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EXHIBIT ii
DEPOSITORY AGREEMENT
This Depository Agreement is made as of August 29, 2000, by and among
U.S. Stock Transfer Corporation (the "CUSTODIAN"), iGo Corporation, a Delaware
corporation ("IGO"), Xtend Micro Products, Inc., a California corporation
("XTEND") and the shareholders of Xtend Micro Products, Inc. (the "XTEND
SHAREHOLDERS" and collectively with Xtend, the "INDEMNITORS"). Terms not
otherwise defined herein shall have the meaning set forth in the Purchase
Agreement (as defined below).
RECITALS
WHEREAS, iGo, Xtend, the Xtend Shareholders, and XMP Acquisition Corp.,
a California corporation and wholly-owned subsidiary of iGo ("SUB"), have
entered into an Asset Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of
August 29, 2000, providing for the purchase of substantially all of the assets
of Xtend by iGo and Sub (the "ASSET PURCHASE"); and
WHEREAS, pursuant to Article X of the Purchase Agreement, a copy of
which is attached hereto as Annex A ("ARTICLE X"), a Depository fund (the
"DEPOSITORY FUND") will be established to compensate iGo for certain Losses (as
defined in Article X) arising out of any misrepresentation or breach or default
in connection with any of the representations, warranties, covenants and
agreements given or made by Xtend and/or the Xtend Shareholders in the Purchase
Agreement, the Xtend Disclosure Schedule or any exhibit or schedule to the
Purchase Agreement or the failure to achieve certain operational milestones
following the Closing; and
WHEREAS, the Indemnitors have agreed to undertake certain obligations
specified in Article X; and
WHEREAS, Article X provides for a Depository Fund of an aggregate of
1,896,574 shares of iGo Common Stock issuable in connection with the Asset
Purchase (the "DEPOSITORY SHARES"), such shares to be held in custody by the
Custodian; and
WHEREAS, the parties hereto desire to set forth further terms and
conditions in addition to those set forth in the Purchase Agreement relating to
the operation of the Depository Fund.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants contained herein, and intending to be legally bound, hereby agree as
follows:
1. Appointment of Custodian. The Custodian is hereby appointed and
hereby accepts such appointment as the custodian pursuant to the Asset Purchase
and, in that capacity, the Custodian shall have authorization to receive from
iGo and hold the Depository Shares and transmit the same to iGo and/or the
Indemnitors upon satisfaction of the conditions set forth herein and in
Article X.
2. Depository and Depository Shares. Pursuant to the Purchase
Agreement, iGo shall deposit or cause to be deposited in custody with the
Custodian, as promptly as is practicable
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after the Effective Time (as defined in the Purchase Agreement) of the Asset
Purchase, a stock certificate or certificates representing the Depository Shares
which shall be registered in the name of the Custodian, but held in custody by
the Custodian. The Depository Shares shall be held and distributed by the
Custodian in accordance with the terms and conditions of the Purchase Agreement
and this Agreement.
3. Rights and Obligations of the Parties. The Custodian shall be
entitled to such rights and shall perform such duties of the custodian as set
forth herein and in Article X (collectively, the "DUTIES"), in accordance with
the terms and conditions of this Agreement and Article X. iGo, Xtend and the
Indemnitors shall be entitled to their respective rights and shall perform their
respective duties and obligations as set forth herein and in Article X, in
accordance with the terms hereof and thereof. In the event that the terms of
this Agreement conflict in any way with the provisions of Article X, Article X
shall control.
4. Depository Period. The period during which iGo may make any claim
against the Depository Fund under Article X (the "DEPOSITORY PERIOD") shall
terminate with respect to the Depository Fund on the date set forth in Section
10.3(a) of Article X.
5. Duties of Custodian. In addition to the Duties set forth in Article
X, the Duties of the Custodian shall include the following:
(a) The Custodian shall hold and safeguard the Depository
Shares during the Depository Period, shall treat the Depository Fund as trust
funds in accordance with the terms of this Agreement and Article X and not as
the property of iGo, and shall hold and dispose of the Depository Shares only in
accordance with the terms hereof.
(b) The Depository Shares shall be voted by the Custodian in
accordance with the instructions received by the Custodian from the beneficial
owners of such shares.
(c) Promptly following termination of the applicable
Depository Period, the Custodian shall deliver to Xtend the proper number of
Depository Shares and other property in the Depository Fund in excess of any
amount of such Depository Shares or other property sufficient, to satisfy any
unsatisfied claims. As soon as all such claims have been resolved, the Custodian
shall deliver to Xtend all of the Depository Shares and other property remaining
in the Depository Fund and not required to satisfy such claims and expenses.
(d) The Custodian shall observe the instructions set forth in
any writing executed by iGo and the Indemnitors.
6. Distribution. Any cash dividends, dividends payable in securities or
other distributions of any kind (but excluding any shares of iGo capital stock
received upon a stock split or stock dividend) shall be promptly distributed by
the Custodian to the beneficial holder of the Depository Shares to which such
distribution relates. Any shares of iGo Common Stock received by the Custodian
upon a stock split made in respect of any securities in the Depository Fund
shall be added to the Depository Fund and become a part thereof. Any provision
hereof or of Article X shall be adjusted to appropriately reflect any stock
split or reverse stock split.
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7. Maintenance of Records. The Custodian will keep and maintain
complete and accurate ledgers showing all shares exchanged by the Custodian and
payments made by the Custodian. The Custodian is authorized to cooperate with
and furnish information to any organization or legal representative designated
from time to time by iGo in any manner reasonably requested by any of them in
connection with the Asset Purchase and share exchange pursuant thereto.
8. Termination of Exchange and Custodian's Duties and Obligations. This
Agreement shall terminate upon the release by the Custodian of all of the
Depository Shares in accordance with the terms of this Agreement; provided that
the provisions of Section 9 and 15 shall survive the termination of this
Agreement.
9. Exculpatory Provisions.
(a) The Custodian shall be obligated only for the performance
of such Duties as are specifically set forth herein and in the Purchase
Agreement and may rely and shall be protected in relying or refraining from
acting on any instrument reasonably believed to be genuine and to have been
signed or presented by the proper party or parties. The Custodian shall not be
liable for forgeries or false impersonations. The Custodian shall not be liable
for any act done or omitted hereunder as custodian except for gross negligence
or willful misconduct. The Custodian shall, in no case or event be liable for
any representations or warranties of Xtend, the Xtend Shareholders, iGo or Sub.
Any act done or omitted pursuant to the advice or opinion of counsel shall be
conclusive evidence of the good faith of the Custodian.
(b) The Custodian is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person,
excepting only orders or process of courts of law as provided in Section 12.17
of the Purchase Agreement, and is hereby expressly authorized to comply with and
obey orders, judgments or decrees of any court or rulings of any arbitrators. In
case the Custodian obeys or complies with any such order, judgment or decree of
any court or such ruling of any arbitrator, the Custodian shall not be liable to
any of the parties hereto or to any other person by reason of such compliance,
notwithstanding any such order, judgment, decree or arbitrators' ruling being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
(c) The Custodian shall not be liable in any respect on
account of the identity, authority or rights of the parties executing or
delivering or purporting to execute or deliver the Agreement or any documents or
papers deposited or called for thereunder.
(d) The Custodian shall not be liable for the outlawing of any
rights under any statute of limitations with respect to the Agreement or any
documents deposited with the Custodian.
10. Alteration of Duties. The Duties may be altered, amended, modified
or revoked only by a writing signed by all of the parties hereto.
11. Resignation and Removal of Custodians. The Custodian may resign as
such at any time with or without cause by giving at least thirty (30) days'
prior written notice to each of iGo and the Indemnitors, such resignation to be
effective thirty (30) days following the date such notice is given. In addition,
the Representatives of iGo and the Indemnitors may jointly remove
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the Custodian at any time with or without cause, by an instrument (which may be
executed in counterparts) given to the Custodian which instrument shall
designate the effective date of such removal. Successor Custodians shall be
appointed in accordance with the terms of Section 10.6(e) of the Purchase
Agreement. Any such successor custodian and exchange Custodian shall deliver to
iGo and the Indemnitors a written instrument accepting such appointment, and
thereupon it shall succeed to all the rights and duties of the custodian
hereunder, as appropriate.
12. Further Instruments. If the Custodian reasonably requires other or
further instruments in connection with performance of the Duties, the necessary
parties hereto shall join in furnishing such instruments.
13. Disputes. It is understood and agreed that should any dispute arise
with respect to the delivery and/or ownership or right of possession of the
securities held by the Custodian hereunder, the Custodian is authorized and
directed to act in accordance with, and in reliance upon, the terms hereof and
of Article X.
14. Fees and Expenses. iGo shall pay the Custodian such fees as shall
be agreed upon by iGo and such entity.
15. Indemnification. In consideration of the Custodian's acceptance of
this appointment, the Indemnitors and iGo agree jointly and severally to
indemnify and hold the Custodian harmless as to any liability incurred by it to
any person, firm or corporation by reason of their having accepted such
appointments or in carrying out the terms hereof and the Purchase Agreement, and
to reimburse the Custodian for all its costs and expenses, including, among
other things, counsel fees and expenses, reasonably incurred by reason of any
matter as to which an indemnity is paid; provided, however, that no indemnity
need be paid in case of the Custodian's gross negligence, willful misconduct or
breach of this Agreement.
16. General.
(a) Any notice given hereunder shall be in writing and shall
be deemed effective upon the earlier of personal delivery or the third day after
mailing by certified or registered mail, postage prepaid as follows:
To iGo or Sub:
iGo Corporation
0000 Xxxxxxx Xxxxx
Xxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx Xxxxxxx, Chief Financial Officer
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With a copy to:
Xxxx Xxxx Peek Xxxxxxxx Xxxxxx and Xxxxxxxx
X.X. Xxx 0000
Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
To Xtend or the Indemnitors:
Xxxx Xxxxxxxxxx
0000 Xxxx Xxxxx Xxxxxxx, Xxxxx 0
Xxxxxx xxx Xxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
To the Custodian:
U.S. Stock Transfer Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
or to such other address as any party may have furnished in writing to the other
parties in the manner provided above.
(b) The captions in this Depository Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Depository Agreement.
(c) This Depository Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof, but all of which together shall constitute one agreement.
(d) No party may, without the prior express written consent of
each other party, assign this Agreement in whole or in part. This Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts made
and to be performed entirely within the State of California.
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IN WITNESS WHEREOF, each of the parties has executed this Depository
Agreement as of the date first above written.
U.S. STOCK TRANSFER CORPORATION
as Custodian
By: /s/ Xxxx Xxxx
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Name: Xxxx Xxxx
Title: Assistant Vice-President
iGo CORPORATION
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Chief Financial Officer
INDEMNITORS
XTEND MICRO PRODUCTS, INC.
By: /s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx, President
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxxx
/s/ Xxx Xxxxxx
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Xxx Xxxxxx
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