to execute and deliver this Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Acknowledgments by Stockholder. Stockholder acknowledges and
------------------------------
understands that the representations, warranties and covenants made by
Stockholder set forth herein shall be relied upon by Mpath, Resounding, and
their respective affiliates, counsel and accounting firms, and that substantial
losses and damages may be incurred by such persons if Stockholder's
representations, warranties or covenants are breached. Stockholder has carefully
read this Agreement and the Merger Agreement (including the Escrow Agreement
attached thereto as
Exhibit F) and has discussed the requirements of this Agreement with
---------
Stockholder's professional advisors to the extent Stockholder has deemed
necessary.
2. Stockholder's Representations. Stockholder represents, warrants and
-----------------------------
covenants that:
(a) Acquire Solely for Own Account. The Shares to be received by
------------------------------
Stockholder in the Merger will be acquired for investment for Stockholder's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the Securities Act of 1933, as
amended. Stockholder does not presently have any contract, understanding,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third party with respect to any of the
Shares.
(b) Restricted Securities. Stockholder understands that the Shares
---------------------
will be "restricted securities" under applicable federal and state securities
laws. Accordingly Stockholder will not make any sale, transfer, or other
disposition of Shares unless (i) such sale, transfer, or other disposition is
within the applicable limitations of and in compliance with Rule 144 promulgated
by the Securities and Exchange Commission (the "Commission") under the
Securities Act, or (ii) some other exemption from registration under the
Securities Act is available with respect to any such proposed sale, transfer or
other disposition of Shares, or (iii) such distribution of Shares has been
registered under the Securities Act. Stockholder has no present intention to
sell or otherwise dispose of the Shares and is acquiring such Shares for
investment and not with a view to resale or distribution in a manner that would
violate applicable securities laws.
(c) Information Concerning Mpath and Resounding.
-------------------------------------------
(i) Stockholder, either alone or together with his or her
purchaser representative (the "Purchaser Representative"), has had the
opportunity to ask questions of, and obtain any additional information
reasonably available to Mpath and Resounding with respect to their respective
plans, results of operations, financial conditions, businesses, properties,
assets or business prospects, and Stockholder, either alone or together with the
Purchaser Representative, has received all such information as Stockholder or
the Purchaser Representative deems necessary and appropriate to enable
Stockholder, either alone or together with the Purchaser Representative, to
evaluate the risks and merits of the Merger and the Shares.
(ii) If Stockholder has retained a Purchaser Representative,
Stockholder has been informed in writing by the Purchaser Representative of any
material relationship between the Purchaser Representative and its affiliates
and Mpath and its affiliates that currently exists, that is understood to be
contemplated or has existed at any time during the previous two years, and any
compensation received or to be received as a result of such relationship, and
has, to the extent necessary to evaluate the risks and merits of the Merger,
relied upon the advice of the Purchaser Representative in connection with the
Merger;
(iii) Stockholder acknowledges he or she has previously
received (A) a Private Placement Memorandum describing the Merger, (B) a copy of
the Merger Agreement and (C) a copy of Mpath's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1999.
(d) Economic Risk. Stockholder, either alone or together with the
-------------
Purchaser Representative, can look after Stockholder's financial interests in
connection with the Merger; has such knowledge and experience in financial or
business matters as to be able to evaluate the merits and risks of the Merger;
and is able to acquire the Shares without impairing Stockholder's financial
condition, to hold the Shares for an indefinite period of time and to suffer a
complete loss on Stockholder's investment. Stockholder has not been organized
solely for the purpose of acquiring the Shares.
3. Restrictions on and Procedure for Sales.
---------------------------------------
(a) Legend. Stockholder understands that all certificates
------
representing Shares deliverable to Stockholder pursuant to the Merger shall,
until the occurrence of one of the events referred to below, bear a legend
substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE OTHER
CONDITIONS SPECIFIED IN THE STOCKHOLDERS AGREEMENT DATED AS OF OCTOBER __,
1999 BETWEEN THE HOLDER OF THIS CERTIFICATE AND MPATH INTERACTIVE, INC., A
COPY OF WHICH AGREEMENT WILL BE FURNISHED BY MPATH INTERACTIVE, INC. TO THE
HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT CHARGE."
Mpath, in its discretion, may cause stop transfer orders to be placed with
its transfer agent with respect to the certificates for the Shares which are
required to bear such legend.
4. Information for Use in Registration Statement. In connection with any
---------------------------------------------
registration statement being prepared by Mpath to register the Shares to permit
Stockholder to sell the Shares registered for sale under the registration
statement, the Stockholder represents and warrants that the information set
forth below is true, accurate and complete:
(a) Except as described on Schedule 4 hereto, the undersigned has
not had a material relationship with Mpath or any of its predecessors or
affiliates within the last three years, except that the undersigned has been a
Stockholder, officer, director, advisor or employee of Resounding.
The term "material relationship" has not been defined by the
Commission. However, the Commission has indicated that it will probably construe
as a "material relationship" any relationship which tends to prevent arms length
bargaining in dealings with a company, whether arising from a close business
connection or family relationship, a relationship
of control or otherwise. It seems prudent, therefore, to consider that the
undersigned would have such a relationship, for example, with any organization
of which the undersigned is an officer, director, trustee or partner or in which
the undersigned owns, directly or indirectly, 10% or more of the outstanding
voting stock, or in which the undersigned has some other substantial interest,
and with any person or organization with whom the undersigned has, or with whom
any relative or spouse of the undersigned (or any other person or organization
as to which the undersigned has any of the foregoing other relationships) has, a
contractual relationship.
(b) The undersigned acknowledges that the anti-manipulation
rules under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), may apply to sales of the Shares owned by the undersigned and to the
activities of the undersigned and his or her affiliates.
(c) Stockholder represents, warrants and covenants to Mpath to
provide such additional information related to the Stockholder as shall be
reasonably requested by Mpath to enable Mpath to cause any registration
statement to comply with the Securities Act and the rules and regulations
thereunder and that the information so provided is and will be true, accurate
and complete in all material respects. Stockholder understands that such
information is being provided to Mpath specifically for use in, or in connection
with, a registration statement and the prospectus contained therein, and has
executed this Agreement with such knowledge.
5. Access to Information. Stockholder acknowledges that Mpath is a
---------------------
publicly held company that files reports and other information under the
Exchange Act with the Commission and with the National Association of Securities
Dealers, Inc. Stockholder further acknowledges the availability of information
about Mpath through such reports and other information.
6. Additional Provisions Regarding Indemnification. Stockholder
-----------------------------------------------
approves and agrees to be bound by all provisions of Section 2.2 and Article X
of the Merger Agreement and the Escrow Agreement attached as Exhibit F to the
---------
Merger Agreement. Without limiting the generality of the foregoing, Stockholder
consents and agrees to the appointment of Stockholders' Agent pursuant to
Article X of the Merger Agreement and to the indemnification obligations
provided for in Section 10.9(b) of the Merger Agreement.
7. Confidentiality. Stockholder agrees to at all times keep confidential
---------------
and not divulge, furnish or make accessible to anyone any information regarding
or relating to the signing of the Merger Agreement or the Closing of the Merger
until Mpath has publicly announced the Merger or such other time as requested by
Mpath.
8. Termination of Certain Agreements. Resounding and each Stockholder
---------------------------------
acknowledge and agree that each of (i) the Amended and Restated Voting
Agreement, dated as of June 30, 1999 among Resounding and certain other parties
thereto, (ii) the Stockholders Agreement, dated as of November 5, 1998 among
Resounding and certain other parties thereto and (iii) the Registration Rights
Agreement, dated as of June 30, 1999 among Resounding and certain other parties
thereto shall each terminate and be of no further force or effect as of the
Closing Date (as defined in Merger Agreement) of the Merger.
9. Market-Standoff Provisions.
--------------------------
Each Stockholder hereby agrees, for a period beginning on the date hereof
and ending on October 27, 1999 (the "Lock-Up Period"), not to offer to sell,
--------------
contract to sell or otherwise sell, dispose of, loan, pledge or grant any rights
with respect to (collectively, a "Disposition") any shares of Mpath's Common
-----------
Stock (the "Common Stock"), any options or warrants to purchase any shares of
------------
Common Stock or any securities convertible into or exchangeable for shares of
Common Stock (collectively, "Securities"), now owned or hereafter acquired
----------
directly by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition, otherwise than (i) as a bona fide
gift or gifts, provided the donee or donees thereof agree to be bound by Section
9 of this Stockholders Agreement, (ii) as a distribution to limited partners or
shareholders of the undersigned, provided that the distributees thereof agree in
writing to be bound by the terms of Section 9 of this Stockholders Agreement or
(iii) with the prior written consent of BancBoston Xxxxxxxxx Xxxxxxxx. The
foregoing restriction is expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a Disposition of Securities
during the Lock-Up Period even if such Securities would be disposed of by
someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from
Securities. Furthermore, the undersigned hereby agrees and consents to the entry
of stop transfer instructions with the Company's transfer agent against the
transfer of the Securities held by the undersigned except in compliance with
this Section 9.
10. Miscellaneous.
-------------
(a) This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
(b) For the convenience of the parties hereto, 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 and the same document.
(c) This Agreement shall be enforceable by, and shall inure to the
benefit of and be binding upon, the parties hereto and their respective
successors and assigns. As used herein, the term "successors and assigns" shall
mean, where the context so permits, heirs, executors, administrators, trustees
and successor trustees, and personal and other representatives.
(d) This Agreement shall be governed by and construed, interpreted and
enforced in accordance with the internal laws of the State of Delaware (without
regard to the principles of conflict of laws thereof).
(e) If a court of competent jurisdiction determines that any provision of
this Agreement is not enforceable or enforceable only if limited in time and/or
scope, this Agreement shall continue in full force and effect with such
provision stricken or so limited
[Signature Page Follows.]
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By: /s/ XXXX XXXXXXXXX
----------------------------------------
Name: Xxxx Xxxxxxxxx
---------------------------------
Title: President & CEO
---------------------------------
STOCKHOLDER
By:
----------------------------------------
Name of Stockholder:
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXXXX XXXXXX
----------------------------------------
Name of Stockholder: Xxxxxxx Xxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXX XXXXXX
----------------------------------------
Name of Stockholder: Xxxx Xxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
Name of Stockholder: /s/ Xxxxxx Xxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ Xxxxx X. xx Xxxxxxxxx
----------------------------------------
Name of Stockholder: /s/ Xxxxx X. xx Xxxxxxxxx
-------------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ The Berkshire Capital Investors II
The Berkshire Management Co, LLC
----------------------------------------
Name of Stockholder: The Berkshire Capital
Investors II, LP
-----------------------
Name of Signatory (if different from name
of Stockholder): Xxxxxxx X. Xxxxxx
---------------------------
Title of Signatory
(if applicable): Managing Director
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 400,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
Peabody Sabot Ventures
By: /s/ XXXXXXX X. XXXXX
----------------------------------------
Name of Stockholder: Xxxxxxx X. Xxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory General
(if applicable): Partner
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 185,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
-----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STOCKHOLDER
By: /s/ SABOT FAMILY IRREVOCABLE TRUST
-----------------------------------------
By: /s/ XXXXXX X. XXXXX, TRUSTEE
Name of Stockholder: Xxxxxx X. Xxxxx, Trustee
-----------------------
By: Sherwood Guernsy, Trustee
Name of Signatory (if different from name
of Stockholder): /s/
----------------------------
Title of Signatory
(if applicable): Trustees
----------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 25,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXXX X. XXXXXX, XX.
----------------------------------------
Name of Stockholder: Xxxxxx X. Xxxxxx, Xx.
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXX X. XXXXXXXX
----------------------------------------
Name of Stockholder: Xxxx X. Xxxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXXX X. XXXXXX, XX.
----------------------------------------
Name of Stockholder: Xxxxxx X. Xxxxxx, Xx.
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock 41,687
-------------------
Series A Preferred Stock Combined
-------------------
FEIN or SS Number
-------------------
10/15/99
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: The Berkshires Capital Investors, L.P.
The Berkshires Management Company, LLC
----------------------------------------
Name of Stockholder: The Berkshires
-----------------------
Capital Investors II, LP
Name of Signatory (if different from name
of Stockholder): Xxxxxxx X. Xxxxxx
---------------------------
Title of Signatory
(if applicable): Managing Director
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 100,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ X.X. XXXXXXX
----------------------------------------
Name of Stockholder: Xxxxxxx X. Xxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------------
Name of Stockholder: Xxxxxx X. Xxxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXX X. GOLD
----------------------------------------
Name of Stockholder: Xxxx X. Gold
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 50,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
ATLANTA SIGNAL PROCESSORS, INC.
By: /s/ XXXXX X. XXXXXXXXXX PRESIDENT & CEO
----------------------------------------
ATLANTA SIGNAL
PROCESSORS, INC.
Name of Stockholder: Xxxxx X. Xxxxxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable): President & CEO
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 50,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
SCHEDULE B
----------
LIST OF RESOUNDING STOCKHOLDERS
-------------------------------
[DRAFT LIST - SUBJECT TO CHANGE]
Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxx X. Xxxxxxxx
Xxxxx X. xx Xxxxxxxxx
Xxxxxx X. Clebesch
Xxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
The Berkshires Capital Investors I
The Berkshires Capital Investors II
Peabody/Sabot Ventures
Sabot Family Irrevocable Trust
Peabody Family Ventures
Xxxx X. Gold
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxx and Xxxxx Xxxxx
Xxxx Xxxxxx Retirement Plan
Xxxxx X. Xxxx and Xxxxx Xxxxxxxxxxxx
Xxxxxxxx Xxxxx
Atlanta Signal Processors, Inc.
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
Peabody Family Ventures
By: /s/ XXXXXXX X. "BO" XXXXXXX
----------------------------------------
Name of Stockholder: Xxxxxxx X. "Bo" Peabody
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 40,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STOCKHOLDER
By: /s/ X. X. XXXXXXX
----------------------------------------
Name of Stockholder: Xxxxxxxxx X. Xxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------
Name of Stockholder: Xxxxx X. Xxxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
/s/ XXXXX XXXXXXXX
By: /s/ XXXXX XXXXX
----------------------------------------
Xxxxx Xxxxxxxx
Name of Stockholder: Xxxxx Xxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
/s/ XXXXX XXXXXXXXXXXX
By: /s/ XXXXX XXXX
----------------------------------------
Name of Stockholder: Xxxxx X. Xxxx and Xxxxx
-----------------------
Ifarraguerri as joint tenants with rights of
--------------------------------------------
survivorship.
--------------------------------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXXXX XXXXXXX
----------------------------------------
Name of Stockholder: Xxxxxxx Xxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXX XXXXXXXXX
----------------------------------------
Name of Stockholder: Xxxxx Xxxxxxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
Executed as of the date shown on the first page of this Agreement.
MPATH INTERACTIVE, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STOCKHOLDER
By: /s/ XXXXXXXX XXXXX
----------------------------------------
Name of Stockholder: Xxxxxxxx Xxxxx
-----------------------
Name of Signatory (if different from name
of Stockholder):
---------------------------
Title of Signatory
(if applicable):
---------------------------
Number of shares beneficially owned by Stockholder:
--------------------------------------------------
Common Stock
-------------------
Series A Preferred Stock 10,000
-------------------
FEIN or SS Number
-------------------
****STOCKHOLDERS AGREEMENT****
SCHEDULE 4
Prior or Existing Relationship with Mpath
-----------------------------------------
****STOCKHOLDERS AGREEMENT****
EXHIBIT D
RESOUNDING TECHNOLOGY, INC.
FIRST AMENDMENT TO
AMENDED AND RESTATED
FOUNDER STOCK RESTRICTION AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED FOUNDER STOCK RESTRICTION
AGREEMENT (this "Amendment") is entered into as of September 27, 1999 by and
among Resounding Technology, Inc., a Delaware corporation (the "Company"), and
the individual set forth on the signature page hereto (the "Founder").
RECITALS
WHEREAS, the Company and the Founder are parties to a certain Amended and
Restated Founder Stock Restriction Agreement dated as of June 30, 1999 (the
"Original Agreement");
WHEREAS, the Company, Mpath Interactive, Inc., a Delaware corporation
("Mpath") and ITR Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Mpath ("Merger Sub") have entered into an Agreement and Plan of
Merger (the "Merger Agreement") which provides for the merger (the "Merger") of
Merger Sub with and into the Company and the conversion of each outstanding
share of the Company's capital stock into shares of Mpath Common Stock.
WHEREAS, in the Merger, outstanding shares of Resounding capital stock,
including any such shares owned by Founder, will be converted into the right to
receive shares of Mpath Common Stock subject to the terms of, and as set forth
in, the Merger Agreement;
WHEREAS, in order to induce Mpath to enter into the Merger Agreement,
Founder is willing to agree to be bound by certain requirements and to execute
and deliver this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth, and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto hereby mutually covenant and agree as
follows:
AGREEMENT
1. Definitions. Any terms used herein but not defined herein shall have
the meaning ascribed to it in the Original Agreement.
2. Amendments to Section 1. (a) Section 1 of the Original Agreement is
hereby amended by deleting in their entirety the definitions of the term
"Stockholders Agreement" and the term "Voting Agreement".
(b) The definition of "Initial Restricted Shares" set forth in Section 1 of
the Original Agreement is hereby amended and restated in its entirety as
follows:
""Initial Restricted Shares" shall mean all of the Founder Shares"
-------------------------
3. Amendment to Section 2(b). Section 2(b) of the Original Agreement is
-------------------------
hereby amended and restated in its entirety as follows:
"(b) Vesting Schedule. The Shares shall vest in a series of three (3)
----------------
annual installments as equal in number as possible, with the first installment
vesting on the Closing Date (as defined in the Merger Agreement), as second
installment vesting on the first anniversary of the Closing Date and the final
installment of Shares vesting on the second anniversary of the Closing Date, at
which point all of the Shares shall have vested. Notwithstanding the foregoing,
in the event that the Company terminates without Cause the Founder's employment
or consulting relationship with the Company, then the vesting of the United
Shares that are outstanding immediately prior to the date of such termination
(the "Termination Date") shall be accelerated so that they become fully vested
----------------
immediately prior to the occurrence of such termination and shall, thereafter,
be treated as Vested Shares for all purposes of this Agreement. It is understood
and agreed that, for purposes of determining the number of Shares that have
become vested as of any date, all of the Shares owned of record or beneficially
by the Founder on such date shall be deemed to have been acquired by the Founder
of the Closing Date, notwithstanding that any such Shares may have been acquired
by the Founder at any time or from time to time after the date of this
Agreement."
4. Amendment to Section 2(c). Section 2(c) of the Original Agreement is
-------------------------
hereby amended and restated in its entirety as follows:
"(c) Change in Control. In the event of a Change of Control (as
-----------------
defined in Mpath's 1999 Stock Incentive Plan), all conditions and
restrictions with respect to the Shares shall lapse, except to the extent
such conditions and restrictions are assigned to the successor corporation
(or its Parent (as defined in Mpath's 1999 Stock Incentive Plan) in
connection with the Change in Control."
5. Amendment to Section 3. Section 3 of the Original Agreement is hereby
----------------------
amended and restated in its entirety as follows:
"3. Mandatory Repurchase Upon Voluntary Termination by Founder or by
----------------------------------------------------------------
Company for Cause of Founder's Employment or Consulting Relationship with
-------------------------------------------------------------------------
Company. In the event that the Founder's consulting or employment
-------
relationship with the Company is terminated voluntarily by the Founder or
terminated for Cause by the Company, the Company shall purchase from the
Founder, and the Founder shall sell to the Company, on the Termination
Date (the "Repurchase Date"), all of the Unvested Shares that are then
owned of record or beneficially by the Founder, at the purchase price per
share equal to $0.01. The purchase and sale of such Unvested Shares
pursuant to this Section 3 shall become effective automatically (without
any further action required by either the Company or the Founder) on the
Repurchase Date. From and after the Repurchase Date
-2-
the Founder shall have no further right, title or interest in and to any
of the then Unvested Shares. Promptly after the Repurchase Date, the
Company shall make payment of the aggregate purchase price for all of
such Unvested Shares, and the Escrow Holder shall deliver to the Company
the stock certificate or stock certificates representing all of such
Unvested Shares, together with a stock power or stock powers duly
executed in blank by or on behalf of the Founder."
6. Amendment to Section 4(b). Section 4(b) of the Original Agreement is
-------------------------
hereby amended by deleting the phrase "Subject to the terms hereof and to the
terms of the Stockholders Agreement, the" at the beginning of the first sentence
of such Section 4(b) and replacing it with the word "The".
7. Amendment to Section 5(b). Section 5(b) of the Original Agreement is
-------------------------
hereby amended and restated in its entirety as follows:
"(b) Legend for Unvested Shares. The certificates evidencing
--------------------------
any of the Unvested Shares shall be endorsed with a legend substantially
as follows:
"THIS CERTIFICATE AND THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO AN AMENDED AND RESTATED FOUNDER STOCK RESTRICTION
AGREEMENT DATED AS OF JUNE 30, 1999 AS AMENDED BY FIRST AMENDMENT
THERETO DATED AS OF SEPTEMBER 27, 1999 AND TO THE RESTRICTIONS UPON
TRANSFER CONTAINED THEREIN. A COPY OF SUCH FOUNDER STOCK
RESTRICTION AGREEMENT WILL BE FURNISHED TO ANY INTERESTED PARTY
UPON WRITTEN REQUEST FREE OF CHARGE.""
8. Amendment to Section 5(c). Section 5(c) of the Original Agreement is
-------------------------
hereby amended by deleting Section 5(c) in its entirety.
9. No Further Amendment. Except as set forth herein, the Original
--------------------
Agreement shall remain in full force and effect.
10. Governing Law. This Amendment shall be governed by the internal
-------------
substantive laws of the Commonwealth of Massachusetts.
11. Effectiveness. Notwithstanding any other provisions on this
-------------
Amendment, this Amendment shall become effective only upon the Effective Time
(as such term is defined in the Merger Agreement), and if such Effective Time
shall not occur prior to the termination of the Merger Agreement this Amendment
shall be deemed void ab initio and have no further force or effect upon such
termination of the Merger Agreement.
-3-
The parties have executed this First Amendment to Amended and Restated
Founder Stock Restriction Agreement as of the date first set forth above.
COMPANY:
-------
RESOUNDING TECHNOLOGY, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
FOUNDER:
-------
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
FOUNDER:
-------
By: /s/ Xxxxx X. xx Xxxxxxxxx
--------------------------------------
Name: Xxxxx X. xx Xxxxxxxxx
FOUNDER:
-------
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxx
FOUNDER:
-------
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
-5-
EXHIBIT E
Name of Resounding Technology, Inc. Stockholder:________________________
(Please Print)
State of Domicile:____________________________
RESOUNDING TECHNOLOGY, INC.
--------------------------
INVESTOR REPRESENTATION STATEMENT
--------------------------
INSTRUCTIONS: IN CONNECTION WITH THE CLOSING OF THE PROPOSED MERGER BETWEEN
RESOUNDING TECHNOLOGY, INC. AND A WHOLLY OWNED SUBSIDIARY OF MPATH INTERACTIVE,
INC., PLEASE COMPLETE THIS INVESTOR REPRESENTATION STATEMENT BY FILLING IN THE
INFORMATION CALLED FOR, CHECKING THE APPROPRIATE BOXES, AND SIGNING AT PAGE 3.
PLEASE RETURN THE COMPLETED QUESTIONNAIRE AS SOON AS POSSIBLE TO [COUNSEL TO
----------------------------------------------------------------------------
RESOUNDING TECHNOLOGY, INC.]
----------------------------
RESOUNDING TECHNOLOGY, INC.
--------------------------
INVESTOR REPRESENTATION STATEMENT
--------------------------
TO: Mpath Interactive, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
In connection with the proposed merger between a wholly owned subsidiary
of Mpath Interactive, Inc. and RESOUNDING TECHNOLOGY, INC. (the "Corporation"),
-----------
the undersigned hereby represents as follows:
1. Representations as to Accredited Investor Status. The undersigned has
------------------------------------------------
read the definition of "Accredited Investor" from Rule 501 of Regulation D
attached hereto as Exhibit A, and certifies that either (check one):
A. [_] The undersigned is an "Accredited Investor" for one or more of the
following reasons:
[_] (a) The undersigned is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint
net worth with his or her spouse, presently exceeds
$1,000,000;
[_] (b) The undersigned is an individual (not a partnership,
corporation, etc.) who had an income in excess of
$200,000 in each of the two most recent years, or joint
income with their spouse in excess of $300,000 in each
of those years (in each case including foreign income,
tax exempt income and full amount of capital gains and
losses but excluding any income of other family members
and any unrealized capital appreciation) and has a
reasonable expectation of reaching the same income level
in the current year;
-2-
[_] (c) The undersigned is a director or executive officer of
the Corporation which is issuing and selling the
Shares;
[_] (d) The undersigned is a corporation, partnership,
Massachusetts business trust, or non-profit
organization within the meaning of Section 501(c)(3)
of the Internal Revenue Code, in each case not formed
for the specific purpose of acquiring the Shares and
with total assets in excess of $5,000,000;
------------------------------------------------------
------------------------------------------------------
(describe entity)
[_] (c) The undersigned is a trust with total assets in excess
of $5,000,000, not formed for the specific purpose of
acquiring the Shares, where the purchase is directed
by a "sophisticated person" as defined in Regulation
506(b)(2)(ii).;
[_] (f) The undersigned is an entity all the equity owners of
which are "accredited investors" within one or more of
the above categories. If relying upon this Category
-----------------------------
alone, each equity owner must complete a separate copy
------------------------------------------------------
of this Agreement;
-----------------
______________________________________________________
______________________________________________________
(describe entity)
B. [_] The undersigned is not an "Accredited Investor" but has
---
completed the statement concerning his/her knowledge and
experience in financial and business matters included in
Exhibit B hereto. Kindly provide sufficient detail so that the
Corporation's legal counsel may conclude that the undersigned
is capable of evaluating the merits and risks of investment in
the Corporation.
2. Entity Type. The undersigned is:
-----------
[_] An individual
[_] A corporation
[_] A partnership
[_] A trust
[_] Other
-----------------------------
3. Tax I.D. Number. The social security number or federal tax I.D. number of
---------------
the undersigned is: .
---------------------
4. Address. The address of the undersigned is:
------- -------------------------------
---------------------------------------------------------------------------
-3-
-----------------------------------------------------------------------------
The phone, fax and contact person (if an entity) are as follows:
Phone:
---------------------------------
Fax:
---------------------------------
Contact:
---------------------------------
5. Individuals. If the undersigned is an individual:
-----------
Name of Employer:
-------------------------
Position:
-------------------------
6. Institutions. If the undersigned is an institution:
------------
Nature of business:
-----------------------
Date of inception of business:
------------
If the answer to Question 1 is that the undersigned is an "Accredited
Investor", the questionnaire is complete and please simply sign below. Any
potential investor who is not an "Accredited Investor" also must complete the
supplemental questionnaire attached hereto as Exhibit B to assure compliance
with state and federal securities laws.
-4-
The foregoing representation is true and accurate as of the date hereof
and shall be true and accurate as of the date of Closing. If in any respect
-----------------
such representation shall not be true and accurate prior to Closing, the
------------------------------------------------------------------------
undersigned shall give immediate notice of such fact to the President of the
----------------------------------------------------------------------------
Corporation.
------------
Very truly yours,
------------------------------------
Print Name of Investor
Dated:
-------------------- ------------------------------------
Signature
--------------------------------------------
Print Title (if applicable)
--------------------------------------------
Print Name of joint investor or other person
whose signature is required
--------------------------------------------
Signature
--------------------------------------------
Print Title (if applicable)
-5-
EXHIBIT A
---------
Rule 501. Definitions and Terms Used in Regulation D.
------------------------------------------
As used in Regulation D, the following terms have the meaning
indicated:
(a) Accredited Investor. "Accredited investor" shall mean any person
-------------------
who comes within any of the following categories, or who the issuer reasonably
believes comes within any of the following categories, at the time of the sale
of the securities to that person:
(1) Any bank as defined in section 3(a)(2) of the Act or any
savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Act whether acting in its
individual or fiduciary capacity; any broker dealer
registered pursuant to Section 15 of the Securities Exchange
Act of 1934; insurance company as defined in Section 2(13) of
the Act; investment company registered under the Investment
Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of that Act; Small Business
Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if
the employee benefit plan has total assets in excess of
$5,000,000; or, if a self-directed plan, with investment
decisions made solely by persons that are accredited
investors;
(2) Any private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
(4) Any director, executive officer, or general partner of the
issuer of the securities being offered or sold, or any
director, executive officer, or general partner of a general
partner of that issuer;
(5) Any natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase
exceeds $1,0000,000;
(6) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the
same income level in the current year;
(7) Any trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person
as described in Rule 506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited
investors.
[Remainder omitted]
-6-
EXHIBIT B
---------
CONFIDENTIAL SUPPLEMENTAL INFORMATION STATEMENT
(To be completed by stockholders of Resounding Technology, Inc. that are not
"Accredited Investors")
In order to assure compliance with applicable federal and state laws, it is
necessary to obtain information regarding the financial position and experience
of stockholders of Resounding Technology, Inc. that are not "Accredited
Investors."
I. GENERAL INFORMATION (For individual stockholders and each individual
-------------------------------------------
partner or stockholder if the stockholder is a partnership or corporation that
------------------------------------------------------------------------------
is not an "Accredited Investor" -- attach additional sheets if necessary)
------------------------------
A. Purchasers
1. Name:
---------------------------------------------------------------
2. Address:
Business:
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Residence:
----------------------------------------------
----------------------------------------------
----------------------------------------------
3. Telephone:
Business:
( )
-------- ------------------------
Residence:
( )
-------- ------------------------
4. State where registered to vote:
--------------------------------------
5. Social Security Number:
--------------------------------------
6. Date of Birth:
--------------------------------------
7. Country of citizenship, if
other than the United States
--------------------------------------
8. Marital status:
--------------------------------------
B-1
9. Please state your education and degrees earned:
Degree School Year
------ ------ ----
------------- ------------------------------------- ---------------
------------- ------------------------------------- ---------------
------------- ------------------------------------- ---------------
10. Current occupation (if retired, please described your last occupation):
Employer:
--------------------------------------------------
Nature of Business:
--------------------------------------------------
Position and/or duties:
--------------------------------------------------
Period Employed:
--------------------------------------------------
11. If current employment is less than five years, please complete the
following chart on your employment history for the past five (5) years:
Employer and Title Primary Duties From To
------------------ -------------- ---- --
-------------------- --------------------------- ------ ------
-------------------- --------------------------- ------ ------
-------------------- --------------------------- ------ ------
12. Please list all professional qualifications that you have held or
currently hold, including bar admissions, accounting certificates,
brokerage licenses and other professional licenses or certificates:
Year
Professional Qualifications Received Still Effective
--------------------------- --------- ---------------
Yes [_] No [_]
------------------------------ -------------
Yes [_] No [_]
------------------------------ -------------
Yes [_] No [_]
------------------------------ -------------
B-2
II. FINANCIAL INFORMATION (For individual stockholders and each individual
------------------------------------------------
partner or stockholder if the stockholder is a partnership or corporation
-------------------------------------------------------------------------
that is not an "Accredited Investor" -- attach additional
-----------------------------------
sheets if necessary)
A. To confirm that each individual investor meets the financial
requirements established for this offering, please answer the
questions set forth below, as appropriate.
1. Please indicate your net worth (including spouse, if applicable),
excluding home, home furnishings and automobiles:
---------
$ 25,000 - 75,000 [_] $250,000 - 500,000 [_]
$ 75,000 - 150,000 [_] $500,000 - 1,000,000 [_]
$150,000 - 250,000 [_]
Greater than $1,000,000 [_]
2. What was your income for 1997 and 1998?
1997
----------------
1998
----------------
Do you expect your income for 1999 to equal or exceed 1997?
Yes [_] No [_]
If no, what do you expect your 1999 income will be?
1999
----------------
III. INVESTMENT EXPERIENCE REPRESENTATIONS
A. Indicate how often you invest in:
1. Marketable Securities
Often [_] Occasionally [_] Seldom [_] Never [_]
2. Restricted Securities
Often [_] Occasionally [_] Seldom [_] Never [_]
3. Venture Capital Limited Partnership Funds
Often [_] Occasionally [_] Seldom [_] Never [_]
B-3
4. Please list below your most recent private investments (attach a
separate sheet if necessary):
Private When Amount of
Offering Type of Investment Purchased Investment
$
--------- ------------------------------------- ------------- --------------
$
--------- ------------------------------------- ------------- --------------
$
--------- ------------------------------------- ------------- --------------
$
--------- ------------------------------------- ------------- --------------
B. Please answer each of the following questions regarding your
investment experience:
1. Do you have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of an investment in the Corporation?
Yes [_] No [_]
2. Do you, either alone by reason of your business or financial
experience or together with your professional advisor or
advisors, have the capacity to protect your own interests in
connection with a purchase of the Shares in the Corporation?
Yes [_] No [_]
3. Are you (or the trust beneficiary for which you are the
fiduciary) able to bear the economic risk of the investment,
including a complete loss of the investment?
Yes [_] No [_]
C. What is your relationship to the founders of the Corporation?
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
B-4
I confirm that the foregoing statements are complete and accurate to the
best of my knowledge and belief, and that I undertake to notify the Corporation
regarding any material change in the information set forth above prior to the
closing of the merger referred to in this Investor Representation Statement.
--------------------------------------------------------
Print Name of Purchaser
By: Date
-------------------------------------------------------- --------------
Signature
--------------------------------------------------------
Print Title
--------------------------------------------------------
Print Name of joint purchaser or other person
whose signature is required
By: Date
-------------------------------------------------------- --------------
Signature
--------------------------------------------------------
Print Title (if applicable)
B-5
EXHIBIT F
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into as of October __,
1999, by and among Mpath Interactive, Inc., a Delaware corporation ("Mpath"),
Resounding Technology, Inc., a Delaware corporation ("Resounding"), U.S. Bank
Trust, National Association, as Escrow Agent ("Escrow Agent") and Xxxx Xxxxxx
and Xxxxx xx Xxxxxxxxx, as Stockholders' Agents ("Stockholders' Agents") with
respect to the shares of Mpath capital stock to be issued to the stockholders
(collectively, the "Holders") of Resounding in the Merger (as defined below).
RECITALS
A. Mpath, Resounding and ITR Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of Mpath ("Sub"), have entered into a Agreement and
Plan of Merger dated as of September 27, 1999 (the "Merger Agreement") pursuant
to which Sub will merge with and into Resounding (the "Merger"), with Resounding
surviving the Merger as the surviving corporation. Capitalized terms used in
this Agreement and not otherwise defined in this Agreement shall have the
meanings given them in the Merger Agreement.
B. Section 2.2 of the Merger Agreement provides that at the Effective
Time, or such later time as determined in accordance with Section 2.3(b) of the
Merger Agreement with respect to Dissenting Shares for which dissenters' rights
shall have been withdrawn or lost, Mpath will deposit in the Escrow Fund
certificates representing the Escrow Shares, on a pro rata basis, in accordance
with each Holder's percentage ownership of Mpath Common Stock issuable pursuant
to the Merger. Such shares (the "Escrow Securities") shall be held as security
for Resounding's indemnification obligations under Article X of the Merger
Agreement and shall represent Mpath's sole and exclusive remedy with respect to
such indemnification obligations.
C. The parties to this Agreement desire to establish the terms and
conditions pursuant to which the Escrow Securities will be deposited, held in,
and disbursed from the Escrow Fund.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Escrow Fund. The Escrow Agent agrees to: (a) accept delivery of the
-----------
Escrow Securities; and (b) hold such Escrow Securities in escrow as part of the
Escrow Fund, all subject to the terms and conditions of this Agreement and
Article X of the Merger Agreement (which Article X is attached to this Agreement
as Appendix I and incorporated by reference into this Agreement) (collectively,
----------
the "Escrow Provisions"). The Escrow Securities will include "Additional Escrow
Securities" as that term is defined in Section 2(c) of this Agreement.
2. Deposit of Escrow Securities: Release from Escrow.
-------------------------------------------------
(a) Delivery of Escrow Securities. As soon as practicable after the
-----------------------------
Effective Time, the Escrow Securities will be delivered by Mpath on behalf of
the Holders to the Escrow Agent. Such shares shall be issued in the name of the
Escrow Agent. In the event Mpath issues any Additional Escrow Securities, such
Escrow Securities will be issued in the name of the Escrow Agent and delivered
to the Escrow Agent in the same manner as the Escrow Securities.
(b) Holders' Accounts. The Escrow Agent will maintain for each Holder
-----------------
an accounting record (each Holder's "Account") specifying the Escrow Securities
held for the record of each Holder pursuant to the Escrow Provisions. All Escrow
Securities received under Section 2(a) will be allocated to each Holder's
Account in accordance with such Holder's percentage interest in the Escrow Fund
as set forth on Appendix II.
-----------
(c) Dividends, Voting and Rights of Ownership. Except for tax-free
-----------------------------------------
dividends paid in stock declared with respect to the Escrow Securities pursuant
to Section 305(a) of the Internal Revenue Code of 1986, as amended (the "Code")
("Additional Escrow Securities"), there will be distributed promptly to the
Holders any cash dividends or dividends payable in securities or other
distributions of any kind made in respect of the Escrow Securities. Each Holder
will have voting rights with respect to the Escrow Securities deposited in the
Escrow Fund with respect to such Holder so long as such Escrow Securities are
held in escrow, and Mpath will take all reasonable steps necessary to allow the
exercise of such rights. While the Escrow Securities remain in the Escrow
Agent's possession pursuant to this Agreement and the Merger Agreement, the
Holders will retain and will be able to exercise all other incidents of
ownership of said Escrow Securities which are not inconsistent with the terms
and conditions of this Agreement and the Merger Agreement.
(d) Release. The Escrow Securities will be held by the Escrow Agent
-------
until required to be released to the Holders pursuant to Section 10.4 and
Section 10.6 of the Merger Agreement, unless previously delivered to Mpath
pursuant to Section 10.5 of the Merger Agreement. Within five (5) business days
after the applicable release condition is met, the Escrow Agent will deliver to
Mpath's transfer agent a letter of instruction together with the Escrow
Securities to be released on such date as identified by Mpath and the
Stockholders' Agents to the Escrow Agent in writing and Mpath shall then cause
the transfer agent to promptly deliver stock certificate(s) issued in the name
of each Holder. Mpath and the Stockholders' Agents will undertake to deliver a
notice to the Escrow Agent identifying the number of Escrow Securities to be
released with respect to each Holder within such five-day period. Escrow
Securities will be released to the respective Holders in accordance with their
respective Accounts. Mpath will take such action as may be necessary to cause
such certificates to be issued in the names of the appropriate Holders.
Certificates representing Escrow Securities so issued will bear the legend
contained in the Stockholders Agreement of each Holder. Cash will be paid in
lieu of fractions of Escrow Securities in an amount equal to the product
determined by multiplying such fraction by $_______ (the "Per Share Value").
Within five (5) business days
-2-
after written request from the Stockholders' Agents, Mpath will deposit with the
Escrow Agent sufficient funds to pay such cash amounts for fractional shares.
(e) No Encumbrance. Except as provided in this Agreement and as may
--------------
be set forth in the RTI Disclosure Schedule, no Escrow Securities or any
beneficial interest in the Escrow Securities may be pledged, sold, assigned or
transferred, including by operation of law, by a Holder or be taken or reached
by any legal or equitable process in satisfaction of any debt or other liability
of a Holder, prior to the delivery to such Holder of the Escrow Securities by
the Escrow Agent.
(f) Power to Transfer Escrow Securities. The Escrow Agent is granted
-----------------------------------
the power to effect any transfer of Escrow Securities contemplated by the Escrow
Provisions. Mpath will cooperate with the Escrow Agent in promptly issuing
stock certificates to effect such transfers.
(g) Reporting. Each Holder will provide the Escrow Agent with
---------
his/her/its Taxpayer Identification Number at or prior to Closing. On or before
January 31 of each year under this Agreement, the Escrow Agent will prepare and
mail to each Holder, other than Holders who demonstrate their status as non-
resident aliens in accordance with the United States Treasury Regulations, a
Form 1099-B reporting any cash payments, in accordance with such Treasury
Regulations. The Escrow Agent will also prepare and file copies of such Forms
1099-B by magnetic tape with the IRS, in accordance with Treasury Regulations.
If the Escrow Agent has not received notice from a Holder of such Holder's
certified Taxpayer Identification Number, the Escrow Agent shall deduct and
withhold backup withholding tax from any cash payment made pursuant to the
Internal Revenue Code and applicable regulations thereunder. Should any issue
arise regarding federal income tax reporting or withholding, the Escrow Agent
shall act in accordance with the written instructions of the Stockholders'
Agents and Mpath
3. Limitation of the Escrow Agent's Liability.
------------------------------------------
(a) The Escrow Agent will incur no liability with respect to any
action taken or suffered by it in reliance upon any notice, direction,
instruction, consent, statement or other document believed by it to be genuine
and duly authorized, nor for any other action or inaction, except its own
willful misconduct, bad faith or gross negligence. The Escrow Agent will not be
responsible for the validity or sufficiency of the Escrow Provisions. In all
questions arising under the Escrow Provisions, the Escrow Agent may rely on the
advice of counsel, and for anything done, omitted or suffered in good faith by
the Escrow Agent based on such advice, the Escrow Agent will not be liable to
anyone. The Escrow Agent will not be required to take any action under the
Escrow Provisions involving any expense unless the payment of such expense is
made or provided for in a manner satisfactory to it.
(b) In the event conflicting demands are made or notices are served
upon the Escrow Agent with respect to the Escrow Fund, the Escrow Agent will
have the absolute right, at the Escrow Agent's election, to do either or both of
the following: resign so a successor can be appointed pursuant to Section 5 or
file a suit in interpleader and obtain an order from a court of
-3-
competent jurisdiction requiring the parties to interplead and litigate in such
court their several claims and rights among themselves. In the event such
interpleader suit is brought, the Escrow Agent will thereby be fully released
and discharged from all further obligations imposed upon it under the Escrow
Provisions, and Mpath will pay the Escrow Agent (subject to reimbursement from
the Holders pursuant to Section 4) all costs, expenses and reasonable attorney's
fees expended or incurred by the Escrow Agent pursuant to the exercise of the
Escrow Agent's rights under this Section 3 (such costs, fees and expenses will
be treated as extraordinary fees and expenses for the purposes of Section 4).
4. Expenses.
--------
(a) Escrow Agent. All fees and expenses of the Escrow Agent incurred
------------
in performing its responsibilities hereunder will be paid by Mpath upon receipt
of a written invoice by the Escrow Agent. In the event the Escrow Agent incurs
any liability to any person, firm or corporation by reason of its acceptance or
administration of this Escrow Agreement, Mpath agrees to indemnify the Escrow
Agent for its costs and expenses, including, without limitation, reasonable
counsel fees and expenses. Notwithstanding the foregoing, no indemnity need be
paid in the event of the Escrow Agent's gross negligence, bad faith or willful
misconduct.
(b) Stockholders' Agents. The Stockholders' Agents will not be
--------------------
entitled to receive any compensation from Mpath or the Holders in connection
with this Agreement. Any fees and expenses incurred by the Stockholders' Agents
in connection with actions taken pursuant to the terms of the Escrow Provisions
will be paid by the Holders.
5. Successor Escrow Agent. In the event the Escrow Agent becomes
----------------------
unavailable or unwilling to continue in its capacity as such, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by giving
resignation to the parties to this Agreement, specifying not less than thirty
(30) days' prior written notice of such a date when such resignation will take
effect. Mpath will designate a successor Escrow Agent prior to the expiration
of such 30-day period by giving written notice to the Escrow Agent and the
Stockholders' Agents. Mpath may appoint a successor Escrow Agent with the
consent of the Stockholders' Agents, which will not be unreasonably withheld.
The Escrow Agent will promptly transfer the Escrow Securities to such designated
successor. In the event no successor Escrow Agent is appointed as described in
this Section 5, the Escrow Agent may apply to a court of competent jurisdiction
for the appointment of a successor Escrow Agent.
6. Limitation of Responsibility. The Escrow Agent's duties are limited to
----------------------------
those set forth in the Escrow Provisions and the Escrow Agent may rely upon the
written notices delivered to the Escrow Agent under the Escrow Provisions.
7. Incorporation by Reference of Article X. The parties agree that the
---------------------------------------
terms of Article X of the Merger Agreement shall be deemed to be incorporated by
reference in this Agreement as if such Article had been set forth in its
entirety herein. The parties acknowledge that the administration of the Escrow
Fund by the Escrow Agent will require reference to both the terms of this
Agreement as well as the terms of such Article X.
-4-
8. Notices. Any notice provided for or permitted under the Escrow
-------
Provisions will be treated as having been given when (i) delivered personally,
(ii) sent by confirmed telex or Fax, (iii) sent by commercial overnight courier
with written verification of receipt, or (iv) mailed postage prepaid by
certified or registered mail, return receipt requested, to the party to be
notified, at the address set forth below, or at such other place of which the
other party has been notified in accordance with the provisions of this Section
10.
Mpath Interactive, Inc.: Mpath, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Fax No: (000) 000-0000
Telephone No: (000) 000-0000
With copy to: Venture Law Group
A Professional Corporation
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Fax No: (000) 000-0000
Telephone No: (000) 000-0000
Resounding Resounding Technology, Inc.
Technology, Inc.: 00 Xxxxxxxx Xxxxxx
Building 00, Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Fax No. (000) 000-0000
Telephone No. (000) 000-0000
With copy to: Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Esq.
Xxxxxxx X. Xxxxxxx. Esq.
Fax No: (000) 000-0000
Telephone No: (000) 000-0000
Escrow Agent: U.S. Bank Trust, National Association
Xxx Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Fax No: 000-000-0000
Telephone No: 000-000-0000
-5-
Stockholders' Agents: Xxxxx xx Xxxxxxxxx and Xxxx Xxxxxx
c/o Resounding Technology, Inc.
00 Xxxxxxxx Xxxxxx
Building 00, Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Fax No. (000) 000-0000
Telephone No. (000) 000-0000
Such notice will be treated as having been received upon actual receipt.
9. General.
-------
(a) Governing Laws. It is the intention of the parties hereto that
--------------
the internal laws of the State of California (irrespective of its choice of law
principles) shall govern the validity of this Agreement, the construction of its
terms, and the interpretation and enforcement of the rights and duties of the
parties to this Agreement.
(b) Binding upon Successors and Assigns. Subject to, and unless
-----------------------------------
otherwise provided in, this Agreement, each and all of the covenants, terms,
provisions, and agreements contained in this Agreement shall be binding upon,
and inure to the benefit of, the permitted successors, executors, heirs,
representatives, administrators and assigns of the parties to this Agreement.
(c) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original as against any party whose
signature appears on such counterpart and all of which together shall constitute
one and the same instrument. This Agreement shall become binding when one or
more counterparts of this Agreement, individually or taken together, shall bear
the signatures of all of the parties reflected in this Agreement as signatories.
(d) Entire Agreement. Except as set forth in the Merger Agreement,
----------------
this Agreement, the documents referenced in this Agreement and the exhibits to
such documents, constitute the entire understanding and agreement of the parties
to this Agreement with respect to the subject matter of this Agreement and of
such documents and exhibits and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the parties with respect to this Agreement. The
express terms of this Agreement control and supersede any course of performance
or usage of the trade inconsistent with any of the terms of this Agreement.
(e) Waivers. No waiver by any party to this Agreement of any
-------
condition or of any breach of any provision of this Agreement will be effective
unless in writing. No waiver by any party of any such condition or breach, in
any one instance, will be deemed to be a further or
-6-
continuing waiver of any such condition or breach or a waiver of any other
condition or breach of any other provision contained in this Agreement.
(f) Amendment. This Agreement may be amended with the written consent
---------
of Mpath, the Escrow Agent and the Stockholders' Agents, provided, however, that
-------- -------
if the Escrow Agent does not agree to an amendment agreed upon by Mpath and the
Stockholders' Agents, a successor Escrow Agent will be appointed in accordance
with Section 5.
[Signature Page Follows.]
-7-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written and will be effective as to all the Holders
when executed by Mpath, the Escrow Agent and the Stockholders' Agents.
MPATH INTERACTIVE, INC.
By: /s/ Xxxx Xxxxxxxxx
--------------------------
Its: President & CEO
-------------------------
RESOUNDING TECHNOLOGY, INC.
By:
--------------------------
Its:
--------------------------
ESCROW AGENT:
U.S. BANK TRUST, NATIONAL ASSOCIATION
By:
--------------------------
Its:
--------------------------
STOCKHOLDERS' AGENTS:
-----------------------------
-----------------------------
****ESCROW AGREEMENT****
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written and will be effective as to all the Holders
when executed by Mpath, the Escrow Agent and the Stockholders' Agents.
MPATH INTERACTIVE, INC.
By:
-------------------------
Its:
------------------------
RESOUNDING TECHNOLOGY, INC.
By:
-------------------------
Its:
------------------------
ESCROW AGENT:
U.S. BANK TRUST, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
-------------------------
Its: Vice President
------------------------
STOCKHOLDERS' AGENTS:
----------------------------
----------------------------
****ESCROW AGREEMENT****
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written and will be effective as to all the Holders
when executed by Mpath, the Escrow Agent and the Stockholders' Agents.
MPATH INTERACTIVE, INC.
By:
---------------------------
Its:
--------------------------
RESOUNDING TECHNOLOGY, INC.
By: /s/ Xxxx Xxxxxx
---------------------------
Its: CEO
--------------------------
ESCROW AGENT:
U.S. BANK TRUST, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
---------------------------
Its:
--------------------------
STOCKHOLDERS' AGENTS:
/s/ Xxxx Xxxxxx
------------------------------
/s/ Xxxxx X. XxXxxxxxxxx
------------------------------
****ESCROW AGREEMENT****
APPENDIX I
----------
Article X of Merger Agreement
-----------------------------
APPENDIX II
-----------
HOLDERS' INTEREST IN ESCROW FUND
--------------------------------
EXHIBIT G
---------
MPATH INTERACTIVE, INC.
FIFTH AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
October __, 1999
TABLE OF CONTENTS
Page
----
1. Registration Rights...................................2
1.1 Definitions......................................2
1.2 Request for Registration.........................3
1.3 Company Registration.............................5
1.4 Obligations of the Company.......................5
1.5 Furnish Information..............................6
1.6 Expenses of Demand Registration..................7
1.7 Expenses of Company Registration.................7
1.8 Underwriting Requirements........................7
1.9 Delay of Registration............................8
1.10 Indemnification..................................8
1.11 Reports Under Securities Exchange Act of 1934...10
1.12 Form S-3 Registration...........................11
1.13 Assignment of Registration Rights...............12
1.14 Limitations on Subsequent Registration Rights...12
1.15 Market Stand-Off Agreement......................13
1.16 Termination of Registration Rights..............13
2. Covenants of the Company.............................14
2.1 Qualified Small Business Stock..................14
2.2 Employee Stock..................................15
3. Miscellaneous........................................15
3.1 Successors and Assigns..........................15
3.2 Governing Law...................................15
3.3 Counterparts....................................15
3.4 Titles and Subtitles............................15
3.5 Notices.........................................15
3.6 Expenses........................................15
3.7 Amendments and Waivers..........................16
3.8 Addition of PSI.................................16
3.9 Severability....................................16
3.10 Aggregation of Stock............................16
3.11 Entire Agreement................................16
Schedule A Schedule of Investors
Schedule B Schedule of Resounding Stockholders
FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
------------------------------------------------------
THIS FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the
"Agreement") is made as of the ____ day of October, 1999, by and among Mpath
Interactive, Inc., a Delaware corporation (the "Company"), the investors listed
on Schedule A hereto, each of which is herein referred to as an "Investor," the
stockholders listed on Schedule B hereto, each of which is herein referred to as
a "Resounding Stockholder" and Xxxxx X. Xxxxx, Xxxx Xxxxxxxxx and Xxxxx
Xxxxxxxx, each of whom is herein referred to as a "Founder."
RECITALS
--------
WHEREAS, certain of the Investors (the "Existing Investors") hold shares of
the Company's Series A Preferred Stock and/or shares of Common Stock issued upon
conversion thereof (the "Series A Preferred Stock"), Series B Preferred Stock
and/or Common Stock issued upon conversion thereof (the "Series B Preferred
Stock"), Series C Preferred Stock and/or shares of Common Stock issued upon
conversion thereof (the "Series C Preferred Stock"), Series D Preferred Stock
and/or Common Stock issued upon conversion thereof (the "Series D Preferred
Stock"), Series E Preferred Stock and/or Common Stock issued upon conversion
thereof (the "Series E Preferred Stock") and/or Common Stock (the "Common
Stock") and possess registration rights, information rights and other rights
pursuant to a Fourth Amended and Restated Investors' Rights Agreement dated as
of January 15, 1999 by and between the Company and such Existing Investors (the
"Prior Agreement");
WHEREAS, the Existing Investors are holders of at least 66-2/3% of the
"Registrable Securities" of the Company less "Founders Stock" (both as defined
in the Prior Agreement), and desire to terminate the Prior Agreement and to
accept the rights created pursuant hereto in lieu of the rights granted to them
under the Prior Agreement;
WHEREAS, the Company, Resounding Technology, Inc., a Delaware corporation
("Resounding") and ITR Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Merger Sub"), have entered into that
certain Agreement and Plan of Merger dated as of September 27, 1999 (the "Merger
Agreement"), which provides for the merger (the "Merger") of Merger Sub with and
into Resounding and the conversion of each outstanding share of Resounding's
capital stock into shares of the Company's Common Stock;
WHEREAS, in the Merger, outstanding shares of Resounding capital stock will
be converted into the right to receive shares of the Company's Common Stock
subject to the terms of, and as set forth in, the Merger Agreement and pursuant
to such Merger Agreement, the Resounding Stockholders will receive shares of the
Company's Common Stock; and
WHEREAS, certain of the Company's and Resounding's obligations under the
Merger Agreement are conditioned upon the execution and delivery of this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Existing Investors hereby agree that the Prior Agreement shall
be superseded and replaced in its entirety by this Agreement, and the parties
hereto further agree as follows:
1. Registration Rights . The Company covenants and agrees as follows:
-------------------
1.1 Definitions . For purposes of this Section 1:
-----------
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC,
other than a form designated for use in connection with the registration of
securities to be issued in an acquisition by the issuer.
(c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.13 hereof.
(d) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(e) The term "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(f) The term "Registrable Securities" means (i) the Common Stock
issuable or issued upon conversion of the Series A Preferred Stock, (ii) the
Common Stock issued pursuant to that certain Series A Preferred Stock and Common
Stock Purchase Agreement dated January 23, 1995, between the Company and the
investors listed on Schedule A thereto, (iii) the Common Stock issuable or
issued upon conversion of the Series B Preferred Stock, (iv) the Common Stock
issuable or issued upon conversion of the Series C Preferred Stock, (v) the
Common Stock issuable or issued upon conversion of the Series C-1 Preferred
Stock issuable upon the occurrence of certain events as set forth in the
Company's Amended and Restated Certificate of Incorporation, (vi) the Common
Stock issued or issuable upon conversion of the Series D Preferred Stock, (vii)
the Common Stock issued or issuable upon conversion of the Series E Preferred
Stock, (viii) the Common Stock issuable or issued pursuant to warrants issued
pursuant to that certain Series D Preferred Stock and Common Stock Warrant
Purchase Agreement dated July 18, 1997 (the "Prior Purchase Agreement"), (ix)
the Common Stock issuable upon conversion of the Preferred Stock available to
each of Lighthouse Capital Partners, L.P and Performance Systems International,
Inc. ("PSI") upon exercise of the Warrants granted to those parties, (x) the
Common Stock issuable to Intel Corporation upon exercise of that certain Warrant
dated November 18, 1996, (xi) Common Stock issuable or issued pursuant to a
Warrant to purchase Common Stock issued to PSI, (xii) the shares of Common Stock
issued to the Founders (the "Founders' Stock"); provided, however, that for the
purposes of Section 1.2, 1.12
-2-
or 1.14 such shares of Founders' Stock shall not be deemed Registrable
Securities and the Founders shall not be deemed Holders, (xiii) shares of Common
Stock issued pursuant to the Merger Agreement, including any and all Escrow
Shares (as defined in the Merger Agreement), and the shares of Common Stock
issuable upon the exercise of the RTI Warrants (as defined in the Merger
Agreement) assumed by the Company pursuant to Section 6.5(d) of the Merger
Agreement, but excluding shares of Common Stock issued in the Merger or issuable
upon the exercise of the RTI Warrants that have been sold or otherwise
transferred by the Resounding Stockholders (collectively, the "Merger Stock");
provided however, that a distribution of Merger Stock without additional
consideration, to underlying beneficial owners (such as the general and limited
partners, shareholders or trust beneficiaries of a Holder) shall not be deemed
such a sale or transfer for purposes of this definition; provided, further,
however, that for the purposes of Sections 1.2, 1.12 and 1.14, shares of Merger
Stock shall not be deemed Registrable Securities and the Resounding Stockholders
shall not be deemed Holders, and (xiv) any Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of the shares referenced in (i)-(xiii)
above, excluding in all cases, however, any Registrable Securities sold by a
person in a transaction in which his rights under this Section 1 are not
assigned.
(g) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding that are, and the number of shares of Common Stock issuable pursuant
to then exercisable or convertible securities that are, Registrable Securities.
(h) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
-------------------------
(a) If the Company shall receive at any time after the earlier
of (i) July 18, 2000, or (ii) six (6) months after the effective date of the
first registration statement for a public offering of securities of the Company
(other than a registration statement relating either to the sale of securities
to employees of the Company pursuant to a stock option, stock purchase or
similar plan or a SEC Rule 145 transaction), a written request from the Holders
of a majority of the Registrable Securities then outstanding that the Company
file a registration statement under the Act covering the resale of at least ten
percent (10%) of the Registrable Securities then outstanding (or a lesser
percentage if the anticipated aggregate offering price, net of underwriting
discounts and commissions, would exceed $5,000,000), then the Company shall:
(i) within ten (10) days of the receipt thereof, give
written notice of such request to all Holders; and
(ii) use its best efforts to effect as soon as practicable,
and in any event within sixty (60) days of the receipt of such request, the
registration under the Act of all Registrable Securities which the Holders
request to be registered, subject to the limitations of
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subsection 1.2(b), within twenty (20) days of the mailing of such notice by the
Company in accordance with Section 3.5.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to subsection 1.2(a) and the Company
shall include such information in the written notice referred to in subsection
1.2(a). The underwriter will be selected by a majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company. In such
event, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders and the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares of Registrable Securities that may be included in the underwriting
shall be allocated among all Holders thereof, including the Initiating Holders,
in proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder; provided, however, that the number of
shares of Registrable Securities to be included in such underwriting shall not
be reduced unless all other securities are first excluded entirely from the
underwriting.
(c) Notwithstanding the foregoing, if the Company shall furnish
to the Holders requesting a registration statement pursuant to this Section 1.2,
a certificate signed by the Chief Executive Officer of the Company stating that
in the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than 120 days after receipt
of the request of the Initiating Holders; provided, however, that the Company
may not utilize this right more than once in any twelve (12)-month period.
(d) In addition, the Company shall not be obligated to effect,
or to take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected two registrations
pursuant to this Section 1.2 and such registrations have been declared or
ordered effective;
(ii) During the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of filing of, and
ending on a date one hundred eighty (180) days after the effective date of, a
registration subject to Section 1.3 hereof;
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provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective; or
(iii) If the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.12 below.
1.3 Company Registration. If (but without any obligation to do so)
--------------------
the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock or other securities under the Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock plan, a registration
on any form which does not include substantially the same information as would
be required to be included in a registration statement covering the sale of the
Registrable Securities, a registration relating to a transaction covered by Rule
145 under the Act, or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after delivery of such notice by the
Company in accordance with Section 3.5, the Company shall, subject to the
provisions of Section 1.8, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
1.4 Obligations of the Company . Whenever required under this Section
--------------------------
1 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for a period of up to one hundred twenty (120)
days or until the distribution contemplated in the Registration Statement has
been completed.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in
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connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereto and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its best efforts to furnish, at the request of any
Holder requesting registration of Registrable Securities pursuant to this
Section 1, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this Section
1, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities and
(ii) a letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.
1.5 Furnish Information.
-------------------
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of distribution of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
-6-
(b) The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 if, by virtue of
subsection 1.5(a), the number of shares or the anticipated aggregate offering
price of the Registrable Securities to be included in the registration does not
equal or exceed the number of shares or the anticipated aggregate offering price
required to originally trigger the Company's obligation to initiate such
registration as specified in subsection 1.2(a) or subsection 1.12(b)(2),
whichever is applicable.
1.6 Expenses of Demand Registration. The Company shall bear and pay
-------------------------------
all expenses other than underwriting discounts and commissions incurred in
connection with registrations, filings or qualifications pursuant to Section
1.2, including (without limitation) all registration, filing and qualification
fees, printers' and accounting fees, fees and disbursements of counsel for the
Company and the fees and disbursements of one counsel for the selling Holders
selected by them; provided, however, that the Company shall not be required to
pay for any expenses of any registration proceeding begun pursuant to Section
1.2 if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered (in which
case all Participating Holders shall bear such expenses on a pro rata basis
according to the number of Registrable Securities of each participating Holder),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to one demand registration pursuant to Section 1.2.
1.7 Expenses of Company Registration. The Company shall bear and pay
--------------------------------
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.13), including (without limitation) all registration, filing, and
qualification fees, printers' and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering
-------------------------
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company; provided, however, that
the Company will use its reasonable best efforts to negotiate the terms of such
underwriting agreement to provide that no Holder (other than a Founder) shall be
required to make any customary representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Holder, its ownership of and title to the Registrable
Securities, and its intended method of distribution, and any liability of any
Holder (other than a Founder) to any underwriter or other person under such
underwriting agreement shall be limited to an amount equal to the net proceeds
that it derives from such registration. If the total amount of securities,
including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the
-7-
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling stockholders
according to the total amount of securities entitled to be included therein
owned by each selling stockholder or in such other proportions as shall mutually
be agreed to by such selling stockholders) but in no event shall (i) the amount
of securities of the selling Holders included in the offering be reduced below
twenty-five percent (25%) of the total amount of securities included in such
offering, (ii) notwithstanding (i) above, any shares being sold by a stockholder
exercising a demand registration right similar to that granted in Section 1.2 be
excluded from such offering or (iii) any securities held by the Founders or any
person who is not selling Registrable Securities be included if any securities
held by any selling Holder are excluded. For purposes of the preceding
parenthetical concerning apportionment, for any selling stockholder that is a
Holder of Registrable Securities and which is a partnership, corporation or
limited liability company, the partners, retired partners and stockholders of
such Holder, or the estates and family members of any such partners, members,
retired members and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling stockholder," and
any pro rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as defined in
this sentence.
1.9 Delay of Registration. No Holder shall have any right to obtain
---------------------
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act,
or the 1934 Act, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act or any
rule or regulation promulgated under the Act, or the 1934 Act; and the Company
will pay to each such Holder, underwriter or controlling person, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld or
-8-
delayed), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, or the 1934 Act, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection 1.10(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.10(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld or delayed; provided further, that, in no event shall any indemnity
under this subsection 1.10(b) exceed the net proceeds from the offering received
by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
1.10 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 1.10, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is for
any reason unavailable or insufficient to hold harmless an indemnified party
with respect to any loss,
-9-
liability, claim, damage, or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. Notwithstanding the foregoing, in no event
shall any contribution under this subsection 1.10(d) by a selling Holder exceed
the net proceeds from the offering received by such Holder.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
(f) The obligations of the Company and Holders under this Section 1.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934 . With a view to
---------------------------------------------
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
following the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
after ninety (90) days following the effective date of the first registration
statement filed by the Company), the Act and the 1934
-10-
Act (at any time after it has become subject to such reporting requirements), or
that it qualifies as a registrant whose securities may be resold pursuant to
Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC which
permits the selling of any such securities without registration or pursuant to
such form.
1.12 Form S-3 Registration. In case the Company shall receive from
---------------------
any Holder or Holders a written request or requests that the Company effect
a registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this section 1.12: (1) if
Form S-3 is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of less than
$500,000; (3) if the Company shall furnish to the Holders a certificate signed
by the President of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such Form S-3 Registration to be effected at
such time, in which event the Company shall have the right to defer the filing
of the Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Holder or Holders under this Section
1.12; provided, however, that the Company shall not utilize this right more than
once in any twelve (12) month period; (4) if the Company has, within the twelve
(12) month period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.12; or (5)
in any particular jurisdiction in which the Company would be required to qualify
to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders and keep such registration statement effective for up to one
hundred eighty (180) days or until the distribution contemplated in the
registration statement has been completed. All expenses, other than underwriting
discounts, commissions or other selling expenses, incurred in connection with a
registration requested pursuant to Section 1.12, including (without limitation)
all registration,
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filing, qualification, printers' and accounting fees and the reasonable fees and
disbursements of one counsel for the selling Holder or Holders and counsel for
the Company, shall be borne by the Company. Registrations effected pursuant to
this Section 1.12 shall not be counted as demands for registration or
registrations effected pursuant to Sections 1.2 or 1.3, respectively.
1.13 Assignment of Registration Rights . The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities who, after such assignment or transfer, holds at
least 200,000 shares of Registrable Securities (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including without limitation the provisions of Section 1.15 below;
(c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act, (d) the CSK Entities on Schedule A shall
be treated as a single Investor, all of which together, subject to the 200,000
share requirement, shall be deemed a "Major Investor" and such 200,000 share
minimum shall not apply to transfers of Registrable Securities among the
entities indicated as CSK Entities on Schedule A or their affiliates, (e)
Technology Crossover Ventures II. L.P. and its affiliated funds indicated on
Schedule A hereto shall be treated as a single Investor, all of which together
shall, subject to the 200,000 share requirement, be deemed a "Major Investor"
and (f) Cox Technology Investments, Inc., Xxx Enterprises, Inc. and its
affiliates (collectively, "Cox") shall be treated as a single investor, all of
which together shall, subject to the 200,000 shares requirement, be deemed a
"Major Investor" and Cox shall have the right to assign its registrations rights
hereunder to any of its affiliates; provided, however, that each of Cox and its
affiliates agree to be bound by the terms and conditions of this Agreement,
including, without limitation the terms and conditions set forth in this Section
1.13. For the purposes of determining the number of shares of Registrable
Securities held by a transferee or assignee, the holdings of transferees and
assignees of a partnership who are partners or retired partners of such
partnership (including spouses and ancestors, lineal descendants and siblings of
such partners or spouses who acquire Registrable Securities by gift, will or
intestate succession) shall be aggregated together and with the partnership;
provided that all assignees and transferees who would not qualify individually
for assignment of registration rights shall have a single attorney-in-fact for
the purpose of exercising any rights, receiving notices or taking any action
under this Section 1.
1.14 Limitations on Subsequent Registration Rights . From and after
---------------------------------------------
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of at least sixty-six and two-thirds percent (66 2/3%) of
the outstanding Preferred Stock (or Common Stock issued upon conversion of the
Preferred Stock), enter into any agreement with any holder or prospective holder
of any securities of the Company which (a) would allow such holder or
prospective holder to include such securities in any registration filed under
Section 1.2 or Section 1.3 hereof, unless under the terms of such agreement,
such holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of his
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securities will not reduce the amount of the Registrable Securities of the
Holders which is included, (b) would allow such holder or prospective holder to
make a demand registration which could result in such registration statement
being declared effective prior to the earlier of either of the dates set forth
in subsection 1.2(a) or within one hundred twenty (120) days of the effective
date of any registration effected pursuant to Section 1.2 or (c) would grant
registration rights to such holder or prospective holder substantially similar
to those granted hereunder that are on a parity with, superior or prior to the
registration rights granted hereunder.
1.15 "Market Stand-Off" Agreement -. Each Holder hereby agrees
---------------------------
that, during the period of duration specified by the Company and an underwriter
of common stock or other securities of the Company, following the date of the
first sale to the public pursuant to a registration statement of the Company
filed under the Act, it shall not, to the extent requested by the Company and
such underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any Registrable Securities held by it at any time during such period
except common stock included in such registration; provided, however, that:
(a) such agreement shall be applicable only to the first registration
statement of the Company which covers common stock (or other securities) to be
sold on its behalf to the public in an underwritten offering;
(b) all officers and directors of the Company, all one percent (1%)
stockholders and all other persons with registration rights (whether or not
pursuant to this Agreement) are subject to similar restrictions;
(c) such market stand-off time period shall not exceed one hundred and
eighty (180) days; and
(d) any discretionary waiver or termination of the restrictions of
such agreements by the Company or the representatives of the underwriters shall
apply to all persons subject to such agreements pro rata based on the number of
shares of Registrable Securities held by such persons.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in this
Section 1.15 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated
in the future, or a registration relating solely to a Commission Rule 145
transaction on Form S-4 or similar forms which may be promulgated in the future.
1.16 Termination of Registration Rights .
----------------------------------
-13-
(a) No Holder shall be entitled to exercise any right provided for in
this Section 1 after five (5) years following the closing of the sale of
securities pursuant to a registration statement filed by the Company under the
Act in connection with a firm commitment underwritten offering of its securities
to the general public resulting in aggregate net proceeds to the Company of more
than $15,000,000 at a public offering price per share (prior to underwriting
discounts and commissions) of at least $10.80 (as adjusted to reflect subsequent
stock dividends, stock splits, combinations or recapitalizations).
(b) In addition, the right of any Holder to request registration or
inclusion in any registration pursuant to Section 1.3 shall terminate on the
closing of the first Company-initiated registered public offering of Common
Stock of the Company if all shares of Registrable Securities held or entitled to
be held upon conversion by such Holder may immediately be sold under Rule 144
during any ninety (90)-day period, or on such date after the closing of the
first Company-initiated registered public offering of Common Stock of the
Company as all shares of Registrable Securities held or entitled to be held upon
conversion by such Holder may immediately be sold under Rule 144 during any
ninety (90)-day period; provided, however, that the provisions of this Section
1.16(b) shall not apply to any Holder who owns more than 500,000 shares (as
adjusted to reflect subsequent stock dividends, stock splits, combinations or
recapitalizations) of the Company's outstanding stock until such time as such
Holder owns less than 500,000 shares (as adjusted to reflect subsequent stock
dividends, stock splits, combinations or recapitalizations) of the outstanding
stock of the Company.
(c) The registration rights granted to a Founder shall terminate as to
such Founder at such time as such Founder is no longer providing services to the
Company as a employee, director or consultant.
2. Covenants of the Company.
------------------------
2.1 Qualified Small Business Stock. The Company shall use
------------------------------
commercially reasonable efforts to cause shares of Series D Preferred Stock, the
Common Stock issued or issuable upon conversion of the Series D Preferred Stock,
the Common Stock issued upon exercise of the warrants issued pursuant to the
Prior Purchase Agreement, the shares of Series E Preferred Stock issued pursuant
to the Purchase Agreement and the Common Stock issued or issuable upon
conversion of the Series E Preferred Stock to qualify as "qualified small
business stock" as defined in Section 1202(c) of the Internal Revenue Code of
1986, as amended (the "Code"). The Company shall submit to its stockholders
(including the Investors) and to the Internal Revenue Service any reports that
may be required under Section 1202(d)(1)(C) of the Code and any related Treasury
Regulations. In addition, within ten (10) days after any Investor has delivered
to the Company a written request therefor, the Company shall deliver to such
Investor a written statement informing the Investor whether, to the Company's
best knowledge, such Investor's interest in the Company constitutes "qualified
small business stock" as defined in Section 1202(c) of the Code. The Company's
obligation to furnish the written statement pursuant to this Section 2.1 shall
continue notwithstanding the fact that a class of the Company's stock may be
traded on an established securities market.
-14-
2.2 Employee Stock. With respect to any shares issued or options
--------------
or rights granted, unless the Board of Directors of the Company unanimously
agrees otherwise, the Company shall cause each Founder, member of the Board of
Directors and employee of the Company to enter into an agreement (i) providing
for vesting of such shares or options or rights over forty-eight (48) months,
with no shares or options or rights being vested for twelve (12) months from the
date of issuance or grant, as the case may be, at which time 12/48ths of the
shares or options or rights shall be vested; (ii) providing for the repurchase
price in the event the Holder's employment with or service to the Company
terminates; (iii) under which the Holder agrees to a market standoff requested
by the Company or the underwriters of any public offering of the Company's
securities, substantially as set forth in Section 1.15; (iv) providing for a
right of first refusal in favor of the Company with respect to both vested and
unvested shares; and (v) providing for acceleration of vesting of such shares or
options or rights upon the involuntary termination of employment subsequent to a
change of control of the Company.
3. Miscellaneous.
-------------
3.1 Successors and Assigns. Except as otherwise provided herein, the
---------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
3.2 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Delaware as applied to agreements among
California residents entered into and to be performed entirely within Delaware.
3.3 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon the
fifth day following deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties.
3.6 Expenses. If any action at law or in equity is necessary to
--------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable
-15-
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
3.7 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities then
outstanding, not including Founders' Stock and Merger Stock; provided that if
such amendment has the effect of affecting the Founders' Stock or Merger Stock
(i) in a manner different than securities issued to the Investors and (ii) in a
manner adverse to the interests of the holders of the Founders' Stock or Merger
Stock, as applicable, then such amendment shall require the consent of the
holder or holders of a majority of the Founders' Stock or Merger Stock, as
applicable. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and the
Company.
3.8 Addition of PSI. Notwithstanding Section 3.7 above, the
---------------
Company shall have the right to add PSI as a party to this Agreement without any
further action on the part of the Investors, the Founders or any other holders
of Registrable Securities. Upon PSI's execution of this Agreement, PSI shall
thereafter be added to Schedule A and shall be granted all the rights and
privileges, and be subject to all of the terms and conditions, of an Investor
under this Agreement.
3.9 Severability. If one or more provisions of this Agreement are
------------
held to be invalid, illegal or unenforceable, it shall, to the extent possible,
be modified in such a manner as to be valid, legal and enforceable but so as to
most nearly retain the intent of the parties, and if such modification is not
possible, such provision shall be excluded from this Agreement and the balance
of the Agreement shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
3.10 Aggregation of Stock. All shares of Registrable Securities
--------------------
held or acquired by affiliated entities or persons shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.
3.11 Entire Agreement. This Agreement (including the Schedules
----------------
hereto) constitutes the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.
[REST OF PAGE LEFT INTENTIONALLY BLANK]
-16-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
MPATH INTERACTIVE, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------------
Xxxx Xxxxxxxxx, President
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
INVESTORS:
TCV II, V.O.F.
a Netherlands Antilles General Partnership
By: Technology Crossover Management II, L.L.C.
Its: Investment General Partner
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Address: Technology Crossover Ventures
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Technology Crossover Ventures
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
Technology Crossover Ventures II, L.P.,
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Address: Technology Crossover Ventures
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Technology Crossover Ventures
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
TCV II (Q), L.P.,
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Address: Technology Crossover Ventures
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Technology Crossover Ventures
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
TCV II Strategic Partners, L.P.,
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Address: Technology Crossover Ventures
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Technology Crossover Ventures
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
Technology Crossover Ventures II, C.V.,
a Netherlands Antilles Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: Investment General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Address: Technology Crossover Ventures
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Technology Crossover Ventures
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
INTEL CORPORATION
By: /s/ Xxxx Xxxx
-----------------------------
Its: Assistant Treasurer
-----------------------------
INTEL CORPORATION
Print Name: Xxxx Xxxx
-----------------------
Address: Intel Corporation
RNG - 46
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000-0000
ATTN: M&A PORTFOLIO MANAGER
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
[LETTERHEAD]
[LOGO OF INTEL]
October 4, 1999
To whom it may concern,
I hereby designate Xxxx Xxxx to act on my behalf during my absence from the
office October 5 through October 7, 1999 as authorized by the Intel Corporation
Board of Directors' Resolutions dated July 16, 1997 (general treasury),
September 17, 1997 (banking), and July 21, 1999 (corporate business development)
(and the corresponding Board of Directors' Resolutions of Intel Corporation's
direct subsidiaries), and the Intel Corporation Board of Directors' Resolutions
dated May 20, 1997 (temporary delegations of authority).
Below is the true and authentic signature of Xxxx and, for internal accounting
purposes, his initials.
/s/ Xxxx Xxxx [INITIALS]
--------------------- ------------
Xxxx Xxxx Initials
Assistant Treasurer,
Cash Management and Systems
Sincerely,
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Vice President and
Treasurer
INTEL CORPORATION
An Equal Opportunity Employer
IVP Broadband Fund, L.P.
By its General Partner
IVP Broadband Management, LLC
By its Managing Director,
Institutional Venture Management VIII, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
, Managing Director
-------------
INSTITUTIONAL VENTURE PARTNERS VI, L.P.
By its General Partner
Institutional Venture Management VI, L.P.
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
, General Partner
-------------
INSTITUTIONAL VENTURE MANAGEMENT VI, L.P.
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
, General Partner
-------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IVP FOUNDERS FUND I, L.P.
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
ACCEL IV L.P.
By: Accel IV Associates L.P.
Its: General Partner
By: /s/ X. Xxxxxx Sednaoui
----------------------------------
General Partner
ACCEL INVESTORS `94 L.P.
By: /s/ X. Xxxxxx Sednaoui
-------------------------------
General Partner
ACCEL KEIRETSU L.P.
By: Accel Partners & Co., Inc.
Its: General Partner
By: /s/ X. Xxxxxx Sednaoui
-------------------------------
X. XXXXXX SEDNAOUI
CHIEF FINANCIAL OFFICER
Address: c/o ACCEL PARTNERS
XXX XXXXXX XXXXXX
XXXXXXXXX XX 00000
Attn: X. XXXXXX SEDNAOUI
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' AGREEMENT
XXXXXXX X. XXXXXXXXX PARTNERS
By: /s/
--------------------------------
General Partner
PROSPER PARTNERS
By: /s/ X. Xxxxxx Sednaoui
--------------------------------
Attorney-In-Fact
Address: c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: X. Xxxxxx Sednaoui
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
CSK CORPORATION
By: /s/ Yoshiji Fukushina
----------------------------------
Its: PRESIDENT
--------------------------------
Print Name: Yoshiji Fukushina
--------------------------
Address: Shinjuku Sumitomo BLDG., 2-6-1
-----------------------------------
Nishi-Shinjuku Shinjuku-ku
-----------------------------------
Xxxxx 000-0000 XXXXX
-----------------------------------
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' AGREEMENT
CSK VENTURE CAPITAL CO., LTD.
CSK VENTURE CAPITAL CO., LTD. as Investment
Manager for CSK-1(A) Investment Fund
CSK VENTURE CAPITAL CO., LTD. as Investment
Manager for CSK-1(B) Investment Fund
CSK VENTURE CAPITAL CO., LTD. as Investment
Manager for CSK-2 Investment Fund
By: /s/ Xxxxx Xxxxxx
------------------------------------------
Its: Director
-----------------------------------------
Print Name: Xxxxx Xxxxxx
----------------------------------
Address: 7th Floor Kenchikukarkan
-------------------------------------------
5-26-20 Shiba Minato-ku
-------------------------------------------
Xxxxx 000-0000 XXXXX
-------------------------------------------
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
SPINNAKER CLIPPER FUND, L.P.,
By Xxxxxx Capital Management, L.L.C., its general
partner
By: /s/ Xxxxxxx Xxxxx
------------------------------------------
Xxxxxxx Xxxxx
Venture Partner
SPINNAKER FOUNDERS FUND, L.P.,
By Xxxxxx Capital Management, L.L.C., its general
partner
By: /s/ Xxxxxxx Xxxxx
------------------------------------------
Xxxxxxx Xxxxx
Venture Partner
SPINNAKER OFFSHORE FOUNDERS FUND
CAYMAN LIMITED
By Xxxxxx Capital Management, L.L.C., its Investment
Adviser and attorney-in-fact
By:
------------------------------------------
Xxxxxxx Xxxxx
Venture Partner
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
COX TECHNOLOGY INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Secretary
--------------------------------------
Xxxxxx X. Xxxxxx, Secretary
Address: 0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
WINFIELD CAPITAL CORP.
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Its: Chief Executive Officer
-----------------------------------------
Print Name: Xxxx X. Xxxxxx
----------------------------------
Address: 000 Xxxxxxxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx, XX 00000
-------------------------------------------
-------------------------------------------
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
COMMON STOCKHOLDERS:
-------------------------------------
Xxxxx X. Xxxxx
-------------------------------------
Xxxx Xxxxxxxxx
-------------------------------------
Xxxxx Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice-President
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxx Xxxxxx
-----------------------------
Name: Xxxx Xxxxxx
Title: CEO
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxx xx Xxxxxxxxx
-----------------------------
Name: Xxxxx X. xx Xxxxxxxxx
Title: Chief Operating Officer
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
The Berkshire Capital Investors II, L.P
The Berkshire Management Company, LLC
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
Peabody Sabot Ventures
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
Title: General Partner
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
Sabot Family Irrevocable Trust
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Trustee
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------
Trustee
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Grey X. Xxxxxxxx
-----------------------------
Name: Grey X. Xxxxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
The Berkshires Capital Investors, LP
By: The Berkshires Management Co, LLC
By: /s/ Xxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxx Xxxxx
-----------------------------
Name: Xxxx Xxxxx
Title: V.P. Corporate Communications
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ XXXX X. GOLD
-----------------------------
Name: Xxxx X. Gold
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ XXXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
Atlanta Signal Processors, Inc.
By:/s/ XXXXX X. XXXXXXXXXX
-----------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President & CEO
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ XXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxxx Xxxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ XXXXX XXXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxxx
Title:
/s/ XXXXX XXXXX
Xxxxx Xxxxx
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ XXXXX XXXXX
-----------------------------
Name: Xxxxx Xxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
/s/ Xxxxx X. Xxxx
By: /s/ Xxxxx Xxxxxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxx and
Xxxxx Xxxxxxxxxxxx as joint
Title: tenants with rights of
survivorship
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ XXXXXXX XXXXXXX
-----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Director of Technical Support
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By:/s/ Xxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxx
Title:
COMMON STOCKHOLDERS:
--------------------------------
Xxxxx X. Xxxxx
--------------------------------
Xxxx Xxxxxxxxx
--------------------------------
Brain Xxxxxxxx
RESOUNDING STOCKHOLDERS:
By: /s/ Xxxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxxx Xxxxx
Title:
SCHEDULE A
----------
LIST OF INVESTORS
-----------------
Intel Corporation
TCV II, V.O.F.
Technology Crossover Ventures II, L.P.
TCV II (Q), L.P.
TCV II Strategic Partners, L.P.
Technology Crossover Ventures II, X.X.
Xxx Technology Investments, Inc.
Electronic Arts, Inc.
Institutional Venture Partners VI
Institutional Venture Management VI
IVP Founders Fund I, L.P.
Accel IV L.P.
Accel Investors `94 L.P.
Accel Keiretsu X.X.
Xxxxxxx X. Xxxxxxxxx Partners
Xxxxxx Hill Ventures,
a California Limited Partnership
Tow Partners,
a California Limited Partnership
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
G. Xxxxxxx Xxxxx, Xx.
Xxxxxxx X. Xxxxxxx, Xx., Trustee of The Younger Living Trust U/A/D 01/25/95
Xxxxx Xxxx
Xxxx X. Lego
Xxxx X. Xxxxxx
Anvest, X.X.
Xxxxx Fargo Bank, Trustee SHV
M/P/T FBO Xxxxxxx X. Xxxxxxx
CSK Corporation*
CSK Venture Capital Co., Ltd.*
CSK-1(A) Investment Fund*
CSK-1(B) Investment Fund*
CSK-2 Investment Fund*
Viacom International, Inc.
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
Xxxxxx Xxxxx
Xx X. Xxxxxxxxxxx and Xxxxxx Xxxxxxxx,
as Joint Tenants
Xxxx X. Xxxxxxx
Mindsphere, Inc.
Insearch Management Consultants, Inc.
Xxx Xxxxxxx
Xxxxxxx X. Xxxxxxxxxxxx
Xxxxx O'Xxxxx
Xxx Jo Xxx
Xxxxxx X. Xxxxxxxxxxx
Xxxxxxxx Holdings, L.P.
Xxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxx X. Xxxxx, Xx.
Xxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxx X. XxXxxxxx
Xxxxx Xxx
WS Investments 94B
Xxxxxxx X. Xxxxxxxx
Xxxxxx Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx-Plant Family Trust U/D/T 3/12/92
Xxxxxx Xxxxxxxxx
Nissho Iwai Corporation
Xxxxxxxx & Xxxxxxxxx
Xxxx X. XxXxxxxx
Xxxx Xxxxxxx
Xxxx Xxxxxxxx
Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxxxx
Xxxx Xxxxxxxxxx
_______________________
*Referred to collectively as the CSK Entities.
SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
SCHEDULE B
----------
LIST OF RESOUNDING STOCKHOLDERS
-------------------------------
[DRAFT LIST - SUBJECT TO CHANGE]
Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxx X. Xxxxxxxx
Xxxxx X. xx Xxxxxxxxx
Xxxxxx X. Clebesch
Xxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
The Berkshires Capital Investors I
The Berkshires Capital Investors II
Peabody/Sabot Ventures
Sabot Family Irrevocable Trust
Peabody Family Ventures
Xxxx X. Gold
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxx and Xxxxx Xxxxx
Xxxx Xxxxxx Retirement Plan
Xxxxx X. Xxxx and Xxxxx Xxxxxxxxxxxx
Xxxxxxxx Xxxxx
Atlanta Signal Processors, Inc.
