AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this
"Agreement"), dated as of May 4, 2001, is among FalconStor, Inc., a Delaware
corporation (the "Company"), Network Peripherals Inc., a Delaware corporation
("NPI") and Empire Acquisition Corp., a Delaware corporation and a wholly-owned
Subsidiary of NPI ("Merger Sub"). Certain capitalized and non-capitalized terms
used herein are defined in Section 8.13.
RECITALS
WHEREAS, the Boards of Directors of the Company, NPI and Merger Sub
each have, in light of and subject to the terms and conditions set forth herein,
approved this Agreement and the transactions contemplated hereby, including the
Merger, and declared the Merger advisable and fair to, and in the best interests
of, their respective stockholders;
WHEREAS, the Company and NPI are parties to that certain Option
Agreement, dated March 30, 2001, under which the Company granted to NPI an
option to merge with the Company pursuant to the terms of this Agreement and NPI
has exercised its rights under the Option Agreement in accordance with the terms
therein;
WHEREAS, pursuant to the Merger, among other things, and subject to the
terms and conditions of this Agreement, all of the issued and outstanding shares
of capital stock of the Company, other than such shares held by NPI, Merger Sub
or the Company, shall be converted into the right to receive shares of common
stock, par value $0.001 per share, of NPI (the "NPI Common Stock");
WHEREAS, as an inducement to NPI and Merger Sub to enter into this
Agreement, (i) certain stockholders of the Company have previously entered into
a voting agreement in the form attached hereto as Exhibit A ("Company Voting
Agreement") pursuant to which, among other things, such stockholders have agreed
to vote all shares of capital stock of the Company owned by them in favor of the
Merger (ii) all stockholders of the Company have entered into that certain
Second Amended and Restated Stockholders Agreement dated as of March 30, 2001,
by and among the Company and the Persons set forth on Schedule I thereto (the
"Stockholders Agreement"), and all officers and directors of the Company will
have, at the Effective Time entered into a lock-up agreements in the form
attached hereto as Exhibit B ("Company Lockup Agreement") pursuant to which,
among other things, such persons will agree to refrain from selling shares of
NPI Common Stock during a specified period following consummation of the Merger
and (iii) all affiliates of the Company will have, prior to the consummation of
the Merger, entered into an affiliate agreement in the form attached hereto as
Exhibit C ("Affiliate Agreement");
WHEREAS, as an inducement to the Company to enter this Agreement, (i)
certain stockholders of NPI have concurrently herewith entered into a voting
agreement in the form attached hereto as Exhibit D ("NPI Voting Agreement")
pursuant to which, among other things, such persons have agreed to vote all
capital stock of NPI owned by them in favor of the Merger and (ii) all officers,
directors and certain stockholders of NPI will have, at the Effective Time,
entered into lock-up agreements in the form attached hereto as Exhibit E ("NPI
Lock-up Agreement") pursuant to which, among other things, such stockholders
will agree to refrain from selling shares of NPI Common Stock during a specified
period following consummation of the Merger;
WHEREAS, 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"); and
WHEREAS, the Company, NPI and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger as set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, NPI and Merger Sub hereby
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time and upon the terms and
subject to the conditions of this Agreement and in accordance with the
applicable provisions of the Delaware General Corporation Law ("Delaware Law"),
Merger Sub shall be merged with and into the Company (the "Merger"). Following
the Merger, the Company shall continue as the surviving corporation (the
"Surviving Corporation"), and the separate corporate existence of Merger Sub
shall cease.
Section 1.2 Effective Time. Subject to the provisions of this
Agreement, the Company, NPI and Merger Sub shall cause the Merger to be
consummated by filing an appropriate certificate of merger in the form attached
hereto as Exhibit F and other appropriate documents (the "Certificate of
Merger") with the Secretary of State of the State of Delaware in such form as
required by, and executed in accordance with, the relevant provisions of
Delaware Law, as soon as practicable on the Closing Date. The Merger shall
become effective upon the filing of the Certificate of Merger (the "Effective
Time").
Section 1.3 Closing of the Merger. The closing of the Merger (the
"Closing") will take place at a time and on a date to be specified by the
parties (the "Closing Date"), which shall be no later than the third business
day after satisfaction or waiver of the conditions set forth in ARTICLE VI
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions), at the
offices of [Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000,] or at such other time, date or place as agreed to in
writing by the parties hereto.
Section 1.4 Effects of the Merger. The Merger shall have the effects
set forth in this Agreement, the Certificate of Merger and the applicable
provisions of Delaware Law. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all of the properties, rights,
privileges, powers and franchises of Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Merger Sub shall become
the debts, liabilities and duties of the Surviving Corporation.
Section 1.5 Directors and Officers.
(a) NPI. As of the Effective Time, (i) the directors of NPI
shall be comprised in accordance with Schedule 1.5 hereto and (ii) the
individuals listed on Schedule 1.5 hereto shall have been appointed as the
officers of NPI in accordance with Schedule 1.5 hereto.
(b) Surviving Corporation. The directors of the Surviving
Corporation shall be comprised in accordance with Schedule 1.5 hereto and shall
hold office in accordance with the certificate of incorporation and bylaws of
the Surviving Corporation until their successors are duly elected or appointed
and qualified or until their earlier death, resignation or removal. The officers
of the Company at the Effective Time shall be the initial officers of the
Surviving Corporation and shall hold office in accordance with the certificate
of incorporation and bylaws of the Surviving Corporation until their successors
are duly elected or appointed and qualified or until their earlier death,
resignation or removal.
Section 1.6 Certificate of Incorporation and Bylaws.
(a) NPI. The certificate of incorporation and bylaws of NPI in
effect immediately prior to the Effective Time shall remain in full force and
effect after the Effective Time; provided, however, that Article FIRST of the
certificate of incorporation of NPI shall be amended to read in its entirety as
follows: " The name of the corporation is FalconStor, Inc." until thereafter
amended as provided by law.
(b) Surviving Corporation. Effective immediately following the
Merger, the certificate of incorporation of Merger Sub, as in effect immediately
prior to the Effective Time, shall be amended in its entirety to read as set
forth in the Certificate of Merger. Effective immediately following the Merger,
the bylaws of Merger Sub, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation until amended in accordance
with applicable Law.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Shares.
(a) By action of the holders of the outstanding shares of
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
(collectively, "Company Preferred Stock"), each share of Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock outstanding
immediately prior to the Effective Time shall be converted immediately prior to
the Effective Time (subject to the satisfaction of the conditions set forth in
Section 6.1 and Section 6.3) into that number of shares of Company's common
stock, par value $0.001 (the "Company Common Stock") into which one share of
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
is then convertible.
(b) At the Effective Time, each outstanding share of common
stock, par value $.001 per share, of Merger Sub shall, by virtue of the Merger
and without any action on the part of the Company, NPI or Merger Sub, be
converted into one fully paid and non-assessable share of common stock of the
Surviving Corporation.
(c) At the Effective Time, each share of Company Common Stock,
issued and outstanding immediately prior to the Effective Time (individually, a
"Share" and collectively, the "Shares") (other than (i) Shares held by the
Company, (ii) Shares held by NPI or Merger Sub or (iii) Dissenting Shares (as
hereinafter defined)) shall, by virtue of the Merger and without any action on
the part of NPI, Merger Sub or the Company or any holder thereof, be converted
into and be exchangeable for the right to receive the number (rounded to the
nearest ten thousandth) of fully paid and non-assessable shares of NPI Common
Stock equal to the Exchange Ratio.
(d) For purposes of this Agreement, the "Exchange Ratio" shall
be determined in accordance with the following formula:
B-C [
E = 2(X + O) + --- [2(X + O)]
B [
-------------------------
Y + V
where E = the Exchange Ratio
X = all shares of NPI Common Stock issued and outstanding
as of two days prior to the NPI Stockholders Meeting
O = all shares of NPI Common Stock issuable under
outstanding, vested, in-the-money options to purchase
such stock as of two days prior to the NPI
Stockholders Meeting
C = NPI's cash, cash equivalents and short-term
investments calculated in accordance with GAAP minus
any estimated cash payments due under agreements with
certain members of NPI's management resulting from the
Merger (the "Management Agreements") plus $25,000,000,
calculated as of the end of the calendar month
immediately prior to the Effective Time, without
giving effect to reductions in cash for payment of
transaction expenses related to the Merger by NPI
prior to the Effective Time (the "Closing Cash");
provided that for purposes of this formula, Closing
Cash shall not exceed $90,000,000. For purposes of
this paragraph, estimated cash payments due under the
Management Agreements shall be determined (a) using
the closing sales price of one share of NPI Common
Stock on Nasdaq two days prior to the NPI
Stockholders' Meeting and (b) by giving effect to any
acceleration of vesting of options caused by the
Closing
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B = $90,000,000
Y = all outstanding shares of Company Common Stock
(assuming conversion of all outstanding shares of
Company Preferred Stock into shares of Company Common
Stock) minus shares of Company Common Stock or Company
Preferred Stock owned by NPI or the Company,
calculated two days prior to the NPI Stockholders'
Meeting
V = all shares of Company Common Stock issuable under
outstanding, vested, in-the-money options or warrants
to purchase such stock or other securities convertible
or exchangeable for shares of Company Common Stock,
calculated two days prior to the NPI Stockholders'
Meeting
All such shares of NPI Common Stock issued pursuant to this Section 2.1,
together with any cash paid in lieu of fractional shares of NPI Common Stock to
be paid pursuant to Section 2.7, are referred to herein as the "Merger
Consideration."
(e) At the Effective Time, each Share of Company Common Stock
owned by NPI, Merger Sub or the Company immediately prior to the Effective Time
shall be canceled and extinguished without any conversion thereof and no
consideration shall be delivered in exchange therefor.
(f) If, between the date of this Agreement and the Effective
Time, either (i) the outstanding shares of Company Common Stock, Series A
Preferred Stock, Series B Preferred Stock or Series C Preferred Stock shall have
been changed into a different number of shares or a different class by reason of
any stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, or any similar event, or (ii) the number of
shares of Company Common Stock issuable upon conversion of each share of Series
A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock shall
have been changed pursuant to contract, an anti-dilution adjustment provision
contained in the Company's certificate of incorporation or otherwise, the
calculation of the Exchange Ratio shall be correspondingly adjusted to the
extent necessary to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, change in conversion
ratio or such similar event.
(g) If, between the date of this Agreement and the Effective
Time, the outstanding shares of NPI Common Stock shall have been changed into a
different number of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, or any similar event, the calculation of the Exchange Ratio shall be
correspondingly adjusted to the extent necessary to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, or such similar event.
Section 2.2 Stock Options. At the Effective Time, the Company Stock
Options, whether vested or unvested, will be assumed by NPI ("Assumed Stock
Options"). Section 2.2 of the Company Disclosure Schedule hereto sets forth a
true and complete list as of the date hereof of all holders of outstanding
options to purchase shares of Company Common Stock ("Company Stock Options"),
including the number of shares of Company Common Stock subject to each such
option, the exercise or vesting schedule, the exercise price per share and the
term of each such option. On the Closing Date, the Company shall deliver to NPI
an updated Section 2.2 of the Company Disclosure Schedule hereto current as of
such date. Each such option so assumed by NPI under this Agreement shall
continue to have, and be subject to, the same terms and conditions set forth in
the Company Stock Option Plan ("Company Option Plan") and any other document
governing such option immediately prior to the Effective Time, except that (a)
such option will be exercisable for that number of whole shares of NPI Common
Stock equal to the product of the number of shares of Company Common Stock that
were issuable upon exercise of such option immediately prior to the Effective
Time multiplied by the Exchange Ratio and rounded down to the nearest whole
number of shares of NPI Common Stock, (b) the per share exercise price for the
shares of NPI Common Stock issuable upon exercise of such assumed option will be
equal to the quotient determined by dividing the exercise price per share of
Company Common Stock at which such option was exercisable immediately prior to
the Effective Time by the Exchange Ratio, rounded up to the nearest whole tenth
of a cent and (c) any restriction on the exercisability of such Company Stock
Option shall continue in full force and effect, and the term, exercisability,
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vesting schedule and other provisions of such Company Stock Option shall remain
unchanged. Consistent with the terms of the Company Option Plan and the
documents governing the outstanding options, the Merger will not terminate any
of the outstanding options under the Company Option Plan or accelerate the
exercisability or vesting of such options or the shares of NPI Common Stock
which will be subject to those options upon NPI's assumption of the options in
the Merger. It is the intention of the parties that the options so assumed by
NPI following the Effective Time will remain incentive stock options as defined
in Section 422 of the Code to the extent such options qualified as incentive
stock options prior to the Effective Time, and the parties hereto shall use
their commercially reasonable efforts to carry out such intention. Within 10
business days after the Effective Time, NPI will issue to each person who,
immediately prior to the Effective Time was a holder of an outstanding option
under the Company Option Plan a document in form and substance reasonably
satisfactory to the Company evidencing the foregoing assumption of such option
by NPI. NPI agrees to file with the Securities and Exchange Commission ("SEC")
after the Closing a registration statement on Form S-8 covering the shares of
NPI Common Stock issuable pursuant to Assumed Stock Options. The Company shall
cooperate with and assist NPI in the preparation of such registration statement.
Section 2.3 Exchange Fund. Prior to the Effective Time, NPI shall
appoint a commercial bank or trust company reasonably acceptable to the Company
to act as exchange agent hereunder for the purpose of exchanging Shares for the
Merger Consideration (the "Exchange Agent"). At or prior to the Effective Time,
NPI shall deposit with the Exchange Agent, in trust for the benefit of holders
of Shares, certificates representing the NPI Common Stock issuable pursuant to
Section 2.1 in exchange for outstanding Shares and an estimated amount of cash
sufficient to pay the cash payable in lieu of fractional shares pursuant to
Section 2.7. NPI agrees to make available to the Exchange Agent from time to
time as needed, cash sufficient to pay cash in lieu of fractional shares
pursuant to Section 2.7 and any dividends and other distributions pursuant to
Section 2.5. Any cash and certificates of NPI Common Stock deposited with the
Exchange Agent shall hereinafter be referred to as the "Exchange Fund."
Section 2.4 Exchange Procedures. As soon as reasonably practicable
after the Effective Time (and in any event within three business days after the
Effective Time), NPI and the Surviving Corporation shall use their commercially
reasonable efforts to cause the Exchange Agent to mail to each holder of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates") (a) a letter of transmittal
which shall specify that delivery shall be effective, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent, and which letter shall be in customary form and have such other
provisions as NPI may reasonably specify; and (b) instructions for effecting the
surrender of such Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate to the Exchange Agent together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, and such other documents as may reasonably be required by the Exchange
Agent, the holder of such Certificate shall be entitled to receive in exchange
therefor (i) shares of NPI Common Stock representing, in the aggregate, the
whole number of shares that such holder has the right to receive pursuant to
Section 2.1 (after taking into account all Shares then held by such holder) and
(ii) a check in the amount equal to the cash that such holder has the right to
receive pursuant to the provisions of this ARTICLE II, including cash in lieu of
any dividends and other distributions pursuant to Section 2.5 and cash in lieu
of fractional shares pursuant to Section 2.7, and the Shares formerly
represented by such Certificate and the Certificate so surrendered shall
forthwith be canceled. Until surrendered as contemplated by this Article II,
each Certificate shall be deemed at any time after the Effective Date to
represent only the right to receive the Merger Consideration payable upon
surrender of the Certificates. No interest will be paid or will accrue on any
cash payable pursuant to Section 2.5 or Section 2.7. In the event of a transfer
of ownership of Shares which is not registered in the transfer records of the
Company, shares of NPI Common Stock evidencing, in the aggregate, the proper
number of shares of NPI Common Stock, a check in the proper amount of cash in
lieu of any fractional shares of NPI Common Stock pursuant to Section 2.7 and
any dividends or other distributions to which such holder is entitled pursuant
to Section 2.5, may be issued with respect to such Shares to such a transferee
if the Certificate representing such Shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable Transfer Taxes have been paid.
Section 2.5 Distributions with Respect to Unsurrendered Certificates.
No dividends or other distributions declared or made with respect to shares of
NPI 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 NPI
Common Stock that such holder would be entitled to receive upon surrender of
such Certificate and no cash payment in lieu of fractional shares of
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NPI Common Stock shall be paid to any such holder pursuant to Section 2.7 until
such holder shall surrender such Certificate in accordance with Section 2.4.
Subject to the effect of applicable Laws (as hereinafter defined), following
surrender of any such Certificate, there shall be paid to such holder of shares
of NPI Common Stock issuable in exchange therefor, without interest, (a)
promptly after the time of such surrender, the amount of any cash payable in
lieu of fractional shares of NPI Common Stock to which such holder is entitled
pursuant to Section 2.7 and the amount of dividends or other distributions with
a record date after the Effective Time theretofore paid with respect to such
whole shares of NPI Common Stock, and (b) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and a payment date subsequent to such
surrender payable with respect to such shares of NPI Common Stock.
Section 2.6 No Further Ownership Rights in Company Common Stock. All
shares of NPI Common Stock issued and cash paid upon conversion of the Shares in
accordance with the terms of ARTICLE I and this ARTICLE II (including any cash
paid pursuant to Section 2.5 and Section 2.7) shall be deemed to have been
issued or paid in full satisfaction of all rights pertaining to the Shares.
Section 2.7 No Fractional Shares of NPI Common Stock.
(a) No certificates or scrip of shares of NPI Common Stock
representing fractional shares of NPI Common Stock or book-entry credit of the
same 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 have
any rights of a stockholder of NPI or a holder of shares of NPI Common Stock.
(b) Notwithstanding any other provision of this Agreement, each
holder of Shares exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of NPI 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 the product of (i) such
fractional part of a share of NPI Common Stock multiplied by (ii) the reported
closing sales price of one share of NPI Common Stock on the Nasdaq National
Market ("Nasdaq") at the Effective Time. As promptly as practicable after the
determination of the aggregate amount of cash to be paid to holders of
fractional interests, the Exchange Agent shall notify NPI and NPI shall deposit
such amount with the Exchange Agent (to the extent the amount deposited with the
Exchange Agent pursuant to Section 2.3 is insufficient), and shall cause the
Exchange Agent to forward payments to such holders of fractional interests
subject to and in accordance with the terms hereof.
Section 2.8 Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates for six months
after the Effective Time shall be delivered to the Surviving Corporation or
otherwise on the instruction of the Surviving Corporation, and any holders of
the Certificates who have not theretofore complied with this ARTICLE II shall
thereafter look only to the Surviving Corporation and NPI for the Merger
Consideration with respect to the Shares formerly represented thereby to which
such holders are entitled pursuant to Section 2.1 and Section 2.4, any cash in
lieu of fractional shares of NPI Common Stock to which such holders are entitled
pursuant to Section 2.7 and any dividends or distributions with respect to
shares of NPI Common Stock to which such holders are entitled pursuant to
Section 2.5. Any such portion of the Exchange Fund remaining unclaimed by
holders of Shares five years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Entity) shall, to the extent permitted by
law, become the property of the Surviving Corporation free and clear of any
claims or interest of any person previously entitled thereto.
Section 2.9 No Liability. None of NPI, Merger Sub, the Company, the
Surviving Corporation or the Exchange Agent shall be liable to any person in
respect of any Merger Consideration from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
Section 2.10 Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by NPI on a daily
basis. Any interest and other income resulting from such investments promptly
shall be paid to NPI.
Section 2.11 Lost Certificates. If 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 and, if
required by
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the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity by such
person against any claim that may be made against the Surviving Corporation with
respect to such Certificate, the Exchange Agent will deliver in exchange for
such lost, stolen or destroyed Certificate the applicable Merger Consideration
with respect to the Shares formerly represented thereby and any unpaid dividends
and distributions on shares of NPI Common Stock deliverable in respect thereof,
pursuant to this Agreement.
Section 2.12 Backup Withholding Rights. Each of NPI, the Surviving
Corporation and the Exchange Agent shall be entitled to deduct and withhold from
the Merger Consideration otherwise payable pursuant to this Agreement to any
holder of Shares such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code and the rules and
regulations promulgated thereunder, or any provision of a tax Law. To the extent
that amounts are so withheld by NPI, the Surviving Corporation or the Exchange
Agent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the Shares in
respect to which such deduction and withholding was made by NPI, the Surviving
Corporation or the Exchange Agent, as the case may be.
Section 2.13 Tax Consequences. It is intended by the parties hereto
that the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Code. Each party hereto shall use its commercially reasonable
efforts to cause the Merger to be so qualified, shall report the transactions
contemplated by this Agreement in a manner consistent with such reorganization
treatment and will not take any position inconsistent therewith in any Tax
Return (as hereinafter defined), refund claim, litigation or otherwise unless
required to do so by law. The Merger shall be treated as a purchase for
accounting purposes.
Section 2.14 Stock Transfer Books. The stock transfer books of the
Company shall be closed immediately upon the Effective Time and there shall be
no further registration of transfers of Shares thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Exchange Agent or NPI for any reason shall be converted into the Merger
Consideration with respect to the Shares formerly represented thereby, any cash
in lieu of fractional shares of NPI Common Stock to which the holders thereof
are entitled pursuant to Section 2.7 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 2.5.
Section 2.15 Affiliates. Notwithstanding anything to the contrary
herein, no shares of NPI Common Stock or cash shall be delivered to a person who
may be deemed an "affiliate" of the Company for purposes of Rule 145 under the
Securities Act of 1933, as amended (the "Securities Act"), until such person has
executed and delivered to NPI the written agreement contemplated by Section
5.10.
Section 2.16 Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, Shares that are issued and outstanding immediately
prior to the Effective Time and which are held by stockholders who did not vote
in favor of the Merger (the "Dissenting Shares"), which stockholders comply with
all of the relevant provisions of Delaware Law (the "Dissenting Stockholders"),
shall not be converted into or be exchangeable for the right to receive the
Merger Consideration, unless and until such holders shall have failed to perfect
or shall have effectively withdrawn or lost their rights to appraisal under
Delaware Law. If any Dissenting Shareholder shall have failed to perfect or
shall have effectively withdrawn or lost such right, such holder's Shares shall
thereupon be converted into and become exchangeable for the right to receive, as
of the Effective Time, the Merger Consideration without any interest thereon.
The Company shall give NPI (a) prompt notice of any written demands for
appraisal of any Shares, attempted withdrawals of such demands and any other
instruments served pursuant to Delaware Law and received by the Company relating
to stockholders' rights of appraisal, and (b) the opportunity to direct, in its
reasonable business judgment, all negotiations and proceedings with respect to
demands for appraisal under Delaware Law. Neither the Company nor the Surviving
Corporation shall, except with the prior written consent of NPI, voluntarily
make any payment with respect to, or settle or offer to settle, any such demand
for payment. If any Dissenting Shareholder shall fail to perfect or shall have
effectively withdrawn or lost the right to dissent, the Shares held by such
Dissenting Shareholder shall thereupon be treated as though such Shares had been
converted into the right to receive the Merger Consideration pursuant to Section
2.1.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as set forth on the schedule delivered by the Company to NPI and
Merger Sub in connection with the execution and delivery of this Agreement (the
"Company Disclosure Schedule") the Company hereby represents and warrants to NPI
and Merger Sub, and except as set forth in the disclosure schedule delivered by
NPI and Merger Sub to the Company in connection with the execution and delivery
of this Agreement (the "NPI Disclosure Schedule"), NPI and Merger Sub hereby
represent and warrant to the Company, in each case as set forth in this ARTICLE
III, with the party making such representations and warranties being referred to
as the "Representing Party" and such Representing Party's Disclosure Schedule as
the "Representing Party's Disclosure Schedule." Notwithstanding the foregoing,
any representation or warranty which expressly refers to NPI or its Subsidiaries
is being made solely by NPI and Merger Sub and any representation or warranty
which expressly refers to the Company or its Subsidiaries is being made solely
by the Company.
Section 3.1 Organization, Qualification.
(a) The Representing Party is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority required for it to own
its properties and assets and to carry on its business as it is now being
conducted. The Representing Party is duly qualified to do business and is in
good standing in each jurisdiction in which the ownership of its properties or
the conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified or in good standing would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on the Representing Party or substantially delay consummation of
the transactions contemplated by this Agreement or otherwise prevent the
Representing Party from performing its obligations hereunder. As used in this
Agreement, "Material Adverse Effect" means any change, effect, event,
occurrence, state of facts or developments that (i) materially adversely affects
the assets, liabilities, business, results of operations, condition (financial
or otherwise) or prospects of the Representing Party and its Subsidiaries, taken
as a whole or (ii) adversely affects or delays the ability of the Representing
Party to consummate the transactions contemplated by this Agreement, provided,
however, that none of the following shall be deemed in themselves, either alone
or in combination, to constitute a Material Adverse Effect on a Representing
Party as indicated (A) any change in the market price or trading volume of NPI
Common Stock after the date hereof; (B) any failure by the Representing Party to
meet internal revenue or earnings projections or forecasts or published revenue
or earnings projections for any period ending (or for which revenues or earnings
are released) on or after the date of this Agreement and prior to the Effective
Time; (C) decreases in working capital substantially consistent with the NPI's
internal projections; (D) any adverse change, effect, event, occurrence, state
of facts or development, change, effect, event, occurrence, state of facts or
developments directly caused by the announcement or pendency of the Merger
(including any cancellations of or delays in customer orders, any reduction in
sales, any disruption in supplier, distributor, partner or similar relationships
or any loss of employees); (E) any adverse change in NPI's assets or results of
operations arising from actions taken by NPI reasonably intended to preserve the
Closing Cash at a level sufficient to satisfy the condition set forth in Section
6.3(b); (F) any adverse change, effect, event, occurrence, state of facts or
developments directly caused by, resulting from or attributable to conditions
affecting the data storage or networking industries as a whole or the U.S. or
world economies as a whole; (G) any adverse change, effect, event, occurrence,
state of facts or development directly resulting from or attributable or
relating to out-of-pocket fees and expenses (including legal, accounting,
investment banking and other fees and expenses) incurred in connection with the
transactions contemplated by this Agreement; or (H) any adverse change, effect,
event, occurrence, state of facts or development directly caused by compliance
with the terms of, or the taking of any action required by, this Agreement; and
provided, further, that with respect to any dispute regarding whether any
adverse change, effect, event, occurrence, state of facts or development is
"directly caused" by any of the foregoing, the Representing Party shall have the
burden of proof by a preponderance of the evidence. Each Representing Party has
made available to the other copies of its certificate of incorporation and
bylaws. Such copies of each Representing Party's certificate of incorporation
and bylaws are complete and correct and in full force and effect, and the
Representing Party is not in violation of any of the provisions of its
certificate of incorporation or bylaws.
(b) Each of the Representing Party's Subsidiaries is listed in
Section 3.1 of the Representing Party's Disclosure Schedule and is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of the Representing Party's
Subsidiaries has the
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corporate power and authority required for it to own its properties and assets
and to carry on its business as it is now being conducted and is duly qualified
to do business and is in good standing in each jurisdiction in which the
ownership of its properties or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to be so qualified
or in good standing would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on the Representing Party, taken as a
whole. All the outstanding shares of capital stock of, or other ownership
interests in, the Representing Party's Subsidiaries are duly authorized, validly
issued, fully paid and non-assessable and, with respect to such shares or
ownership interests that are owned by the Representing Party and its
Subsidiaries, are owned free and clear of all liens, claims, mortgages,
encumbrances, pledges and security interests of any kind. All the outstanding
shares of capital stock of, or other ownership interests in, the Representing
Party's Subsidiaries are wholly owned by the Representing Party, directly or
indirectly.
Section 3.2 Capital Stock.
(a) Section 3.2(a) of the Representing Party's Disclosure
Schedule sets forth as of May 4, 2001: (i) the number of authorized shares of
each class or series of capital stock of the Representing Party; (ii) the number
of shares of each class or series of capital stock of the Representing Party
which are issued and outstanding; (iii) the number of shares of each class or
series of capital stock which are held in the treasury of such Representing
Party; (iv) the number of shares of each class or series of capital stock of the
Representing Party which are reserved for issuance, indicating each specific
reservation; and (v) the number of shares of each class or series of capital
stock of such Representing Party which are subject to employee stock options or
other rights to purchase or receive capital stock granted under such Person's
stock option or other stock based employee or non-employee director benefit
plans, indicating the name of the plan, the date of grant, the number of shares
and the exercise price thereof.
(b) All the outstanding shares of capital stock of the
Representing Party are, and all shares of NPI Common Stock to be issued in the
Merger will be when issued in accordance with the terms of this Agreement, duly
authorized, validly issued, fully paid and non-assessable and issued in
compliance with all applicable U.S. state and federal securities laws. Except
for the transactions contemplated by this Agreement, (i) there are no shares of
capital stock of the Representing Party authorized, or as of the date of this
Agreement, issued or outstanding, (ii) as of the date of this Agreement there
are no authorized or outstanding options, warrants, calls, preemptive rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Representing
Party or any of its Subsidiaries, obligating the Representing Party or any of
its Subsidiaries to issue, transfer or sell or cause to be issued, transferred
or sold any shares of capital stock or other equity interest in the Representing
Party or any of its Subsidiaries or securities convertible into or exchangeable
for such shares or equity interests, or obligating the Representing Party or any
of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment, (iii)
there are no outstanding contractual obligations of the Representing Party or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Representing Party or any Subsidiary of the Representing
Party or to provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary of the Representing Party or other
entity, and (iv) there are no shareholder agreements, voting trusts or other
agreements to which the Representing Party is a party or to which it is bound
relating to the voting of any shares of the capital stock of the Representing
Party (other than the Voting Agreements). With respect to the Company, (i) the
holders of the Company Common Stock who are party to the Company Voting
Agreement hold a sufficient number of shares of Company Common Stock (or
securities convertible into Company Common Stock) to effect (A) the Company
Stockholder Approval (as defined herein) and (B) the conversion into shares of
Company Common Stock of all shares of Company Preferred Stock, and (ii) all
stockholders, directors and officers of the Company are party to and bound by at
least one of the following agreements that restricts such stockholder's rights
to sell or dispose of shares of NPI Common Stock for a specified period
following the consummation of the Merger: Company Voting Agreement, Company
Lock-Up Agreement or the Stockholders Agreement.
Section 3.3 Corporate Authority Relative to this Agreement; No
Violation.
(a) The Company has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of the Company and, except for obtaining the requisite approval of the
stockholders of the Company (the "Company Stockholder
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Approval"), as contemplated in Section 5.2 and the filing of the Certificate of
Merger, no other corporate proceedings on the part of the Company are necessary
to authorize the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company and,
assuming this Agreement constitutes a valid and binding agreement of NPI,
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as may be limited by (i)
bankruptcy laws and other similar laws affecting creditor's rights generally and
(ii) general principles of equity.
(b) NPI has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of Directors of NPI,
and other than the obtaining the requisite approval of the stockholders of NPI
(the "NPI Stockholder Approval") as contemplated in Section 5.3 and the filing
of the Certificate of Merger no other corporate proceedings on the part of NPI
are necessary to authorize the consummation of the transactions contemplated
hereby. The Board of Directors of NPI has taken all appropriate action so that
Section 203 of Delaware Law will not be applicable to the Company or to NPI for
any purpose. This Agreement has been duly and validly executed and delivered by
NPI and, assuming this Agreement constitutes a valid and binding agreement of
the Company, constitutes a valid and binding agreement of NPI, enforceable
against NPI in accordance with its terms, except as may be limited by (i)
bankruptcy laws and other similar laws affecting creditor's rights generally and
(ii) general principles of equity.
(c) Except as may be required under, and other applicable
requirements of, the Securities Act, the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"), the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), state securities or blue sky laws, and the rules and regulations of
Nasdaq, and the filing of the Certificate of Merger under Delaware Law, none of
the execution, delivery or performance of this Agreement by the Representing
Party, the consummation by the Representing Party of the transactions
contemplated hereby or compliance by the Representing Party with any of the
provisions hereof will (i) conflict with or result in any breach of any
provision of the certificate of incorporation, bylaws or similar organizational
documents of the Representing Party or any of its Subsidiaries, (ii) require any
filing with, or permit, authorization, consent or approval of, any federal,
regional, state or local court, arbitrator, tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency,
whether U.S. or foreign (a "Governmental Entity"), (iii) result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Representing Party or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound, or (iv) violate any order, writ, injunction, decree,
judgment, permit, license, ordinance, law, statute, rule or regulation ("Law")
applicable to the Representing Party, any of its Subsidiaries or any of their
properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv)
such filings, permits, authorizations, consents, approvals, violations, breaches
or defaults which are not, individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on the Representing Party or prevent or
substantially delay the consummation of the transactions contemplated hereby.
Section 3.4 Reports and Financial Statements.
(a) NPI has previously furnished or otherwise made available
(by electronic filing or otherwise) to the Company true and complete copies of:
(i) Annual Reports on Form 10-K filed with the SEC for each of the years ended
December 31, 1999 and 2000; (ii) each Quarterly Report on Form 10-Q filed with
the SEC for the three fiscal quarters occurring since the Annual Report on Form
10-K for the year ended December 31, 1999; (iii) each definitive proxy statement
filed with the SEC since December 31, 1999; (iv) each final prospectus filed
with the SEC since December 31, 1999, except any final prospectus on Form S-8;
and (v) all Current Reports on Form 8-K filed with the SEC since January 1,
2000.
As of their respective dates, such reports, proxy statements and prospectuses
filed with the SEC by NPI (collectively with, and giving effect to, all
amendments, supplements and exhibits thereto, the "SEC Reports") (i) complied as
to form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. None of NPI's Subsidiaries is
required to file any forms, reports or other documents with the SEC. The audited
consolidated financial statements and unaudited consolidated interim financial
statements included in the SEC Reports (including any related notes and
schedules) fairly present in all material respects the financial position of NPI
and its consolidated Subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods or as of the dates then ended
(subject, in the case of the unaudited interim financial statements, to normal
recurring adjustments), in each case in accordance with past practice and
generally accepted accounting principles in the United States ("GAAP")
consistently applied during the periods involved (except as otherwise disclosed
in the notes thereto). Since January 1, 2000, NPI has timely filed all reports,
registration statements and other filings required to be filed by it with the
SEC under the rules and regulations of the SEC.
(b) The Company has delivered to NPI copies of the audited
balance sheets of the Company as of December 31, 2000, together with the related
audited statements of income, stockholders' equity and changes in cash flow for
the fiscal year ended December 31, 2000, and the notes thereto (such audited
financial statements being hereinafter referred to as the "Financial
Statements"). The Financial Statements, including the notes thereto, (i) were
prepared in accordance with GAAP throughout the periods covered thereby, and
(ii) present fairly in all material respects the financial position, results of
operations and changes in cash flow of the Company and its consolidated
Subsidiaries as of such dates and for the periods then ended.
Section 3.5 No Undisclosed Liabilities. Neither the Representing Party
nor any of its Subsidiaries has any liabilities or obligations of any nature
required to be set forth on a balance sheet of the Representing Party under
GAAP, whether or not accrued, contingent or otherwise, and there is no existing
condition, situation or set of circumstances which would be expected to result
in such a liability or obligation, except (a) liabilities or obligations with
respect to NPI reflected in the SEC Reports and with respect to the Company
reflected in the Financial Statements or (b) liabilities and obligations which
are not, individually or in the aggregate, reasonably expected to have a
Material Adverse Effect on the Representing Party.
Section 3.6 No Default; Compliance with Applicable Laws. The
businesses of the Representing Party and each of its Subsidiaries is not in
conflict with, or in default or violation of, any term, condition or provision
of (i) its respective certificate of incorporation or bylaws or similar
organizational documents, (ii) any Company Material Contracts or NPI Material
Contracts, as applicable, or (iii) any federal, state, local or foreign statute,
Law, concession, grant, franchise, Permit or other governmental authorization or
approval applicable to the Representing Party or any of its Subsidiaries,
excluding from the foregoing clauses (ii) and (iii), defaults or violations
which would not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on the Representing Party.
Section 3.7 Environmental Matters.
(a) Each of the Representing Party and its Subsidiaries has
obtained all licenses, permits, authorizations, approvals and consents from
Governmental Entities which are required under any applicable Environmental Law
and necessary for it to carry on its business or operations as now conducted
("Environmental Permits"), except for such failures to have Environmental
Permits which, individually or in the aggregate, are not reasonably expected to
have a Material Adverse Effect on the Representing Party. Each of such
Environmental Permits is in full force and effect, and each of the Representing
Party and its Subsidiaries is in compliance with the terms and conditions of all
such Environmental Permits and with all applicable Environmental Laws, except
for such failures to be in full force and effect or to be in compliance which,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect on the Representing Party.
(b) There are no Environmental Claims pending, or to the
knowledge of the Representing Party, threatened, against the Representing Party
or any of its Subsidiaries, or, to the knowledge of the Representing Party, any
Person whose liability for any such Environmental Claim the Representing Party
or any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law for which reserves have not been
established in accordance with GAAP, that, individually or in the aggregate,
would have a Material Adverse Effect on the Representing Party.
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(c) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, threatened release or presence of any Hazardous Material, that
would form the basis of any Environmental Claim against the Representing Party
or any of its Subsidiaries, or for which the Representing Party or any of its
Subsidiaries is liable, except for such liabilities which, individually or in
the aggregate, are not reasonably likely to have a Material Adverse Effect on
the Representing Party.
(d) As used in this Agreement: (i) "Environmental Claim" means
any claim, action, lawsuit or proceeding by any Person which seeks to impose
liability (including, without limitation, liability for investigatory costs,
cleanup costs, governmental response costs, natural resources, damages, property
damages, personal injuries or penalties) arising out of, based on or resulting
from (A) the presence, or release or threatened release, of any Hazardous
Materials at any location, whether or not owned or operated by the Representing
Party or any of its Subsidiaries, or (B) circumstances which would give rise to
any violation, or alleged violation, of any Environmental Law; (ii)
"Environmental Law" means any law or order of any Governmental Entity relating
to (A) the generation, treatment, storage, disposal, use, handling,
manufacturing, transportation or shipment of, or (B) the environment or to
emissions, discharges, releases or threatened releases of, Hazardous Materials,
into the environment; (iii) "Hazardous Materials" means (A) any petroleum or
petroleum products, radioactive materials or friable asbestos; (B) any chemicals
or other materials or substances which are now defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
or "toxic pollutants" under any Environmental Law; and (C) pesticides.
Section 3.8 Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the Representing Party's knowledge, threatened
against the Representing Party, its Subsidiaries or any of its assets or
properties which (a) has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Representing
Party or its Subsidiaries, or (b) questions the validity of this Agreement or
any action to be taken by the Representing Party in connection with the
consummation of the transactions contemplated hereby or could otherwise prevent
or materially delay the consummation of the transactions contemplated by this
Agreement. The Representing Party and its Subsidiaries are not subject to any
outstanding order, writ, injunction or decree which has had or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Representing Party and its Subsidiaries. There is no action, suit,
proceeding or investigation pending or, to the Representing Party's knowledge,
threatened against any current or former officer, director, employee,
consultant, contractor or agent of the Representing Party (in his or her
capacity as such) which gives rise or could reasonably be expected to give rise
to a claim for contribution or indemnification against the Representing Party.
Section 3.9 Permits. The Representing Party holds, and has at all times
held, all permits, licenses, variances, exemptions, orders, and approvals of all
Governmental Entities necessary for the lawful conduct of its business (the
"Permits"), except for such Permits the absence of which would not reasonably be
expected to have a Material Adverse Effect on the Representing Party. The
Representing Party is in material compliance with the terms of the Representing
Party Permits. No investigation or review by any Governmental Entity in respect
of the Representing Party is pending or, to the Representing Party's knowledge,
threatened, nor has the Representing Party received notice from any Governmental
Entity of its intention to conduct the same.
Section 3.10 Employee Plans.
(a) Section 3.10(a) of the Representing Party's Disclosure
Schedule sets forth a true, correct and complete list of:
(i) all "employee benefit plans," as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which the Representing Party has any obligation or liability,
contingent or otherwise (the "Benefit Plans");
(ii) all employees, consultants and independent
contractors of the Representing Party; and
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(iii) all employment, consulting, termination, profit
sharing, severance, change of control, individual compensation or
indemnification agreements, and all bonus or other incentive compensation,
deferred compensation, salary continuation, disability, severance, stock award,
stock option, stock purchase, educational assistance, legal assistance, club
membership, employee discount, employee loan, credit union or vacation
agreements, policies or arrangements under which the Representing Party has any
obligation or liability (contingent or otherwise) in respect of any current or
former officer, director, employee, consultant or contractor of the Representing
Party (the "Employee Arrangements").
Benefit Plans and Employee Arrangements which cover current or former employees,
consultants, contractors, officers, or directors (or their equivalent) of the
Representing Party are separately identified, by the applicable country, on
Section 3.10(a) of the Representing Party's Disclosure Schedule.
(b) In respect of each Benefit Plan and Employee Arrangement of
the Company, a complete and correct copy of each of the following documents (if
applicable) has been made available to NPI: (i) the most recent plan and related
trust documents, and all amendments thereto; (ii) the most recent summary plan
description, and all related summaries of material modifications thereto; (iii)
the most recent Form 5500 (including, schedules and attachments); (iv) the most
recent Internal Revenue Service ("IRS") determination, opinion or notification
letter; (v) each of the stock option grant agreements used to make grants under
the Company Option Plans, and all amendments thereto; (vi) each written
employment, consulting or individual severance or other compensation agreement,
and all amendments thereto; and (vii) the most recent actuarial reports
(including for purposes of Financial Accounting Standards Board report nos. 87,
106 and 112).
(c) None of the Benefit Plans or Employee Arrangements is
subject to Title IV of ERISA, constitutes a defined benefit retirement plan or
is a multi-employer plan described in Section 3(37) of ERISA, and the
Representing Party does not have any obligation or liability (contingent or
otherwise) in respect of any such plans. The Company is not a member of a group
of trades or businesses under common control or treated as a single employer
pursuant to Section 414 of the Code.
(d) The Benefit Plans and their related trusts intended to
qualify under Sections 401 and 501(a) of the Code, respectively, have either
received a favorable determination, opinion or notification letter from the IRS
with respect to each such Benefit Plan as to its qualified status under the
Code, or has remaining a period of time under applicable Treasury regulations or
IRS pronouncements in which to apply for such a letter and make any amendments
necessary to obtain a favorable determination as to the qualified status of each
such Benefit Plans. Any voluntary employee benefit association which provides
benefits to current or former employees of the Representing Party, or their
beneficiaries, is and has been qualified under Section 501(c)(9) of the Code.
(e) All contributions or other payments required to have been
made by the Representing Party to or under any Benefit Plan or Employee
Arrangement by applicable Law or the terms of such Benefit Plan or Employee
Arrangement (or any agreement relating thereto) have been timely and properly
made.
(f) The Benefit Plans and Employee Arrangements have been
maintained and administered in all material respects in accordance with their
terms and applicable Laws. In particular, no individual who has performed
services for the Representing Party has been improperly excluded from
participation in any Benefit Plan or Employee Arrangement.
(g) There are no pending or, to the Representing Party's
knowledge, threatened actions, claims, or proceedings against or relating to any
Benefit Plan or Employee Arrangement (other than routine benefit claims by
persons entitled to benefits thereunder), and, to the knowledge of the
Representing Party, there are no facts or circumstances which could form the
basis for any of the foregoing.
(h) The Representing Party does not have any obligation or
liability (contingent or otherwise) to provide post-retirement life insurance or
health benefits coverage for current or former officers, directors, employees,
consultants or contractors of the Representing Party except (i) as may be
required under Part 6 of Title I of ERISA at the sole expense of the participant
or the participant's beneficiary, (ii) a medical expense
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reimbursement account plan pursuant to Section 125 of the Code, or (iii) through
the last day of the calendar month in which the participant terminates
employment with the Representing Party.
(i) None of the assets of any Benefit Plan is stock of the
Representing Party or any of its affiliates, or property leased to or jointly
owned by the Representing Party or any of its affiliates.
(j) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee, consultant or contractor (current, former,
or retired) of the Representing Party, (ii) increase any benefits under any
Benefit Plan or Employee Arrangement or (iii) result in the acceleration of the
time of payment of, vesting of, or other rights in respect of any such benefits
(except as which may be required by the partial or full termination of any
Benefit Plan intended to be qualified under Section 401 of the Code).
(k) The Representing Party has delivered to the other a true
and correct list of the following for each employee, consultant and contractor
of the Representing Party: base salary, any bonus obligations, immigration
status, hire date, time-off balance, an indication of the existence of a signed
assignment of invention agreement for each employee and including effective date
and term for the contract, pay rate, termination provisions, indication that
they have not received W-2 statements from the Representing Party, indication
that they have not received Representing Party employee benefits and indication
of a signed assignment of invention agreement for each consultant and
contractor.
(l) To the knowledge of the Representing Party, all employees
of the Representing Party who are not U.S. citizens but who are assigned to the
U.S. operations of the Representing Party or otherwise travel, from time to
time, to the United States on behalf of the Representing Party, possess all
applicable passports, visas and other authorizations required by the Laws of the
United States and have otherwise complied with all applicable immigration and
similar Laws of the United States.
(m) To the Representing Party's knowledge, all employees of the
Representing Party assigned to work outside the United States possess all
applicable passports, visas and other authorizations required by the Laws of the
respective countries to which they are assigned.
Section 3.11 Labor Matters.
(a) The Representing Party is not a party to any labor or
collective bargaining agreement, and no employees of the Representing Party are
represented by any labor organization. Within the preceding three years, there
have been no representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the Representing Party's knowledge,
threatened in writing to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority. Within the preceding
three years, to the Representing Party's knowledge, there have been no
organizing activities involving the Representing Party in respect of any group
of employees of the Representing Party.
(b) There are no strikes, work stoppages, slowdowns, lockouts,
material arbitrations or material grievances or other material labor disputes
pending or, to the knowledge of the Representing Party, threatened against or
involving the Representing Party. There are no unfair labor practice charges,
grievances or complaints pending or, to the Representing Party's knowledge,
threatened by or on behalf of any employee or group of employees of the
Representing Party and, to the knowledge of the Representing Party, there are no
facts or circumstances which could form the basis for any of the foregoing.
(c) There are no complaints, charges or claims against the
Representing Party pending or, to the Representing Party's knowledge, threatened
to be brought or filed with any Governmental Entity or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or
termination of employment of any individual by the Representing Party, and, to
the knowledge of the Representing Party, there are no facts or circumstances
which could form the basis for any of the foregoing.
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(d) The Representing Party is in material compliance with all
Laws relating to the employment of labor, including all such Laws relating to
wages, hours, the Worker Adjustment and Retraining Notification Act, as amended
("WARN"), collective bargaining, discrimination, civil rights, safety and
health, workers' compensation and the collection and payment of withholding
and/or Social Security Taxes and any similar Tax.
(e) There has been no "mass layoff" or "plant closing" as
defined by WARN in respect of the Representing Party within the six months prior
to the date hereof.
Section 3.12 Absence of Certain Changes or Events.
Since December 31, 2000 (i) the businesses of the Representing Party
and its Subsidiaries have been conducted in all material respects in the
ordinary course and (ii) there has not been:
(a) a material adverse change in the assets, liabilities,
business, results of operations, condition (financial or otherwise) or prospects
of the Representing Party and its Subsidiaries, taken as a whole, or any event,
occurrence or development which has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Representing
Party and its Subsidiaries, taken as a whole;
(b) any declaration, setting aside or payment of any dividend
or other distribution in respect of any shares of capital stock of the
Representing Party, or any repurchase, redemption or other acquisition by the
Representing Party of any Representing Party securities;
(c) any incurrence or assumption by the Representing Party of
any indebtedness for borrowed money (or any renewals, replacements, or
extensions that do not increase the aggregate commitments thereunder) except (i)
in the ordinary and usual course of business consistent with past practice or
(ii) in connection with any capital expenditure permitted by Section 4.1 or
Section 4.2, as applicable, or (iii) any guarantee, endorsement, or other
incurrence or assumption of liability (whether directly, contingently or
otherwise) by the Representing Party for the obligations of any other person;
(d) any creation or assumption by the Representing Party of any
material Lien on any material asset of the Representing Party other than
Permitted Liens;
(e) any making of any loan, advance or capital contribution to
or investment in any person by the Representing Party other than loans or
advances to employees, contractors or consultants of the Representing Party made
in the ordinary and usual course of business consistent with past practice;
(f) (i) any contract or agreement entered into by the
Representing Party on or prior to the date hereof relating to any material
acquisition or disposition of any assets or business or (ii) any modification,
amendment, assignment, termination or relinquishment by the Representing Party
of any contract, license or other right (including, any insurance policy naming
it as a beneficiary or a loss payable payee) that does or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Representing Party, other than those contemplated by this Agreement;
(g) any (i) grant of any severance or termination pay to any
director, officer, employee, consultant or contractor of the Representing Party;
(ii) entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any director,
officer, employee, consultant or contractor of the Representing Party; (iii)
increase in benefits payable under any existing severance or termination pay
policies or employment agreements; or (iv) increase in compensation, bonus or
other benefits payable to directors, officers, employees, consultants or
contractors of the Representing Party other than, in the case of clause (iv)
only, increases prior to the date hereof in compensation, bonus or other
benefits payable to employees, consultants or contractors of the Representing
Party in the ordinary and usual course of business consistent with past practice
or merit increases in salaries of employees, consultants or contractors at
regularly scheduled times in customary amounts consistent with past practices;
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(h) any adoption, entering into, amendment, alteration or
termination of (partially or completely) any Benefit Plan or Employee
Arrangement except as contemplated by this Agreement or to the extent required
by applicable Law;
(i) any (i) making or revoking of any material election
relating to Taxes (as hereinafter defined), (ii) settlement or compromise of any
material claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, or (iii) change to any
material methods of reporting income or deductions for federal income tax
purposes;
(j) any capital expenditures in excess of $100,000 individually
and in excess of $500,000 in the aggregate;
(k) any lease, license or grant to any Person of any rights in
any of the Representing Party's assets or properties;
(l) any amendment of the certificate of incorporation or bylaws
of the Representing Party;
(m) any sufferance of any material damage, destruction or loss
(whether or not covered by insurance) to any material assets of the Representing
Party; or
(n) any strike, slowdown or demand for recognition by a labor
organization by or with respect to any of the employees of the Representing
Party.
Section 3.13 Registration Statement; Joint Proxy Statement/Prospectus.
(a) The information supplied by the Representing Party for
inclusion in the registration statement on Form S-4 pursuant to which shares of
NPI Common Stock issued in the Merger will be registered with the SEC (the
"Registration Statement") shall not contain, at the time the Registration
Statement is declared effective by the SEC, any untrue statement of a material
fact or omit to state any material fact required to be stated in the
Registration Statement or necessary in order to make the statements in the
Registration Statement, in light of the circumstances under which they were
made, not misleading. The information supplied by the Representing Party for
inclusion in the joint proxy statement/prospectus (the "Joint Proxy Statement")
to be sent to the stockholders of the Company in connection with the special
meeting of the Company's stockholders to consider this Agreement and the Merger
(the "Company Stockholders Meeting") and to the stockholders of NPI in
connection with the special meeting of NPI's stockholders to consider the
issuance of NPI Common Stock in connection with the Merger (the "NPI
Stockholders Meeting") shall not, on the date the Joint Proxy Statement is first
mailed to stockholders of NPI and the Company, at the time of the Company
Stockholders Meeting, at the time of the NPI Stockholders Meeting and at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it was made, is false or misleading with respect to
any matter or omit to state any material fact necessary in order to make the
statements contained in the Joint Proxy Statement not false or misleading or
omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the NPI
Stockholders Meeting or the Company Stockholders Meeting which has become false
or misleading.
Section 3.14 Tax Matters.
(a) For purposes of this Agreement: (i) "Taxes" means any and
all federal, state, local, foreign or other taxes of any kind (together with any
and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any taxing authority, including, without
limitation, taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation or net worth, and taxes or other charges in the nature of excise,
withholding, ad valorem or value added, and (ii) "Tax Return" means any return,
report or similar statement (including the attached schedules) required to be
filed with respect to any Tax, including, without limitation, any information
return, claim for refund, amended return or declaration of estimated Tax.
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(b) All federal, state, local and foreign Tax Returns required
to be filed by or on behalf of the Representing Party, each affiliated,
combined, consolidated or unitary group of which the Representing Party is a
member (an "Affiliated Group") have been timely filed or requests for extensions
have been timely filed and any such extension has been granted and has not
expired, and all such filed Tax Returns are complete and accurate except to the
extent any failure to file or any inaccuracies in filed Tax Returns would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on the Representing Party. All Taxes due and owing by the
Representing Party or any Representing Party's Affiliated Group, including
estimates and withheld Taxes, have been paid, or adequately reserved in
accordance with GAAP, except to the extent any failure to pay or reserve for
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on the Representing Party. There is no audit or
examination in process or pending and there has been no notification of any
request for such audit or other examination and there is no deficiency, refund
litigation, proposed adjustment or matter in controversy with respect to any
Taxes due and owing by the Representing Party or any Representing Party's
Affiliated Group which if determined adversely would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Representing Party. All assessments for Taxes due and owing by the Representing
Party or any Representing Party's Affiliated Group with respect to completed and
settled examinations or concluded litigation have been paid, except to the
extent that any failures to pay would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on the Representing Party.
(c) The Representing Party has not (i) entered into a closing
agreement or other similar agreement with a taxing authority relating to Taxes
of the Representing Party or any Representing Party's Affiliated Group with
respect to a taxable period for which the statute of limitations is still open,
or (ii) with respect to U.S. federal income Taxes, granted any waiver of any
statute of limitations with respect to, or any extension of a period for the
assessment of, any income Tax, in either case, that is still outstanding. There
are no Liens relating to material Taxes upon the assets of the Representing
Party or any Representing Party's Affiliated Group other than Liens relating to
Taxes not yet due and Liens that would not, individually or in the aggregate,
have a Material Adverse Effect on the Representing Party. Neither the
Representing Party nor any Representing Party's Affiliated Group is a party to
or is bound by any Tax sharing agreement, Tax indemnity obligation or similar
agreement in respect of Taxes (other than with respect to agreements solely
between or among members of the consolidated group of which the Representing
Party is the common parent and agreements and obligations that would not,
individually or in the aggregate, have a Material Adverse Effect on the
Representing Party).
(d) Neither the Representing Party nor any Representing Party's
Affiliated Group has taken any action or knows of any fact, agreement, plan or
other circumstance that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.
(e) Section 3.14 of the Representing Party's Disclosure
Schedule lists each Tax Return of the Representing Party's or any Affiliated
Group for which an accurate copy of the actual Tax Return as filed with the
relevant taxing authority has been made available by the Representing Party to
the other on or before the date hereof.
(f) Neither the Representing Party nor any Affiliated Group has
requested or received any private letter ruling from the Internal Revenue
Service or comparable rulings from other taxing authorities.
(g) Neither the Representing Party nor any member of any
Affiliated Group has constituted either a "distributing corporation" or a
"controlled corporation" (within the meaning of Section 355(a)(1)(A) of the
Code) in a distribution of stock (to any Person or entity that is not a member
of any Affiliated Group) qualifying for tax-free treatment under Section 355 of
the Code (i) within the two-year period ending on the date hereof or (ii) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(h) Neither the Representing Party nor any member of any
Affiliated Group has any employment, severance or termination agreements, other
compensation arrangements, or Benefit Plans currently in effect which provide
for the payment of any amount (whether in cash or property or the vesting of
property) as a result of any of the transactions contemplated by this Agreement
that individually or collectively (either alone or upon the occurrence of any
additional or subsequent event), could give rise to a payment which is
nondeductible by reason of Section 280G of the Code.
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(i) Neither the Representing Party nor any member of any
Affiliated Group has filed any consent agreement under Section 341(f) of the
Code or agreed to have Section 341(f)(4) applied to any disposition of assets
owned by the Representing Party or any Affiliated Group.
(j) Neither the Representing Party nor any member of any
Affiliated Group has been at any time a United States Real Property Holding
Corporation within the meaning of Section 897(c)(2) of the Code.
Section 3.15 Absence of Questionable Payments. Neither the
Representing Party nor, to the Representing Party's knowledge, any director,
officer, agent, employee, consultant, contractor or other person acting on
behalf of the Representing Party, has used any corporate or other funds for
unlawful contributions, payments, gifts, or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others or
established or maintained any unlawful or unrecorded funds in violation of the
Foreign Corrupt Practices Act of 1977, as amended, or any other domestic or
foreign Law. Neither the Representing Party nor, to the Representing Party's
knowledge, any director, officer, agent, employee, consultant, contractor or
other person acting on behalf of the Representing Party, has accepted or
received any unlawful contributions, payments, gifts or expenditures.
Section 3.16 Title and Related Matters. The Representing Party or one
of its Subsidiaries has good and valid title to, or a valid leasehold or
contractual interest in, all of the properties and assets reflected in the
latest balance sheet included, in the case of the Company in the Financial
Statements and in the case of NPI in the SEC Reports, or acquired after the date
thereof (except for properties or assets sold or otherwise disposed of since the
date thereof), free and clear of all Liens, statutory Liens securing payments
not yet due or delinquent or the validity of which is being contested in good
faith by appropriate proceedings, and such imperfections or irregularities in
title that do not materially and adversely affect the current use of the
properties or assets subject thereto or affected thereby, affect the ability to
convey title thereto or otherwise materially impair the business operations
currently conducted at such properties. As of the date hereof, Section 3.16 of
the Representing Party's Disclosure Schedule contains a complete and correct
list of all real property owned or leased by the Representing Party or any of
its Subsidiaries, and a complete and correct list of each title insurance policy
insuring title to any of such real properties.
Section 3.17 Material Contracts.
(a) Company Contracts.
(i) Section 3.17 of the Company Disclosure sets forth
a list of all agreements the Company would be required to file as material
contracts under Item 601 of Regulation S-K were the Company subject to the
Exchange Act and the disclosure requirements of Regulation S-K (the "Company
Material Contracts"). The Company has heretofore made available to NPI true,
correct and complete copies of all Company Material Contracts. The Company is
not a party to nor bound by any severance or other agreement with any employee,
consultant or contractor pursuant to which such person would be entitled to
receive any additional compensation or an accelerated payment of compensation as
a result of the consummation of the transactions contemplated hereby.
(ii) Each of the Company Material Contracts constitutes
the valid and legally binding obligation of the Company, enforceable in
accordance with its terms, and is in full force and effect, except as may be
limited by (A) bankruptcy laws and other similar laws affecting creditors'
rights generally and (B) general principles of equity. The Company is not in
breach or default in any material respects of any provisions of any Company
Material Contract and, to the Company's knowledge, no event has occurred which
with notice or lapse of time would constitute a material breach or default by
the Company or permit termination, modification or acceleration thereunder, and
which with respect to each of the foregoing, could not be timely cured by the
Company. The Company does not have any knowledge of any termination or material
breach of anticipated termination or material breach by the other parties to any
Company Material Contract or commitment to which it is a party or to which any
of its assets are subject.
(iii) No party to any such Company Material Contract has
given notice to the Company of or made a claim against the Company in respect of
any breach or default thereunder.
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(iv) No terms and conditions of any Company Material
Contract or other arrangement or understanding between the Company and any other
Person in effect on the date of this Agreement prevent, delay or materially
restrict the Company's ability to deploy any material portion of its assets or
resources as it deems appropriate, and after the Closing shall prevent, delay or
materially restrict the Company's ability to deploy any material portion of its
assets or resources as it deems appropriate.
(b) NPI Contracts
(i) The SEC Reports contain true and accurate copies
of all of the agreements required to filed as material contracts under Item 601
of Regulation S-K under the Securities Act (the "NPI Material Contracts"). NPI
is not a party to nor bound by any severance or other agreement with any
employee, consultant or contractor pursuant to which such person would be
entitled to receive any additional compensation or an accelerated payment of
compensation as a result of the consummation of the transactions contemplated
hereby.
(ii) Each of the NPI Material Contracts constitutes the
valid and legally binding obligation of NPI, enforceable in accordance with its
terms, and is in full force and effect, except as may be limited by (A)
bankruptcy laws and other similar laws affecting creditors' rights generally and
(B) general principles of equity. NPI is not in breach or default in any
material respects of any provisions of any NPI Material Contract and, to NPI's
knowledge, no event has occurred which with notice or lapse of time would
constitute a material breach or default by NPI or permit termination,
modification or acceleration thereunder, and which with respect to each of the
foregoing, could not be timely cured by NPI. NPI does not have any knowledge of
any termination or material breach or anticipated termination or material breach
by the other parties to any NPI Material Contract or commitment to which it is a
party or to which any of its assets are subject.
(iii) No party to any such NPI Material Contract has
given notice to NPI of or made a claim against NPI in respect of any breach or
default thereunder.
(iv) No terms and conditions of any NPI Material
Contract or other arrangement or understanding between NPI and any other Person
in effect on the date of this Agreement prevent, delay or materially restrict
NPI's ability to deploy any material portion of its assets or resources as it
deems appropriate, and after the Closing shall prevent, delay or materially
restrict NPI's ability to deploy any material portion of its assets or resources
as it deems appropriate.
Section 3.18 Insurance. Section 3.18 of the Representing Party's
Disclosure Schedule sets forth a true and complete list and brief summary
description (including information on the premiums payable in connection
therewith and the scope and amount of the coverage provided thereunder) of
directors and officers liability and general liability insurance policies
maintained by the Representing Party. Such policies have been issued by insurers
which, to the Representing Party's knowledge, are reputable and financially
sound and provide coverage for the operations conducted by the Representing
Party of a scope and coverage consistent with customary industry practice.
Complete and correct copies of each such policy have been delivered by the
Company to NPI and by NPI to the Company. All such policies are in full force
and effect and no notice of cancellation has been given with respect to any such
policy. All premiums due thereon have been paid in a timely manner. There are no
pending claims or, to the knowledge of the Representing Party, threatened
claims, under any of the Representing Party's insurance policies.
Section 3.19 Subsidies. No grants, subsidies or similar arrangements
exist directly or indirectly between or among the Representing Party, on the one
hand, and any domestic or foreign Governmental Entity or any other person, on
the other hand. The Representing Party has not requested, sought, applied for or
entered into any grant, subsidy or similar arrangement directly or indirectly
from or with any domestic or foreign Governmental Entity or any other person.
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Section 3.20 Intellectual Property.
(a) For purposes of this Agreement, "Intellectual Property"
means:
(i) all issued patents, reissued or reexamined
patents, revivals of patents, utility models, certificates of invention,
registrations of patents and extensions thereof, regardless of country or formal
name (collectively, "Issued Patents");
(ii) all published or unpublished nonprovisional and
provisional patent applications, reexamination proceedings, invention
disclosures and records of invention (collectively "Patent Applications" and,
with the Issued Patents, the "Patents");
(iii) all copyrights, copyrightable works, semiconductor
topography and mask work rights, including all rights of authorship, use,
publication, reproduction, distribution, performance transformation, moral
rights and rights of ownership of copyrightable works, semiconductor topography
works and mask works, and all rights to register and obtain renewals and
extensions of registrations, together with all other interests accruing by
reason of international copyright, semiconductor topography and mask work
conventions (collectively, "Copyrights");
(iv) common law trademarks, registered trademarks,
applications for registration of trademarks, common law service marks,
registered service marks, applications for registration of service marks, trade
names, registered trade names and applications for registrations of trade names
and trade dress (collectively, "Trademarks");
(v) all technology, ideas, inventions, designs,
proprietary information, manufacturing and operating specifications, know-how,
formulae, trade secrets, technical data, computer programs, hardware, software
and processes related to the business of the Representing Party as such business
is currently conducted and as its business is proposed to be conducted;
(vi) all domain names registered by the Representing
Party; and
(vii) all other intangible intellectual property assets,
properties and rights (whether or not appropriate steps have been taken to
protect, under applicable law, such other intangible assets, properties or
rights).
(b) The Representing Party owns and has good and marketable
title to, or possesses legally enforceable rights to use, all Intellectual
Property used or currently proposed to be used in the business of the
Representing Party as currently conducted or as proposed to be conducted by the
Representing Party (the "Representing Party's Intellectual Property"), free and
clear of all liens, claims or encumbrances. The Representing Party's
Intellectual Property constitutes all of the Intellectual Property necessary to
enable the Representing Party to conduct its business as such business is
currently being conducted and as its business is proposed to be conducted. No
current or former officer, director, stockholder, employee, consultant or
independent contractor has asserted any right, claim or interest in or with
respect to any Representing Party Intellectual Property and the Representing
Party is not aware of a basis for any such claim. There is no unauthorized use,
disclosure or misappropriation of any Representing Party Intellectual Property
by any employee or, to the Representing Party's knowledge, former employee of
the Representing Party or, to the Representing Party's knowledge, by any other
third party. There are no royalties, fees or other payments payable by the
Representing Party to any third person under any written or oral contract or
understanding by reason of the ownership, use, sale or disposition of
Representing Party Intellectual Property.
(c) With respect to each item of Representing Party
Intellectual Property incorporated into any product of the Representing Party or
otherwise used in the business of the Representing Party (except "off the shelf"
or other software widely available through regular commercial distribution
channels at a cost not exceeding $10,000
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on standard terms and conditions, as modified for the Representing Party's
operations) the Representing Party Disclosure Schedule lists:
(i) all Patents and Patent Applications, Trademarks,
and Copyrights, including the jurisdictions in which each such Intellectual
Property has been issued or registered or in which any such application for such
issuance and registration has been filed; and
(ii) the following agreements relating to each of the
products of the Representing Party (the "Representing Party Products") or other
Representing Party Intellectual Property: all (A) agreements granting any right
to distribute or sublicense a Representing Party Product on any exclusive basis,
(B) any exclusive licenses of Intellectual Property to or from the Representing
Party, (C) agreements pursuant to which the amounts actually paid or payable
under firm commitments to the Representing Party are [$10,000] or more, (D)
joint development agreements, (E) any agreement by which the Representing Party
grants any ownership right to any Representing Party Intellectual Property owned
by the Representing Party, (F) any judicial, administrative, regulatory or other
governmental order relating to Intellectual Property, (G) any option relating to
any Representing Party Intellectual Property, and (H) agreements pursuant to
which any party is granted any rights to access source code or to use source
code, including without limitation any rights to create derivative works of
Representing Party Products.
(d) The Representing Party Disclosure Schedule contains an
accurate list as of the date of this Agreement of all licenses, sublicenses and
other agreements to which the Representing Party is a party and pursuant to
which the Representing Party is authorized to use any Intellectual Property
owned by any third party, excluding "off the shelf" or other software at a cost
not exceeding $10,000 and widely available through regular commercial
distribution channels on standard terms and conditions ("Third Party
Intellectual Property").
(e) To the knowledge of the Representing Party, there is no
unauthorized use, disclosure, infringement or misappropriation of any
Representing Party Intellectual Property, including any Third Party Intellectual
Property by any third party, including any employee or former employee of the
Representing Party. Other than in respect of agreements with the Representing
Party's officers and directors, the Representing Party has not entered into any
agreement to indemnify any other person against any charge of infringement of
any Intellectual Property, other than indemnification provisions contained in
standard sales or agreements to end users arising in the ordinary course of
business. There are no royalties, fees or other payments payable by the
Representing Party to any Person by reason of the ownership, use, sale or
disposition of Intellectual Property.
(f) The Representing Party is not in breach of any license,
sublicense or other agreement relating to the Representing Party Intellectual
Property or Third Party Intellectual Property Rights. Neither the execution,
delivery or performance of this Agreement or any ancillary agreement
contemplated hereby nor the consummation of the Merger or any of the
transactions contemplated by this Agreement will contravene, conflict with or
result in an infringement on the Representing Party Intellectual Property,
including any Third Party Intellectual Property.
(g) All Patents, registered Trademarks, registered service
marks and registered Copyrights held by the Representing Party are valid and
subsisting. All maintenance and annual fees have been fully paid and all fees
paid during prosecution and after issuance of any patent comprising or relating
to such item have been paid in the correct entity status amounts. The
Representing Party is not infringing, misappropriating or making unlawful use
of, or received any notice or other communication (in writing or otherwise) of
any actual, alleged, possible or potential infringement, misappropriation or
unlawful use of any proprietary asset owned or used by any third party. There is
no proceeding pending or, to the Representing Party's knowledge, threatened nor
has any claim or demand been made, which challenges the legality, validity,
enforceability or ownership of any item of the Representing Party Intellectual
Property or Third Party Intellectual Property or alleges a claim of infringement
of any Patents, Trademarks, service marks, Copyrights or violation of any trade
secret or other proprietary right of any third party. The Representing Party has
not brought a proceeding alleging infringement of the Representing Party
Intellectual Property or breach of any license or agreement involving
Intellectual Property against any third party.
(h) All current and former officers and employees of the
Representing Party have executed and delivered to the Representing Party an
agreement (containing no exceptions or exclusions from the scope of its
-21-
coverage) regarding the protection of proprietary information and the assignment
to the Representing Party of any Intellectual Property arising from services
performed for the Representing Party by such persons. All current and former
consultants and independent contractors to the Representing Party involved in
the development, modification, marketing and servicing of the Representing
Party's products, and/or the Representing Party Intellectual Property have
executed and delivered to the Representing Party an agreement (containing no
exceptions or exclusions from the scope of its coverage) regarding the
protection of proprietary information and the assignment to the Representing
Party of any Intellectual Property arising from services performed for the
Representing Party by such persons. To the Representing Party's knowledge, no
employee or independent contractor of the Representing Party is in violation of
any term of any patent disclosure agreement or employment contract or any other
contract or agreement relating to the relationship of any such employee or
independent contractor with the Representing Party.
(i) The Representing Party has taken all commercially
reasonable and customary measures and precautions necessary to protect and
maintain the confidentiality of all the Representing Party Intellectual Property
(except such Representing Party Intellectual Property whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the full
value of all Intellectual Property it owns or uses. All Intellectual Property
not otherwise protected by Patents or Copyrights ("Confidential Information")
owned by the Representing Party used by or disclosed to a third party has been
pursuant to the terms of a written agreement between the Representing Party and
such third party.
(j) No product liability claims have been communicated in
writing to or, to the Representing Party's knowledge, threatened against the
Representing Party.
(k) A complete list of each of the Representing Party Products
and the Representing Party's proprietary software ("Representing Party
Software"), together with a brief description of each, is set forth in Section
3.20 of the Representing Party's Disclosure Schedule. The Representing Party
Software and Representing Party Products conform in all material respects with
any specification, documentation, performance standard, representation or
statement provided with respect thereto by or on behalf of the Representing
Party.
(l) The Representing Party is not subject to any proceeding or
outstanding decree, order, judgment, or stipulation restricting in any manner
the use, transfer, or licensing thereof by the Representing Party, or which may
affect the validity, use or enforceability of such Representing Party
Intellectual Property. The Representing Party is not subject to any agreement
which restricts in any material respect the use, transfer, or licensing by the
Representing Party of the Representing Party Intellectual Property or
Representing Party Products.
Section 3.21 Minute Books; Stock Record Books. True and correct copies
of the Representing Party's minute books and, in the case of the Company, stock
record books have been made available to the other. The minute books of the
Representing Party contain true and complete originals or copies of all minutes
of meetings of and actions by the stockholders, Board of Directors and all
committees of the Board of Directors of the Representing Party, and accurately
reflect in all material respects all corporate actions of the Representing Party
which are required by law to be passed upon by the Board of Directors or
stockholders of the Representing Party. The stock record books accurately
reflect all transactions in shares of the Company's capital stock.
Section 3.22 Bank Accounts; Powers of Attorney. Section 3.22 of the
Representing Party's Disclosure Schedule hereto sets forth a complete and
correct list showing: (a) all banks in which the Representing Party maintains a
bank account or safe deposit box (collectively, "Bank Accounts"), together with,
as to each such Bank Account, the account number, the names of all signatories
thereof and the authorized powers of each such signatory and, with respect to
each such safe deposit box, the number thereof and the names of all persons
having access thereto; and (b) the names of all persons holding powers of
attorney from the Representing Party, true and correct copies thereof which have
been delivered to the other.
Section 3.23 Disclosure. The representations and warranties by the
Representing Party in this Agreement and the statements contained in the
schedules, certificates and other writings furnished and to be furnished by the
Representing Party to the other party pursuant to this Agreement, when
considered as a whole and giving effect to any supplements or amendments thereof
prior to the time of signing on the date hereof, do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact necessary to make the statements herein, in light of the
circumstances under which they were or shall be made, not misleading, it being
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understood that as used in this Section 3.23 "material" means material to the
Representing Party and its Subsidiaries, taken as a whole. The Representing
Party has provided to the other copies of all contracts and agreements that can
be reasonably construed as material to the business of the Representing Party.
Section 3.24 Opinion of Financial Advisors. The Board of Directors of
NPI has received the opinion of Xxxxxx Brothers Inc., dated the date of this
Agreement, substantially to the effect that, as of such date, the consideration
to be issued and delivered by NPI in the Merger is fair to NPI from a financial
point of view.
Section 3.25 NPI Share Ownership. As of the date hereof, NPI does not
own any securities of the Company.
Section 3.26 Brokers or Finders.
(a) The Company represents, as to itself, its Subsidiaries and
its affiliates, that no agent, broker, investment banker, financial advisor or
other firm or person is or will be entitled to any brokers' or finder's fee or
any other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except Credit Suisse First Boston, whose fees
and expenses will be paid by the Company in accordance with the Company's
agreement with such firm dated March 26, 2001; and the Company agrees to
indemnify and hold NPI harmless from and against any and all claims, liabilities
or obligations with respect to any other fees, commissions or expenses asserted
by any person on the basis of any act or statement alleged to have made by such
party or its affiliates.
(b) NPI represents, as to itself, its Subsidiaries and its
affiliates, that no agent, broker, investment banker, financial advisor or other
firm or person is or will be entitled to any brokers' or finder's fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except Xxxxxx Brothers, whose fees and expenses
will be paid by NPI in accordance with NPI's agreement with such firm dated
March 22, 2001; and NPI agrees to indemnify and hold the Company harmless from
and against any and all claims, liabilities or obligations with respect to any
other fees, commissions or expenses asserted by any person on the basis of any
act or statement alleged to have been made by such party or its affiliates.
Section 3.27 No Prior Activities. Except for obligations incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement and the transactions contemplated hereby, NPI
represents and warrants that Merger Sub has neither incurred any obligation or
liability nor engaged in any business or activity of any type or kind whatsoever
or entered into any agreement or arrangement with any person.
ARTICLE IV
COVENANTS RELATED TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business of the Company. Except as contemplated
by this Agreement, during the period from the date hereof to the Effective Time,
the Company will conduct its operations in the ordinary and usual course of
business consistent with past practice and, to the extent consistent therewith,
with no less diligence and effort than would be applied in the absence of this
Agreement, use commercially reasonable efforts to preserve intact its current
business organizations, keep available the service of its current officers and
employees, preserve its relationships with customers, suppliers and others
having business dealings with it and preserve the goodwill of the Company
through the Effective Time. Without limiting the generality of the foregoing,
and except as otherwise expressly provided in this Agreement or in Schedule 4.1,
prior to the Effective Time, the Company will not, without the prior written
consent of NPI:
(a) amend its certificate of incorporation or bylaws (or other
similar organizational or governing instruments), as each such document is in
effect on the date hereof;
(b) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise)
any stock of any class or any other securities convertible into or exchangeable
for any stock or any equity equivalents (including, any stock options or stock
appreciation rights), except for the issuance or sale of Shares
-23-
pursuant to outstanding Company Stock Options, and except for the issuance of
Company Stock Options to purchase up to an aggregate of 848,500 shares of
Company Common Stock to employees, consultants or directors pursuant to the
Company's Stock Option Plans and consistent with past practices;
(c) (i) split, combine or reclassify any shares of its capital
stock; (ii) declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock; (iii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase
or otherwise acquire, directly or indirectly, any of its securities;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or
issue any debt securities; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other person; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than customary
loans or advances to employees, consultants or contractors in the ordinary and
usual course of business consistent with past practice and in amounts not
material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of capital stock of the Company; or (v) mortgage or pledge any
of its material assets, tangible or intangible, or create or suffer to exist any
Lien thereupon, other than as disclosed in the schedules hereto and Permitted
Liens;
(f) (i) except as may be required by Law or as contemplated by
this Agreement, enter into, adopt or amend or terminate (partially or
completely) any Benefit Plan, Employee Arrangement (including, the repricing of
any stock options or the acceleration or vesting of any stock options), stock
appreciation right, restricted stock, performance unit, stock equivalent or
stock purchase agreement for the benefit or welfare of any director, officer,
employee, consultant or contractor in any manner, (ii) except as required under
existing agreements, increase in any manner the compensation or fringe benefits
of any director, officer, employee, consultant or contractor or pay any benefit
not required by any plan and arrangement as in effect as of the date hereof
(including, the granting of stock appreciation rights or performance units) or
grant any completion bonuses or change of control payments in respect of the
Merger or that will be affected thereby; or (iii) hire, promote or change the
classification or status in respect of any employee or individual; provided,
however, that NPI shall not unreasonably withhold or delay any consent sought to
hire, promote or change the classification or status of any employee or
individual.
(g) acquire, sell, lease or dispose of any assets outside the
ordinary and usual course of business consistent with past practice or any
assets which in the aggregate are material to the Company, enter into any
commitment or transaction outside the ordinary and usual course of business
consistent with past practice or grant any exclusive distribution rights;
(h) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein;
(i) settle or compromise any pending or threatened suit, action
or claim relating to the transactions contemplated hereby;
(j) take any action (including, any action otherwise permitted
by this Section 4.1) that would prevent or impede the Merger from qualifying as
a "reorganization" under Section 368(a) of the Code;
(k) fail to comply in any material respect with any Law
applicable to the Company or its assets which would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on the Company;
(l) effect a "mass layoff" or "plant closing" as defined in
WARN;
-24-
(m) dispose of or permit to lapse any rights to the use of any
patent, trademark, trade name, copyright or other intangible asset that is
material to the Company, or dispose of or disclose to any Person any trade
secret, formula, process or know-how not theretofore a matter of public
knowledge unless, in respect of disclosure, such Person has executed a
confidentiality agreement in form acceptable to the Company;
(n) sell or dispose of any Company Intellectual Property;
(o) change any of the banking or safe deposit arrangements
described in Section 3.23 hereto, except in the ordinary course of business;
(p) fail to maintain its books, accounts and records in the
usual, regular and ordinary manner on a basis consistent with prior years; or
(q) take, propose to take, or agree in writing or otherwise to
take, any of the actions described in Section 4.1(a) through Section 4.1(p) or
any action which would make any of the representations or warranties of the
Company contained in this Agreement untrue, incomplete or incorrect.
Section 4.2 Conduct of Business of NPI. Except as contemplated by this
Agreement, during the period from the date hereof to the Effective Time, NPI
will conduct its operations in the ordinary and usual course of business
consistent with past practice and, to the extent consistent therewith, with no
less diligence and effort than would be applied in the absence of this
Agreement, use commercially reasonable efforts to preserve intact its current
business organizations, keep available the service of its current officers and
employees, preserve its relationships with customers, suppliers and others
having business dealings with it and preserve the goodwill of NPI through the
Effective Time. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement or in Schedule 4.2, prior to the
Effective Time, NPI will not, without the prior written consent of Company:
(a) amend its certificate of incorporation or bylaws (or other
similar organizational or governing instruments), as each such document is in
effect on the date hereof;
(b) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or otherwise)
any stock of any class or any other securities convertible into or exchangeable
for any stock or any equity equivalents (including, any stock options or stock
appreciation rights), except for the issuance or sale of NPI Common Stock
pursuant to outstanding NPI Stock Options, and except for the issuance of NPI
Stock Options to purchase up to an aggregate of 1,959,794 shares of NPI Common
Stock to employees, consultants and directors pursuant to NPI's Stock Option
Plans and consistent with past practices;
(c) (i) split, combine or reclassify any shares of its capital
stock; (ii) declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock; (iii) make any other actual, constructive or deemed
distribution in respect of any shares of its capital stock or otherwise make any
payments to stockholders in their capacity as such; or (iv) redeem, repurchase
or otherwise acquire, directly or indirectly, any of its securities;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of NPI (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or
issue any debt securities; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any other person; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than customary
loans or advances to employees, consultants or contractors in the ordinary and
usual course of business consistent with past practice and in amounts not
material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of capital stock of NPI; or (v) mortgage or pledge any of its
material assets, tangible or intangible, or create or suffer to exist any Lien
thereupon, other than as disclosed in the schedules hereto and Permitted Liens;
-25-
(f) (i) except as may be required by Law or as contemplated by
this Agreement, enter into, adopt or amend or terminate (partially or
completely) any Benefit Plan, Employee Arrangement (including, the repricing of
any stock options or the acceleration or vesting of any stock options), stock
appreciation right, restricted stock, performance unit, stock equivalent or
stock purchase agreement for the benefit or welfare of any director, officer,
employee, consultant or contractor in any manner, (ii) except as required under
existing agreements, increase in any manner the compensation or fringe benefits
of any director, officer, employee, consultant or contractor or pay any benefit
not required by any plan and arrangement as in effect as of the date hereof
(including, the granting of stock appreciation rights or performance units) or
grant any completion bonuses or change of control payments in respect of the
Merger or that will be affected thereby; or (iii) hire, promote or change the
classification or status in respect of any employee or individual; provided,
however, that the Company shall not unreasonably withhold or delay any consent
sought to hire, promote or change the classification or status of any employee
or individual.
(g) acquire, sell, lease or dispose of any assets outside the
ordinary and usual course of business consistent with past practice or any
assets which in the aggregate are material to NPI, enter into any commitment or
transaction outside the ordinary and usual course of business consistent with
past practice or grant any exclusive distribution rights;
(h) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein;
(i) settle or compromise any pending or threatened suit, action
or claim relating to the transactions contemplated hereby;
(j) take any action (including, any action otherwise permitted
by this Section 4.2) that would prevent or impede the Merger from qualifying as
a "reorganization" under Section 368(a) of the Code;
(k) fail to comply in any material respect with any Law
applicable to NPI or its assets which would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on NPI;
(l) effect a "mass layoff" or "plant closing" as defined in
WARN;
(m) dispose of or permit to lapse any rights to the use of any
patent, trademark, trade name, copyright or other intangible asset that is
material to NPI, or dispose of or disclose to any Person any trade secret,
formula, process or know-how not theretofore a matter of public knowledge
unless, in respect of such disclosure, such Person has executed a
confidentiality agreement in form acceptable to NPI;
(n) sell or dispose of any NPI Intellectual Property;
(o) change any of the banking or safe deposit arrangements
described in Section 3.23 hereto, except in the ordinary course of business;
(p) fail to maintain its books, accounts and records in the
usual, regular and ordinary manner on a basis consistent with prior years; or
(q) take, propose to take, or agree in writing or otherwise to
take, any of the actions described in Section 4.2(a) through Section 4.2(p) or
any action which would make any of the representations or warranties of NPI
contained in this Agreement untrue, incomplete or incorrect.
Section 4.3 Access to Information.
(a) Between the date hereof and the Effective Time, the
Company, NPI and Merger Sub will each give the authorized representatives
(including, counsel, financial advisors and auditors) of the other reasonable
access to all its employees, consultants, contractors, plants, offices,
warehouses and other facilities and to all its books and records, will permit
the other to make such inspections and investigations as each may require,
including, without limitation, the sampling of surface water, groundwater, soil,
indoor and outdoor air quality and building
-26-
materials. Each of the Company, NPI and Merger Sub will cause its officers to
furnish the other with such financial and operating data and other information
in respect of its business, properties and personnel as each may from time to
time reasonably request, provided that no investigation pursuant to this Section
4.3(a) shall affect or be deemed to modify any of the representations or
warranties made by each of the Company, NPI and Merger Sub.
(b) Between the date hereof and the Effective Time, the
Company, NPI and Merger Sub shall each furnish to the other (i) within five
business days after the delivery thereof to management, such monthly financial
statements and data as are regularly prepared for distribution to Company
management, NPI management and Merger Sub management respectively, and (ii) at
the earliest time they are available, such quarterly and annual financial
statements as are regularly prepared for the Company Board of Directors, NPI
Board of Directors and Merger Sub Board of Directors, respectively.
(c) Each of NPI, Merger Sub and the Company will hold and will
cause its authorized representatives to hold in confidence all documents and
information concerning the other furnished in connection with the transactions
contemplated by this Agreement.
Section 4.4 Continuation of Insurance Coverage. From the date hereof
to the Closing, each of the Company and NPI shall keep in full force and effect
insurance coverage for its assets and operations comparable in amount and scope
to the coverage now maintained covering its assets and operations.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Joint Proxy Statement; Registration Statement.
(a) As promptly as practicable after the date of this
Agreement, NPI and the Company shall prepare and cause to be filed with the SEC
the Joint Proxy Statement and NPI shall prepare and cause to be filed with the
SEC the Registration Statement, in which the Joint Proxy Statement will be
included as a prospectus, with respect to the issuance of NPI Common Stock in
the Merger. Each of NPI and the Company shall furnish all information concerning
it and the holders of its capital stock as the other may reasonably request in
connection with the preparation of the Registration Statement and Joint Proxy
Statement. Each of NPI and the Company shall use all reasonable efforts to cause
the Registration Statement and the Joint Proxy Statement to comply with the
rules and regulations promulgated by the SEC, to respond promptly to any
comments of the SEC or its staff and to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after it is filed
with the SEC. NPI will cause the Joint Proxy Statement to be mailed to NPI's
stockholders, and the Company will cause the Joint Proxy Statement to be mailed
to the Company's stockholders, as promptly as practicable after the Registration
Statement is declared effective under the Securities Act. Each of NPI and the
Company shall also promptly file, use all reasonable efforts to cause to become
effective as promptly as possible and, if required, mail to its stockholders any
amendment to the Registration Statement or Joint Proxy Statement that becomes
necessary after the date the Registration Statement is declared effective.
(b) If at any time prior to the Effective Time any event or
circumstance relating to NPI, any NPI Subsidiary or their respective directors
or officers is discovered by NPI which is required to be set forth in an
amendment or supplement to the Registration Statement or Joint Proxy Statement,
NPI shall promptly inform the Company. All documents that NPI is responsible for
filing with the SEC in connection with the transactions contemplated hereby will
comply as to form and substance in all material respects with the applicable
requirements of the Securities Act and the Exchange Act.
(c) If at any time prior to the Effective Time any event or
circumstance relating to the Company, any Company Subsidiary or their respective
directors or officers is discovered by the Company which is required to be set
forth in an amendment or supplement to the Registration Statement or Joint Proxy
Statement, the Company shall promptly inform NPI. All documents that the Company
is responsible for filing with the SEC in connection with the transaction
contemplated herein will comply as to form and substance in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act.
-27-
(d) Each of NPI and the Company will advise the other, promptly
after it receives notice thereof, of the time when the Registration Statement
has become effective or any supplement or amendment thereto has been filed, the
issuance of any stop order, or any request by the SEC for amendment of the Joint
Proxy Statement or Registration Statement or comments thereon or responses
thereto.
(e) Prior to the Effective Time, NPI shall use reasonable
efforts to obtain all regulatory approvals needed to ensure that the NPI Common
Stock to be issued in the Merger will be registered or qualified under the
securities law of every jurisdiction of the United States in which any
registered holder of Company Common Stock has an address of record on the record
date for determining the stockholders entitled to notice of and to vote at the
Company Stockholders' Meeting; provided, however, that NPI shall not be required
(i) to qualify to do business as a foreign corporation in any jurisdiction in
which it is not now qualified or (ii) to file a general consent to service of
process in any jurisdiction.
Section 5.2 Company Stockholders' Meeting.
(a) The Company shall take all action necessary under all
applicable Laws to call, give notice of and hold the Company Stockholders'
Meeting. The Company Stockholders' Meeting shall be held (on a date selected by
the Company in consultation with NPI) as promptly as practicable after the
Registration Statement is declared effective under the Securities Act. The
Company shall ensure that all proxies solicited in connection with the Company
Stockholders' Meeting are solicited in compliance with all applicable Laws.
(b) Subject to Section 5.2(c): (i) the Joint Proxy Statement
shall include a statement to the effect that the board of directors of the
Company recommends that the Company's stockholders vote to adopt this Agreement
at the Company Stockholders' Meeting (the recommendation of the Company's board
of directors that the Company's stockholders vote to adopt this Agreement being
referred to as the "Company Board Recommendation"); and (ii) the Company Board
Recommendation shall not be withdrawn or modified in a manner adverse to NPI,
and no resolution by the board of directors of the Company or any committee
thereof to withdraw or modify the Company Board Recommendation in a manner
adverse to NPI shall be adopted or proposed.
(c) Notwithstanding anything to the contrary contained in
Section 5.2(b), at any time prior to the adoption of this Agreement by the
Company Stockholder Approval, the Company Board Recommendation may be withdrawn
or modified in a manner adverse to NPI if the Company board of directors shall
have determined in accordance with Section 5.5(a)(ii) that the withdrawal or
modification of such recommendation is necessary.
Section 5.3 NPI Stockholders' Meeting.
(a) NPI shall take all action necessary under all applicable
Laws to call, give notice of and hold the NPI Stockholders' Meeting. The NPI
Stockholders' Meeting will be held on the same date as the Company Stockholders'
Meeting is held. NPI shall ensure that all proxies solicited in connection with
the NPI Stockholders' Meeting are solicited in compliance with all applicable
Laws.
(b) Subject to Section 5.3(c), the Joint Proxy Statement shall
include a statement to the effect that the board of directors of NPI recommends
that NPI's stockholders vote to approve the issuance of NPI Common Stock in the
Merger (the recommendation of NPI's board of directors that NPI's stockholders
vote to approve the issuance of NPI Common Stock in the Merger being referred to
as the "NPI Board Recommendation"). The NPI Board Recommendation shall not be
withdrawn or modified in a manner adverse to the Company, and no resolution by
the board of directors of NPI or any committee thereof to withdraw or modify the
NPI Board Recommendation in a manner adverse to the Company shall be adopted or
proposed.
(c) Notwithstanding anything to the contrary contained in
Section 5.3(b), at any time prior to the adoption of this Agreement by the NPI
Stockholder Approval, the NPI Board Recommendation may be withdrawn or modified
in a manner adverse to the Company if the NPI board of directors shall have
determined in accordance with Section 5.5(b)(ii), that the withdrawal or
modification of such recommendation is necessary.
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Section 5.4 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each
party will use commercially reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to consummate the Merger and the other
transactions contemplated by this Agreement. Neither the Company, NPI nor Merger
Sub will take, agree to take or knowingly permit to be taken any action or do or
knowingly permit to be done anything in the conduct of the business of the
companies, or otherwise, which would be contrary to or in breach of any of the
terms or provisions of this Agreement.
(b) In furtherance and not in limitation of the covenants of
the parties contained in Section 5.2 and Section 5.3, each of NPI, Merger Sub
and the Company shall use commercially reasonable efforts to resolve such
objections if any, as may be asserted by a Governmental Entity or other person
in respect of the transactions contemplated hereby, including, without
limitation, under any antitrust or other Law, or by any Dissenting Stockholder
in respect of Dissenting Shares. In connection with the foregoing, if any
administrative or judicial action or proceeding, including any proceeding by a
private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement, each of NPI, Merger Sub and the
Company shall cooperate in all respects with each other and use its respective
commercially reasonable efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction, or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this Section
5.4(b) shall (i) limit a party's right to terminate this Agreement pursuant to
Section 7.2 so long as such party has up to then complied in all material
respects with its obligations under this Section 5.4(b), or (ii) require NPI to
dispose or hold separate any part of its or the Company's business or operations
(or a combination of NPI's and the Company's business or operations), or comply
with any other material restriction affecting its business or operations.
(c) The Company and NPI agree that in connection with any
litigation which may be brought against the Company or its directors or NPI or
its directors relating to the transactions contemplated hereby, the party
subject to such litigation will keep the other, and any counsel which the other
may retain at its own expense, informed of the course of such litigation, to the
extent the other is not also a party thereto. The parties agree that they will
consult with each other prior to entering into any settlement or compromise of
any such litigation, and that no such settlement or compromise will be entered
into by either party without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
Section 5.5 Acquisition Proposals.
(a) Restrictions on the Company.
(i) The Company and its Subsidiaries will not, nor will
they authorize or permit any officer, director, employee, consultant or
contractor of or any investment banker, attorney, accountant or other advisor or
representative of, the Company or its Subsidiaries to, directly or indirectly,
(A) solicit, initiate or encourage the submission of any Company Acquisition
Proposal (as hereinafter defined) or (B) participate in any discussions or
negotiations regarding, or furnish to any person any information in respect of,
or take any other action to facilitate, any Company Acquisition Proposal or any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Company Acquisition Proposal. Notwithstanding the
foregoing, in the event that the Company receives an unsolicited Company
Acquisition Proposal, prior to the adoption of this Agreement by the Company
Stockholder Approval, this Section 5.5(a) shall not prohibit the Company from
furnishing nonpublic information regarding the Company to, or entering into
discussions with, any Person in response to a bona fide Company Acquisition
Proposal that can reasonably be expected to lead to a Superior Proposal that is
submitted to the Company by such Person (and not withdrawn) if (1) neither the
Company, its Subsidiaries nor any representative of any of the Company or its
Subsidiaries shall have violated any of the restrictions set forth in this
Section 5.5(a), (2) the board of directors of the Company concludes in good
faith, after having taken into account the advice of its outside legal counsel,
that failure to take such action would be inconsistent with fiduciary duties of
the board of directors of the Company to the Company's stockholders, (3) at
least two business days prior to furnishing any such nonpublic information to,
or entering into discussions with, such
-29-
Person, the Company gives NPI written notice of the identity of such Person and
of the Company's intention to furnish nonpublic information to, or enter into
discussions with, such Person, and the Company receives from such Person an
executed confidentiality agreement containing customary limitations on the use
and disclosure of all nonpublic written and oral information furnished to such
Person by or on behalf of the Company, and (4) at least two business days prior
to furnishing any such nonpublic information to such Person, the Company
furnishes such nonpublic information to NPI (to the extent such nonpublic
information has not been previously furnished by the Company to NPI).
Immediately after the execution and delivery of this Agreement, the Company and
its Subsidiaries will, and will use their commercially reasonable efforts to
cause their affiliates, and their respective officers, directors, employees,
consultants, contractors, investment bankers, attorneys, accountants and other
agents and representatives to, cease and terminate any existing activities,
discussions or negotiations with any parties conducted heretofore in respect of
any possible Company Acquisition Proposal and shall immediately inform NPI of
the receipt by the Company of any subsequent Company Acquisition Proposal. The
Company and its Subsidiaries shall take all necessary steps to promptly inform
the individuals or entities referred to in the first sentence of this Section
5.5(a) of the obligations undertaken in this Section 5.5(a). "Company
Acquisition Proposal" means an inquiry, offer or proposal regarding any of the
following (other than the transactions contemplated by this Agreement) involving
the Company: (v) any merger, consolidation, share exchange, recapitalization,
business combination or other similar transaction; (w) any sale of shares of
capital stock of the Company after which stockholders of the Company immediately
prior to such sale would hold less than a majority of the issued and outstanding
capital stock of the Company, (x) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of all or substantially all the assets of the
Company in a single transaction or series of related transactions; (y) any
tender offer or exchange offer for 20% or more of the outstanding Shares or the
filing of a registration statement under the Securities Act in connection
therewith; or (z) any public announcement of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the foregoing.
"Company Superior Proposal" shall mean an unsolicited, bona fide written offer
made by a third party to purchase all of outstanding Company Common Stock on
terms that the board of directors of the Company determines, in its reasonable
judgment, to be more favorable to the Company and its stockholders (taking into
account, among other things, all legal, financial, regulatory and other aspects
of the proposal and identity of the offeror) as compared to the transactions
contemplated hereby and which is reasonably capable of being consummated;
provided, however, that any such offer shall not be deemed to be a Company
Superior Proposal if any financing required to consummate the transaction
contemplated by such offer is not committed and is not reasonably capable of
being obtained by such third party.
(ii) The Company board of directors will not withdraw
or modify, or propose to withdraw or modify, in a manner adverse to NPI, its
approval or recommendation of this Agreement or the Merger unless the Company
board of directors, after consultation with independent legal counsel,
determines in good faith that such action is necessary to avoid a breach by the
Company board of directors of its fiduciary duties to the Company's
stockholders. Nothing contained in this Section 5.5(a) shall prohibit the
Company from making any disclosure to the Company's stockholders which, in the
good faith reasonable judgment of the Company board of directors, after
consultation with independent legal counsel, is required under applicable Law;
provided, that except as otherwise permitted in this Section 5.5(a), the Company
may not withdraw or modify, or propose to withdraw or modify, its position with
respect to the Merger or approve or recommend, or propose to approve or
recommend, a Company Acquisition Proposal. Nothing in this Section 5.5(a) shall
(A) permit the Company to terminate this Agreement or (B) affect any other
obligations of the Company under this Agreement.
(b) Restrictions on NPI
(i) NPI and its Subsidiaries will not, nor will they
authorize or permit any officer, director, employee, consultant or contractor of
or any investment banker, attorney, accountant or other advisor or
representative of, NPI or its Subsidiaries to, directly or indirectly, (A)
solicit, initiate or encourage the submission of any NPI Acquisition Proposal
(as hereinafter defined) or (B) participate in any discussions or negotiations
regarding, or furnish to any person any information in respect of, or take any
other action to facilitate, any NPI Acquisition Proposal or any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any NPI Acquisition Proposal. Notwithstanding the foregoing, in the event
that NPI receives an unsolicited NPI Acquisition Proposal, prior to the adoption
of this Agreement by the NPI Stockholder Approval, this Section 5.5(b) shall not
prohibit NPI from furnishing nonpublic information regarding NPI to, or entering
into discussions with,
-30-
any Person in response to a bona fide NPI Acquisition Proposal that can
reasonably be expected to lead to a Superior Proposal that is submitted to NPI
by such Person (and not withdrawn) if (1) neither NPI, its Subsidiaries, nor any
representative of NPI or its Subsidiaries shall have violated any of the
restrictions set forth in this Section 5.5(b), (2) the board of directors of the
NPI concludes in good faith, after having taken into account the advice of its
outside legal counsel, that failure to take such action would be inconsistent
with fiduciary duties of the board of directors of NPI to the Company's
stockholders, (3) at least two business days prior to furnishing any such
nonpublic information to, or entering into discussions with, such Person, NPI
gives the Company written notice of the identity of such Person and of NPI's
intention to furnish nonpublic information to, or enter into discussions with,
such Person, and NPI receives from such Person an executed confidentiality
agreement containing customary limitations on the use and disclosure of all
nonpublic written and oral information furnished to such Person by or on behalf
of NPI, and (4) at least two business days prior to furnishing any such
nonpublic information to such Person, NPI furnishes such nonpublic information
to the Company (to the extent such nonpublic information has not been previously
furnished by NPI to the Company). Immediately after the execution and delivery
of this Agreement, NPI and its Subsidiaries will, and will use their
commercially reasonable efforts to cause their affiliates, and their respective
officers, directors, employees, consultants, contractors, investment bankers,
attorneys, accountants and other agents and representatives to, cease and
terminate any existing activities, discussions or negotiations with any parties
conducted heretofore in respect of any possible NPI Acquisition Proposal and
shall immediately inform the Company of the receipt by NPI of any subsequent NPI
Acquisition Proposal. NPI and its Subsidiaries shall take all necessary steps to
promptly inform the individuals or entities referred to in the first sentence of
this Section 5.5(b) of the obligations undertaken in this Section 5.5(b). "NPI
Acquisition Proposal" means an inquiry, offer or proposal regarding any of the
following (other than the transactions contemplated by this Agreement) involving
NPI: (v) any merger, consolidation, share exchange, recapitalization, business
combination or other similar transaction; (w) any sale of shares of capital
stock of NPI after which stockholders of NPI immediately prior to such sale
would hold less than a majority of the outstanding capital stock of NPI, (x) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of all or
substantially all the assets of NPI in a single transaction or series of related
transactions, other than assets of NPI related directly to NPI's Ethernet
switching business, (y) any tender offer or exchange offer for 20% or more of
the outstanding NPI Common Stock or the filing of a registration statement under
the Securities Act in connection therewith, or (z) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing. "NPI Superior Proposal" shall mean an
unsolicited, bona fide written offer made by a third party to purchase all of
outstanding NPI Common Stock on terms that the board of directors of NPI
determines, in its reasonable judgment, to be more favorable to the NPI and its
stockholders (taking into account, among other things, all legal, financial,
regulatory and other aspects of the proposal and identity of the offeror) as
compared to the transactions contemplated hereby and which reasonably capable of
being consummated; provided, however, that any such offer shall not be deemed to
be a NPI Superior Proposal if any financing required to consummate the
transaction contemplated by such offer is not committed and is not reasonably
capable of being obtained by such third party.
(ii) The NPI board of directors will not withdraw or
modify, or propose to withdraw or modify, in a manner adverse to the Company,
its approval or recommendation of this Agreement or the Merger unless the NPI
board of directors, after consultation with independent legal counsel,
determines in good faith that such action is necessary to avoid a breach by the
NPI board of directors of its fiduciary duties to the NPI stockholders under
applicable Law. Nothing contained in this Section 5.5(b) shall prohibit NPI from
making any disclosure to the NPI stockholders which, in the good faith
reasonable judgment of the NPI board of directors, after consultation with
independent legal counsel, is required under applicable Law; provided, that
except as otherwise permitted in this Section 5.5(b), NPI may not withdraw or
modify, or propose to withdraw or modify, its position with respect to the
Merger or approve or recommend, or propose to approve or recommend, an NPI
Acquisition Proposal. Nothing in this Section 5.5(b) shall (A) permit NPI to
terminate this Agreement or (B) affect any other obligations of NPI under this
Agreement.
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Section 5.6 Public Announcements. Each of NPI, Merger Sub and the
Company will consult with one another before issuing any press release or
otherwise making any public statements in respect of the transactions
contemplated by this Agreement, including, the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by applicable Law or by obligations pursuant to any
listing agreement with Nasdaq, as determined by NPI, Merger Sub or the Company,
as the case may be, a copy of which shall be sent simultaneously to the other
party upon such release.
Section 5.7 Indemnification.
(a) The Company shall, and from and after the Effective Time,
the Surviving Corporation and NPI shall, indemnify, defend and hold harmless the
present and former directors and officers of the Company (the "Indemnified
Parties") against all losses, claims, damages, costs, expenses (including
reasonable attorneys' fees and expenses), liabilities or judgments or amounts
that are paid in settlement with the approval of the indemnifying party of or in
connection with any threatened or actual claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
or pertaining to the fact that such person is or was a director or officer of
the Company whether pertaining to any matter existing at or prior to the
Effective Time and whether asserted or claimed prior to, at or after the
Effective Time ("Indemnified Liabilities"), including all Indemnified
Liabilities based in whole or in part on, or arising in whole or in part out of,
or pertaining to this Agreement or the transactions contemplated hereby, in each
case to the fullest extent the Company is permitted under the Company's
certificate of incorporation and/or bylaws in effect immediately prior to the
Merger and under Delaware Law as the same exists or may hereafter be amended
(but, in the case of any amendment, only to the extent that such amendment
permits broader rights than such law permitted prior to such amendment and only
to the extent such amendment is not retroactively applicable) to indemnify its
own directors or officers, as the case may be. Without limiting the foregoing,
in the event any such claim, action, suit, proceeding or investigation is
brought against any Indemnified Parties (whether arising before or after the
Effective Time), (a) the Indemnified Parties may retain counsel satisfactory to
them and the Company or, from and after the Effective Time, the Surviving
Corporation, and the Surviving Corporation or NPI, as applicable, shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received and otherwise advance to such
Indemnified Party upon request reimbursement of reasonable documented expenses
incurred, in either case to the fullest extent and in the manner permitted by
Delaware Law; and (b) the Company or the Surviving Corporation, as applicable,
will use all reasonable efforts to assist in the vigorous defense of any such
matter, provided that neither the Company, NPI nor the Surviving Corporation
shall be liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld). Any Indemnified Party
wishing to claim indemnification under this Section 5.7, upon learning of any
such claim, action, suit, proceeding or investigation, shall promptly notify the
Company (or after the Effective Time, the Surviving Corporation) (but the
failure so to notify shall not relieve a party from any liability which it may
have under this Section 5.7 except to the extent such failure materially
prejudices such party), and shall to the extent required by the Company's
certificate of incorporation and/or bylaws in effect immediately prior to the
Merger and Delaware Law deliver to the Company (or after the Effective Time, the
Surviving Corporation) the undertaking contemplated by the Company's certificate
of incorporation and/or bylaws in effect immediately prior to the Merger and
Delaware Law. The Indemnified Parties as a group may retain only one law firm to
represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties.
(b) NPI, Merger Sub and the Company agree that all rights to
indemnification and all limitations of liability existing in favor of the
Indemnified Party as provided in the Company's certificate of incorporation and
bylaws as in effect as of the date hereof shall survive the Merger and shall
continue in full force and effect, without any amendment thereto, for a period
of six years from the Effective Time to the extent such rights are consistent
with Delaware Law; provided, that in the event any claim or claims are asserted
or made within such six-year period all rights to indemnification in respect of
any such claim or claims shall continue until disposition of any and all such
claims; provided further, that any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under Delaware Law, the Company's certificate of incorporation or
bylaws or such agreements, as the case may be, shall be made by independent
legal counsel selected by the Indemnified Party and reasonably acceptable to
NPI; and provided further, that nothing in this Section 5.7 shall impair any
rights or obligations of any present or former directors or officers of the
Company.
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(c) In the event NPI or the Surviving Corporation or any of
their successors or assigns (i) consolidates with or mergers into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case, to
the extent necessary to effectuate the purposes of this Section 5.7, proper
provision shall be made so that the successors and assigns of NPI and the
Surviving Corporation assume the obligations set forth in this Section 5.7 and
none of the actions described in clauses (i) or (ii) shall be taken until such
provision is made.
(d) NPI or the Surviving Corporation shall maintain directors'
and officers' liability insurance ("D&O Insurance") for a period of not less
than six years after the Effective Date; provided, that (i) the Surviving
Corporation may substitute therefor policies of substantially similar coverage
and amounts containing terms no less advantageous to such former directors or
officers and (ii) if the existing D&O Insurance expires or is canceled during
such period, NPI or the Surviving Corporation will use its commercially
reasonable efforts to obtain substantially similar D&O Insurance, (iii) in no
event shall NPI or the Surviving Corporation be required to expend an amount per
year in excess of 150% of current annual premiums paid by NPI to maintain or
procure D&O insurance pursuant hereto; and (iv) if the annual premiums of such
D&O Insurance would exceed 150% of current annual premiums, NPI or the Surviving
Corporation shall obtain a policy with the greatest coverage available for a
cost not exceeding 150% of current annual premiums.
Section 5.8 Notification of Certain Matters. The Company shall give
prompt notice to NPI and Merger Sub, and NPI and Merger Sub shall give prompt
notice to the Company, of (a) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time, (b) any material failure of
the Company, NPI or Merger Sub, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder, (c) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement, or (d) any facts or
circumstances that could reasonably be expected to result in a Material Adverse
Effect; provided, however, that the delivery of any notice pursuant to this
Section 5.8 shall not cure such breach or non-compliance or limit or otherwise
affect the rights, obligations or remedies available hereunder to the party
receiving such notice.
Section 5.9 Employee Matters, Management Agreements.
(a) NPI will cause the Surviving Corporation to honor the
obligations of the Company under the provisions of all Benefit Plans and
Employee Arrangements set forth in the Company's Disclosure Schedule, subject to
NPI's right to amend or terminate any such Benefit Plan or Employee Arrangement
in accordance with its terms. After the Effective Time, the employees of the
Company will be eligible to participate in the Company's Benefit Plans or, if so
determined by NPI, NPI's applicable Benefit Plans, as such plans may be in
effect from time to time, and, at NPI's sole discretion, will become employees
of NPI. With respect to each such employee of the Company, service with the
Company may be counted for purposes of determining periods of eligibility to
participate or to vest in benefits under any applicable Benefit Plan of NPI. At
NPI's sole discretion, administrative functions, including but not limited to
payroll processing, may be transferred to processors of NPI's choosing.
(b) The Company, NPI and Merger Sub agree that the Merger shall
constitute a change in control with respect to the Management Agreements and any
payments or benefits due to parties under the Management Agreements resulting
therefrom shall be paid promptly to each payee after the expiration of such
payee's NPI Lockup Agreement.
(c) At the Closing, NPI may cause the Surviving Corporation to
deposit with an escrow agent reasonably acceptable to all parties hereto and
pursuant to the terms of a mutually acceptable escrow agreement, an amount
sufficient to pay any amount due pursuant to retention agreements disclosed in
the NPI Disclosure Schedule.
Section 5.10 Affiliate Agreements. Section 5.10 of the Company
Disclosure Schedule sets forth a list of all persons who are, and all persons
who to the Company's knowledge will be at the Closing Date, "affiliates" of the
Company for purposes of Rule 145 under the Securities Act. The Company will
cause such list to be updated
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promptly through the Closing Date. No later than 15 days after the date of this
Agreement (but in any event prior to the Effective Time), the Company shall
cause its "affiliates" to deliver to NPI an Affiliate Agreement.
Section 5.11 Lock-up Agreements.
(a) Section 5.11 of the Company Disclosure Schedule sets forth
a list of all the Company's officers, directors and stockholders. Prior to the
Effective Time, the Company shall cause all officers and directors of the
Company to deliver to NPI a Company Lock-up Agreement.
(b) Section 5.11 of the NPI Disclosure Schedule sets forth a
list of all NPI's officers, directors, stockholders affiliated with NPI's
officers and directors, and NPI employees who hold more than 30,000 shares of
NPI Common Stock. Prior to the Effective Time, NPI shall cause all such
individuals or entities to deliver to NPI an NPI Lock-up Agreement.
Section 5.12 Listing of Stock. NPI shall use its commercially
reasonable efforts to cause the shares of NPI Common Stock to be issued in
connection with the Merger to be approved for listing on Nasdaq on or prior to
the Closing Date, subject to official notice of issuance.
Section 5.13 Antitakeover Statutes. If any antitakeover statute is or
may become applicable to the Merger, each of NPI and the Company shall take such
actions as are necessary so that the transactions contemplated by this Agreement
may be consummated as promptly as practicable on the terms contemplated hereby
and otherwise act to eliminate or minimize the effects of any antitakeover
statute on the Merger.
Section 5.14 Third Party Consents.
(a) Each of NPI, Merger Sub and the Company shall use its
commercially reasonable efforts to obtain at the earliest practicable date all
consents of third parties (including, but not limited to, such as are listed on
Section 3.3 of the Company Disclosure Schedule or NPI Disclosure Schedule, as
applicable) and Governmental Entities necessary to the consummation of the
transactions contemplated hereby (the "Third Party Consents") and will provide
to the other parties hereto copies of each such Third Party Consent promptly
after it is obtained. Each of NPI, Merger Sub and the Company agrees to
cooperate fully with the other parties hereto in connection with the obtaining
of the Third Party Consents; provided, however, that no party shall be required
to pay any additional sums to secure such Third Party Consents of the other
parties hereto.
(b) The Company and NPI shall take all reasonable actions
necessary to file as soon as practicable notifications under the HSR Act and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and to respond as soon as practicable to
all inquiries and requests received from any Governmental Entity in connection
with antitrust matters. Notwithstanding anything to the contrary herein
(including the other provisions of this Section 5.14), NPI and its Subsidiaries
shall not be required to divest, or agree to any restrictions with respect to,
any of its businesses or assets or the businesses or assets to be acquired in
connection with the transactions contemplated hereby. Nothing herein shall
prevent NPI, on not more than one occasion, from withdrawing a notification
under the HSR Act if NPI intends to refile such notification thereafter in
accordance with the terms hereof.
(c) In furtherance and not in limitation of the covenants of
the parties contained in Section 5.14(a) and Section 5.14(b), if any
administrative or judicial action or proceeding, including any proceeding by a
private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement, each of NPI, Merger Sub and the
Company shall cooperate in all respects with each other and use its respective
commercially reasonable efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgement, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
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(d) If any objections are asserted with respect to the
transactions contemplated hereby or if any suit is instituted by any
Governmental Entity or any private party challenging any of the transactions
contemplated hereby as violative of any regulatory Law, each of NPI, Merger Sub
and the Company shall use its commercially reasonable efforts to resolve any
such objections or challenge as such Governmental Entity or private party may
have to such transactions under such regulatory Law so as to permit consummation
of the transactions contemplated by this Agreement.
Section 5.15 Conversion of Preferred Stock.
(a) To the extent applicable, NPI hereby consents to the
conversion of all shares of Company Preferred Stock into shares of Company
Common Stock effective immediately prior to the Effective Time.
(b) The Company shall use its commercially reasonable efforts
to obtain the consent of all holders of Company Preferred Stock to the
conversion of such shares into shares of Company Common Stock effective
immediately prior to the Effective Time.
Section 5.16 Reorganization Treatment Tax-Free. The Company, NPI and
Merger Sub shall execute and deliver to Xxxx Xxxx Xxxx & Freidenrich LLP,
counsel to NPI, and Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, counsel to
the Company, certificates substantially in the forms attached hereto as Exhibits
G and H at such time or times as reasonably requested by such law firms in
connection with their respective deliveries of opinions in respect of the
transactions contemplated hereby. Prior to the Effective Time, none of the
Company, NPI or Merger Sub shall take or cause to be taken any action which
would cause to be untrue (or fail to take or cause not to be taken any action
which would cause to be untrue) any of the representations in such
previously-agreed certificates.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 6.1 Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following conditions, any or all of which may be
waived in whole or in part by the party being benefited thereby, to the extent
permitted by applicable Law:
(a) This Agreement shall have been approved and adopted by the
Company Stockholder Approval and the NPI Stockholder Approval.
(b) The Company, NPI and Merger Sub shall have timely obtained
from each Governmental Entity all approvals, waivers and consents, if any,
necessary for consummation of or in connection with the transactions
contemplated hereby, including such approvals, waivers and consents as may be
required under the HSR Act, Securities Act and under blue sky laws, if any,
except for such authorizations, consents or approvals, the failure of which to
have been made or obtained does not and could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(c) There shall not be in effect any Law of any Governmental
Entity of competent jurisdiction restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement and no
Governmental Entity shall have instituted any proceeding which continues to be
pending seeking any such Law.
(d) The Registration Statement shall have been declared
effective by the SEC and shall be effective at the Effective Time, and no stop
order suspending effectiveness shall have been issued; no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness of the
Registration Statement shall have been initiated and be continuing; and all
necessary approvals under state securities Laws or the Securities Act or
Exchange Act relating to the issuance or trading of the NPI Common Stock shall
have been received.
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(e) The NPI Common Stock required to be issued hereunder shall
have been approved for listing on Nasdaq, subject only to official notice of
issuance.
Section 6.2 Conditions to the Obligations of NPI and Merger Sub. The
respective obligations of NPI and Merger Sub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment at or prior to the
Effective Time of each of the following additional conditions, any or all of
which may be waived in whole or part by NPI and Merger Sub to the extent
permitted by applicable Law:
(a) The representations and warranties of the Company contained
herein shall be true (for the purposes of this Section 6.2(a), without regard to
any materiality or Material Adverse Effect qualifier contained therein), except
where the failure to be true, individually or in the aggregate, has not had or
is not reasonably expected to have a Material Adverse Effect on the Company, in
each case on and as of the Closing (except for representations and warranties
made as of a specified date, which shall speak only as of the specified date).
(b) The Company shall have performed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing.
(c) The Company shall have delivered to NPI a certificate,
dated the date of the Closing, signed by the President of the Company (but
without personal liability thereto), certifying as to the fulfillment of the
conditions specified in Section 6.2(a) and Section 6.2(b).
(d) Prior to the Closing, there shall not have occurred any
Material Adverse Effect on the Company.
(e) All holders of shares of Company Preferred Stock shall have
converted such shares into shares of Company Common Stock.
(f) NPI shall have received an opinion of Xxxx Xxxx Xxxx &
Freidenrich LLP, dated the Closing Date, substantially to the effect that on the
basis of facts, representations and assumptions set forth in such opinion which
are consistent with the state of facts existing as of the Closing Date, for
federal income tax purposes the Merger will constitute a "reorganization" within
the meaning of Section 368(a) of the Code.
Section 6.3 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the transactions contemplated by this
Agreement are subject to the fulfillment at or prior to the Effective Time of
each of the following conditions, any or all of which may be waived in whole or
in part by the Company to the extent permitted by applicable Law:
(a) The representations and warranties of NPI and Merger Sub
contained herein shall be true (for the purposes of this Section 6.3(a), without
regard to any materiality or Material Adverse Effect qualifier contained
therein), except where the failure to be true, individually or in the aggregate,
has not had or is not reasonably expected to have a Material Adverse Effect on
NPI, in each case on and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall speak only as of the
specified date).
(b) The Closing Cash shall be no less than $80,000,000.
(c) NPI and Merger Sub shall have performed or complied in all
material respects with all agreements and conditions contained herein required
to be performed or complied with by it prior to or at the time of the Closing.
(d) NPI shall have delivered to the Company a certificate,
dated the date of the Closing, signed by an executive officer of NPI (but
without personal liability thereto), certifying as to the actual Closing Cash
and fulfillment of the conditions specified in Section 6.3(a), Section 6.3(b)
and Section 6.3(c).
(e) Prior to the Closing, there shall not have occurred any
Material Adverse Effect on NPI.
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(f) The Company shall have received an opinion of Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, dated the Closing Date, substantially
to the effect that on the basis of facts, representations and assumptions set
forth in such opinion which are consistent with the state of facts existing as
of the Closing Date, for federal income tax purposes the Merger will constitute
a "reorganization" within the meaning of Section 368(a) of the Code.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
Section 7.1 Termination by Mutual Agreement. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Stockholder Approval and NPI Stockholder Approval referred to in Section 6.1(a),
by mutual written consent of the Company and NPI by action of their respective
boards of directors.
Section 7.2 Termination by either NPI or the Company. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Effective Time by action of the board of directors of either NPI or the Company
if:
(a) the Merger shall not have been consummated by September 30,
2001, whether such date is before or after the date of approval of the Merger by
the Company Stockholder Approval and NPI Stockholder Approval (the "Termination
Date"); provided, however, that if any condition of Closing set forth in Section
6.1 that remains reasonably capable of satisfaction has not been fulfilled or
waived prior to September 30, 2001, the Termination Date shall be automatically
extended to December 31, 2001;
(b) after the Company convenes and holds the Company
Stockholders' Meeting and certifies the vote with respect to the Merger, the
Company Stockholder Approval shall not have been obtained;
(c) after NPI convenes and holds the NPI Stockholders' Meeting
and certifies the vote with respect to the Merger, the NPI Stockholder Approval
shall not have been obtained; or
(d) any Law permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and non-appealable
(whether before or after the approval of the Merger by the Company Stockholder
Approval and NPI Stockholder Approval); provided, however, that the right to
terminate this Agreement pursuant to this Section 7.2 shall not be available to
any party that has breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the
occurrence of the failure of the Merger to be consummated; provided further,
however, that the right to terminate this Agreement pursuant to this Section 7.2
shall not be available to either party in the event that any of its stockholders
who are party to the Voting Agreement have breached their obligations
thereunder.
Section 7.3 Termination by the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after the approval of the Merger by the Company
Stockholder Approval and NPI Stockholder Approval referred to in Section 6.1(a),
by action of the Company board of directors, if:
(a) (i) any of NPI's representations and warranties shall have
been inaccurate as of the date of this Agreement, such that the condition set
forth in Section 6.3 would not be satisfied, or (ii) if (A) any of NPI's
representations and warranties become inaccurate as of a date subsequent to the
date of this Agreement (as if made on such subsequent date), such that the
condition set forth in Section 6.3 would not be satisfied and (B) such
inaccuracy has not been cured by NPI within ten business days after its receipt
of written notice thereof and remains uncured at the time notice of termination
is given, or (iii) any of NPI's covenants contained in this Agreement shall have
been breached, such that the condition set forth in Section 6.3 would not be
satisfied; or
(b) the board of directors of NPI shall have withdrawn its
recommendation of this Agreement or modified the recommendation in a manner
adverse to the Company or shall have resolved to do the foregoing.
(c) if, since the date of this Agreement, there shall have
occurred any Material Adverse Effect on NPI.
Section 7.4 Termination by NPI. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval of the Merger by the Company Stockholder Approval
and NPI Stockholder Approval referred to in Section 6.1(a), by action of the
Board of Directors of NPI, if:
(a) (i) any of the Company's representations and warranties
shall have been inaccurate as of the date of this Agreement, such that the
condition set forth in Section 6.2 would not be satisfied, or (ii) if (A) any of
the Company's representations and warranties become inaccurate as of a date
subsequent to the date of this Agreement (as if made on such subsequent date),
such that the condition set forth in Section 6.2 would not be satisfied and (B)
such inaccuracy has not been cured by the Company within ten business days after
its receipt of written notice thereof and remains uncured at the time notice of
termination is given, or (iii) any of the Company's covenants contained in this
Agreement shall have been breached, such that the condition set forth in Section
6.2 would not be satisfied; or
(b) the board of directors of the Company shall have withdrawn
its recommendation of this Agreement or modified the recommendation in a manner
adverse to NPI or shall have resolved to do the foregoing.
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(c) if, since the date of this Agreement, there shall have
occurred any Material Adverse Effect on the Company.
Section 7.5 Effect of Termination and Abandonment. Subject to the
terms of Section 7.6, in the event of termination of this Agreement and the
abandonment of the Merger pursuant to this ARTICLE VII, this Agreement (other
than this Section 7.5, Section 4.3(c) and Section 8.2(a)) shall become void and
of no effect with no liability on the part of any party hereto (or of any of its
directors, officers, employees, consultants, contractors, agents, legal and
financial advisors, or other representatives); provided, however, that except as
otherwise provided herein, no such termination shall relieve any party hereto of
any liability or damages resulting from any willful breach of this Agreement.
Section 7.6 Termination Fee.
(a) If this Agreement is terminated by NPI or the Company for
any reason other than pursuant to Section 7.4, NPI shall pay to the Company upon
such termination a termination fee of three million dollars ($3,000,000) in cash
in immediately available funds (the "NPI Termination Fee").
(b) In no event shall NPI be required to pay the NPI
Termination Fee if, immediately prior to the applicable termination of this
Agreement, the Company is in material breach of any of its obligations under
this Agreement.
Section 7.7 Amendment. This Agreement may be amended by action taken
by the Company, NPI and Merger Sub at any time before or after approval of the
Merger by the Company Stockholder Approval and NPI Stockholder Approval but,
after any such approvals, no amendment shall be made which changes the amount or
form of the Merger Consideration. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
Section 7.8 Extension; Waiver. At any time prior to the Effective
Time, each party hereto may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained herein or in any
document, certificate or writing delivered pursuant hereto, or (c) waive
compliance by the other party with any of the agreements or conditions contained
herein. Any agreement on the part of either party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
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ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time.
Section 8.2 Entire Agreement; Assignment.
(a) This Agreement constitutes the entire agreement between the
parties hereto in respect of the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, between the parties
in respect of the subject matter hereof (including, without limitation, the
Option Agreement between the Company and NPI effective as of March 30, 2001),
other than the Non-disclosure Agreement between the parties dated as of March
30, 2001 (which shall remain in effect).
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by operation of Law (including, by
merger or consolidation) or otherwise. Any assignment in violation of the
preceding sentence shall be void. 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 permitted assigns.
Section 8.3 Notices. All notices, requests, instructions or other
documents to be given under this Agreement shall be in writing and shall be
deemed given, (a) five business days following sending by registered or
certified mail, postage prepaid, (b) when sent if sent by facsimile; provided,
however, that the facsimile is promptly confirmed by telephone confirmation
thereof by the intended recipient, (c) when delivered, if delivered personally
to the intended recipient, and (d) one business day following sending by
overnight delivery via a national courier service, and in each case, addressed
to a party at the following address for such party:
if to Merger Sub or NPI, to: Network Peripherals Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Chief
Executive Officer
Fax: (000) 000-0000
with copies to: Xxxx Xxxx Xxxx & Freidenrich LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company, to: FalconStor, Inc.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attention: XxxXxxx Xxxx, Chief
Executive Officer
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx &
Wolosky LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the other in writing in the manner set
forth above.
Section 8.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without giving
effect to the choice of Law principles thereof.
Section 8.5 Expenses. The Company shall be solely responsible for the
legal, accounting and other fees and expenses incurred by the Company in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby. NPI and Merger Sub shall be solely responsible
for the legal, accounting and other fees and expenses incurred by NPI and Merger
Sub in connection with execution of this Agreement and the consummation of the
transactions contemplated hereby. Any and all Transfer Taxes shall be timely
paid by the Company.
Section 8.6 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 8.7 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Section 5.7, nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
Section 8.8 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 8.9 Specific Performance. The parties 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 an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, this being in addition
to any other remedy to which they are entitled at Law or in equity.
Section 8.10 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 one or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 8.11 Further Assurances. Each party to this Agreement agrees
(a) to furnish upon request to the other party such further information, (b) to
execute and deliver to the other party such other documents and (c) to do such
other acts and things as the other party reasonably requests for the purpose of
carrying out the intent of this Agreement and the documents and instruments
referred to herein.
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Section 8.12 Interpretation.
(a) The words "hereof," "herein," "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit, and schedule references are to the
articles, sections, paragraphs, exhibits, and schedules of this Agreement unless
otherwise specified. Whenever the words "include," "includes," or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation." All terms defined in this Agreement shall have the defined
meanings contained herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Any agreement, instrument, or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, instrument, or statute as from time to time, amended, qualified
or supplemented, including (in the case of agreements and instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the date
hereof," and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to May 4, 2001.
(c) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
Section 8.13 Definitions. As used herein,
(a) "Affiliate" has the meaning given to it in Rule 12b-2 of
Regulation 12B under the Exchange Act.
(b) "Beneficial ownership" or "beneficially own" has the
meaning provided in Section 13(d) of the Exchange Act and the rules and
regulations thereunder.
(c) "Know" or "knowledge" means, (i) in respect of NPI, the
knowledge of NPI's executive officers and (ii) in respect of the Company, the
knowledge of the Company's executive officers.
(d) "Lien" means, in respect of any asset (including, any
security) any mortgage, lien, pledge, charge, security interest, or encumbrance
of any kind in respect of such asset.
(e) "Permitted Lien" means a statutory Lien not yet delinquent;
a purchase money Lien arising in the ordinary course of business consistent with
past practices; a Lien reflected in the financial statements of the applicable
party; or a Lien which does not materially detract from the value or impair the
use of the asset or property in question.
(f) "Person" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
(g) "Subsidiary" means, in respect of any party, any
corporation, partnership or other entity or organization, whether incorporated
or unincorporated, of which (i) such other party or any other subsidiary of such
party is a general partner (excluding such partnerships where such party or any
subsidiary of such party does 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 in respect of such corporation
or 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.
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(h) "Transfer Taxes" means any and all state, local, foreign or
provincial sales, use, real property, stock transfer or similar taxes (including
any interest or penalties with respect thereto, but not including any
shareholder level taxes based upon net income) attributable to the transactions
contemplated herein.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed on its behalf as of the date first above written.
FALCONSTOR, INC.
By: /s/ XXXXXXX XXXX
----------------------------------------------
Name: XxxXxxx Xxxx
Title: Chief Executive Officer
NETWORK PERIPHERALS INC.
By: /s/ XXXXX XXXXX
----------------------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
EMPIRE ACQUISITION CORP.
By: /s/ XXXXX XXXXX
----------------------------------------------
Name: Xxxxx Xxxxx
Title: President
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