EXHIBIT 99.2
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made
and entered into as of November 18, 1996 (the "Closing Date") by and among
CALCOMP TECHNOLOGY, INC., a Delaware corporation ("CalComp"), CALCOMP
ACQUISITION SUB, INC., a California corporation and a wholly-owned subsidiary of
CalComp ("Sub"), TOPAZ TECHNOLOGIES, INC., a California corporation ("Topaz"),
ANDREAS BIBL, an individual, ▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
an individual. (Messrs. Bibl, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ are referred to in this
Agreement collectively as "Shareholders" and individually as a "Shareholder").
R E C I T A L S
- - - - - - - -
A. Sub is a recently formed California corporation organized for the
purpose of effecting the transactions contemplated by this Agreement.
B. CalComp is the owner of all of the issued and outstanding shares
of the common stock of Sub.
C. The respective Boards of Directors of CalComp, Sub and Topaz deem
it advisable and in the best interests of Sub and Topaz, respectively, and their
respective shareholders, that Sub merge with and into Topaz, all pursuant to
this Agreement and an agreement of merger (the "Agreement of Merger")
substantially in the form of Exhibit A attached hereto.
D. The respective Boards of Directors of CalComp, Sub and Topaz have
adopted this Agreement as a plan of reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended.
E. The Shareholders own One Hundred Percent (100%) of the issued and
outstanding capital stock of Topaz and desire the merger of Sub into Topaz upon
the terms and conditions hereinafter set forth (the "Merger").
NOW, THEREFORE, in order to consummate the Merger and in consideration
of the mutual representations, warranties, and agreements contained herein, the
parties hereto agree as follows:
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ARTICLE I
TERMS OF MERGER
1.1 The Merger. Subject to the terms and conditions of this
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Agreement and the laws of the State of California, Sub and Topaz shall execute
and file, among other things, the Agreement of Merger and other documents
required by law in the offices of the Secretary of State of the State of
California pursuant to which Sub will be merged with and into Topaz with the
result that Topaz will be the surviving corporation ("Surviving Corporation")
and will become a wholly-owned subsidiary of CalComp. The Merger shall become
effective at the time set forth in the Agreement of Merger (the "Effective
Date").
1.2 Status and Conversion of Stock. The status of the outstanding
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securities of the parties to the Merger and the manner and basis of converting
shares of Topaz common stock into rights to receive cash and CalComp Common
Stock shall be as follows:
(a) The shares of Topaz common stock issued and outstanding
immediately prior to the Merger and all rights existing with respect thereto
shall, by virtue of the Merger and without any action on the part of the holders
thereof, cease to be outstanding and shall be converted into the right to
receive cash and shares of CalComp Common Stock as set forth below:
Shares of CalComp
Name of Topaz Shares of Topaz Cash Received Common Stock
Shareholder Common Stock Owned in Merger Received in Merger
----------------- ------------------ ------------- ------------------
Andreas Bibl 33,000 $250,000 500,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 33,000 $250,000 500,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 33,000 $250,000 500,000
(b) The shares of capital stock of CalComp outstanding
immediately prior to the Merger will not be affected by the Merger;
(c) The shares of capital stock of Sub shall be converted into
and become one fully paid and nonassessable share of Common Stock of the
Surviving Corporation.
(d) At the Closing (as defined in Section 7.1 hereof), each
Shareholder shall surrender certificate(s) evidencing all shares of any class of
capital stock of Topaz held of record or beneficially by such Shareholder, duly
endorsed as CalComp may require, to CalComp for cancellation. In the amounts
set forth in Section 1.2(a) above, cash and certificates evidencing shares of
CalComp Common Stock issued in the Merger (the "Merger Shares") shall be
delivered at the Closing to the persons legally entitled thereto, subject to all
other provisions hereof.
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1.3 Articles of Incorporation; Name. The Articles of Incorporation
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of Sub, as amended and set forth in the Agreement of Merger, shall be the
Articles of Incorporation of the Surviving Corporation after the Effective Date,
and thereafter may be amended in accordance with its terms and as provided by
law and this Agreement. As set forth in such amended Articles of Incorporation,
the name of the Surviving Corporation shall be Topaz Technologies, Inc.
1.4 Bylaws. The Bylaws of Sub as in effect on the Effective Date
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shall be the Bylaws of the Surviving Corporation.
1.5 Board of Directors; Officers. The directors of Sub immediately
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prior to the Effective Date shall be the directors of the Surviving Corporation
and the officers of Topaz immediately prior to the Effective Date shall be the
officers of the Surviving Corporation, with such additional officers and other
changes as the Board of Directors of Sub shall determine, in each case until
their respective successors are duly elected and qualified.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF TOPAZ AND SHAREHOLDERS
Subject to the exceptions set forth in the disclosure schedule (the
"Disclosure Schedule") delivered to CalComp and Sub concurrently herewith and
attached hereto as Exhibit B (it being understood and agreed that matters
disclosed in the Disclosure Schedule shall be deemed to qualify only the
specific representation and warranty referred to by section therein), Topaz and
each Shareholder, jointly and severally, hereby represent and warrant to CalComp
and Sub as follows:
2.1 Organization, Standing, and Qualification of Topaz. Topaz is
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duly organized, validly existing, and in good standing under the laws of the
State of California and has all necessary corporate powers to own, lease and
operate its properties and carry on its business as now being conducted.
Neither the ownership of its properties nor the nature of its business requires
Topaz to be qualified in any jurisdiction other than the state of its in
corporation. This is the only jurisdiction in which the nature of Topaz's
business or of its properties makes such qualification necessary, and the
failure to be qualified in any other jurisdiction would not have a material
adverse effect on Topaz.
2.2 Capitalization. The authorized capital stock of Topaz consists
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solely of 1,000,000 shares of common stock, without par value, of which 99,000
shares (the "Topaz Shares") are issued and outstanding and are owned of record
and beneficially by the Shareholders as set forth in Section 4.1 of this
Agreement. All the Topaz Shares are validly issued, fully paid, and
nonassessable, and such shares have been so issued in full compliance with all
federal and state securities laws. There are no outstanding subscriptions,
options, rights, warrants, convertible securities or other agreements or
commitments obligating Topaz to issue or to transfer from treasury any
additional shares of its capital stock of any class. Topaz has
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not issued any stock appreciation right or any similar right entitling any
person to any payment based on the value of Topaz capital stock.
2.3 Authority. The execution of this Agreement and the consummation
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of the transactions contemplated hereby have been duly authorized by the Board
of Directors of Topaz. Topaz and the Shareholders have the right, power, legal
capacity and authority to enter into and perform their respective obligations
under this Agreement. This Agreement is the valid and binding obligation of
Topaz and no further corporate authorization on the part of Topaz is necessary
to consummate the transactions contemplated hereby or thereby. Neither the
execution and delivery of this Agreement, the consummation in accordance with
the terms of this Agreement of the transactions contemplated hereby nor
compliance by Topaz with any provision hereof or thereof will (i) conflict with
or result in a breach of any provision of its charter or bylaws (or other
governing documents) or give rise to any right of termination, cancellation or
acceleration under any of the terms, conditions or provisions of any material
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Topaz is a party or by which Topaz or any of its properties
or assets may be bound, or (ii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Topaz or any of its properties or
assets. No consent is required in connection with the execution and delivery by
Topaz of this Agreement or the consummation of the transactions contemplated
hereby.
2.4 Subsidiaries. Topaz does not own, either directly or indirectly,
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any interest or investment (whether equity or debt) in any corporation,
partnership, business, trust, or other entity.
2.5 Financial Statements. Schedule 2.5 to this Agreement sets forth
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the balance sheet of Topaz as of September 30, 1996 (the "Balance Sheet"). The
Balance Sheet fairly and accurately represents the assets and liabilities of
Topaz as of September 30, 1996. All liabilities represented in the Balance
Sheet have been properly accrued in accordance with generally accepted
accounting principles.
2.6 Absence of Changes in Topaz. Since September 30, 1996 there has
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been no:
(a) Transaction by Topaz except in the ordinary course of
business as conducted on that date;
(b) Capital expenditure by Topaz exceeding $25,000 (except for
expenditures funded by CalComp and described in Schedule 2.14 to this
Agreement);
(c) Material adverse change in the financial condition,
liabilities, assets, business, or prospects of Topaz;
(d) Destruction, damage to, or loss of any asset of Topaz
(whether insured or uninsured) that materially and adversely affects the
financial condition, business, or prospects of Topaz;
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(e) Change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization policies or rates) by
Topaz;
(f) Revaluation by Topaz of any of its assets;
(g) Declaration, setting aside, or payment of a dividend or other
distribution in respect to the capital stock of Topaz, or any direct or indirect
redemption, purchase, or other acquisition by Topaz of any of its shares of
capital stock;
(h) Increase in the salary or other compensation payable or to
become payable by Topaz to any of its officers, directors, or employees or
declaration, payment, or commitment or obligation of any kind for the payment,
by Topaz, of a bonus or other additional salary or compensation to any such
person;
(i) Sale or transfer of any asset of Topaz, except in the
ordinary course of business;
(j) Amendment or termination of any contract, agreement, or
license to which Topaz is a party, except in the ordinary course of business;
(k) Loan by Topaz to any person or entity, or guaranty by Topaz
of any loan;
(l) Mortgage, pledge, or other encumbrance of any asset of Topaz;
(m) Waiver or release of any right or claim of Topaz, except in
the ordinary course of business;
(n) Commencement, notice, or threat of commencement of any civil
litigation or governmental proceeding against Topaz or investigation of its
affairs;
(o) Labor trouble or claim of wrongful discharge or other
unlawful labor practice or action;
(p) Issuance or sale by Topaz of any shares of its capital stock
of any class or of any other of its securities;
(q) Agreement by Topaz to do any of the things described in the
preceding clauses 2.6(a) through (p); or
(r) Other event or condition of any character that has or might
reasonably have a material and adverse effect on the financial condition,
business, assets, liabilities, or prospects of Topaz.
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2.7 Absence of Undisclosed Liabilities. Topaz has no debt,
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liability, or obligation of any nature, whether accrued, absolute, contingent,
or otherwise, and whether due or to become due, that is not reflected or
reserved against in the Balance Sheet, except for those set forth in Schedule
2.7 to this Agreement and those that may have been incurred after the date of
the Balance Sheet and which were incurred in the ordinary course of business and
are usual and normal in amount both individually and in the aggregate.
2.8 Tax Returns and Audits. To the best knowledge of Topaz and the
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Shareholders, within the times and in the manner prescribed by law, Topaz and
the Shareholders have filed all federal, state and local tax returns required by
law and have paid all taxes, assessments, and penalties due and payable. The
provisions for taxes reflected in the Balance Sheet are adequate for federal,
state, county, and local taxes for the period ending on the date of that balance
sheet and for all prior periods, whether disputed or undisputed. There are no
present disputes about taxes of any nature payable by Topaz. Topaz has never
filed, and will not file on or before the date hereof, any consent under
Internal Revenue Code section 341(f).
2.9 Assets of Business.
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(a) Real Property.
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(i) Description. Schedule 2.9(a) to this Agreement sets
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forth a complete and accurate list of all real property owned by or leased
to Topaz, together with an accurate brief description of each property.
Schedule 2.9(a) also sets forth brief descriptions of all buildings and
other major improvements located on these premises.
(ii) Zoning. The zoning of each parcel of property
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described in Schedule 2.9(a) permits the presently existing improvements
and the continuation of the business presently being conducted on such
parcel.
(iii) Absence of Proceedings. Topaz has not commenced, nor
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has it or any of the Shareholders received notice of the commencement of,
any proceeding that would affect the present zoning classification of any
such parcel.
(b) Inventory. Because Topaz is not yet in production of any
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products, the Balance Sheet has no entries for inventory. No items are subject
to security interests, except as set forth in Schedule 2.9(b) to this Agreement.
(c) Other Tangible Personal Property. The books and records of
--------------------------------
Topaz contain a complete and accurate description and specify the location of
all trucks, automobiles, machinery, equipment, furniture, supplies, tools, dies,
jigs, molds, patterns, drawings, and all other tangible personal property owned
by, in the possession of, or used by Topaz in connection with their respective
businesses, work in process, and finished goods. Except as stated in Schedule
2.9(c), no personal property used by Topaz in connection with its business is
held under any lease, security agreement, conditional sales contract, or other
title retention or security arrangement. Any such personal property located
other than in the possession and under the
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control of Topaz consists of molds which are being held by vendors to make
additional parts. The tangible personal property reflected in those books and
records constitutes all such tangible personal property necessary for the
conduct by Topaz of its business as now conducted.
(d) Accounts Receivable. All accounts receivable of Topaz shown on
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the Balance Sheet and set forth individually in Schedule 2.9(d), and all
accounts receivable of Topaz created after September 30, 1996 arose from valid
sales in the ordinary course of business. These accounts have been collected in
full since that date, or are collectible at their full amounts.
(e) Trade Names, Trademarks, and Copyrights. Schedule 2.9(e) to this
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Agreement is a schedule of all trade names, trademarks, service marks, and
copyrights and their registrations, owned by Topaz or in which they have any
rights or licenses, together with a brief description of each. To the best
knowledge of Topaz and the Shareholders there is no infringement or alleged
infringement by others of any trade name, trademark, service ▇▇▇▇, or copyright
belonging to any other person, firm, or corporation. Except as set forth in
Schedule 2.9(e), Topaz is not a party to any license, agreement, or arrangement,
whether as licensor, licensee, franchisor, franchisee, or otherwise, with
respect to any trademarks, service marks, trade names, or applications for them,
or any copyrights. Topaz owns, or holds adequate licenses or other rights to
use, all trademarks, service marks, trade names, and copyrights necessary for
its business as now conducted (including without limitation those listed in
Schedule 2.9(e)), and that use does not, and will not, conflict with, infringe
on, or otherwise violate any rights of others. Topaz has the right to sell or
assign to CalComp all owned trademarks, trade names, service marks, and all such
licenses and other rights.
(f) Patents and Patent Rights.
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(i) Schedule 2.9(f) to this Agreement is a complete schedule of
all patents, inventions, industrial models, processes, designs, and
applications for patents owned by Topaz or in which they have any rights,
licenses, or immunities;
(ii) The patents and applications for patents listed in Schedule
2.9(f) are valid and in full force and effect and are not subject to any
taxes, maintenance fees, or actions falling due within sixty (60) days
after the Closing Date;
(iii) Except as set forth in Schedule 2.9(f), there have been no
interference actions or other judicial, arbitration, or other adversary
proceedings concerning the patents or applications for patents listed in
Schedule 2.9(f). Each patent application is awaiting action by its
respective patent office except as otherwise indicated in Schedule 2.9(f).
(iv) Except as set forth in Schedule 2.9(f) to this Agreement,
the manufacture, use, or sale of the inventions, models, designs, and
systems covered by the patents and applications for patents listed in
Schedule 2.9(f) do not, to the best knowledge of Topaz and the
Shareholders, violate or infringe on any patent or any
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proprietary or personal right of any person, firm, or corporation; and
Topaz has not infringed and is not now infringing on any patent or other
right belonging to any person, firm, or corporation.
(v) Except as set forth in Schedule 2.9(f), Topaz is not a party
to any license, agreement, or arrangement, whether as licensee, licensor,
or otherwise, with respect to any patent, application for patent,
invention, design, model, process, trade secret, or formula.
(vi) Topaz has the right and authority to use and to transfer to
CalComp such inventions, trade secrets, processes, models, designs, and
formulas as are necessary to enable it to conduct and continue to conduct
all phases of its business in the manner presently conducted by it, and
that use does not, to the best knowledge of Topaz and the Shareholders,
conflict with, infringe on, or violate any patent or other rights of
others.
(g) Trade Secrets. To the best knowledge of Topaz and the
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Shareholders, Schedule 2.9(g) to this Agreement is a complete reference, without
extensive or revealing descriptions, to Topaz' trade secrets, including all
processes, know-how, materials, techniques, computer programs, and other
technical data. The specific location of each trade secret's documentation,
including its complete description, specifications, charts, procedures, and
other material relating to it, is also set forth in that exhibit. Each trade
secret's documentation is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and proper use by
CalComp without reliance on the special knowledge or memory of others. Topaz is
the sole owner of each of these trade secrets, free and clear of any liens,
encumbrances, restrictions, or legal or equitable claims of others, except as
specifically stated in Schedule 2.9(g). Topaz has taken all reasonable security
measures to protect the secrecy, confidentiality, and value of these trade
secrets, and any of its employees and any other persons who, either alone or in
concert with others, developed, invented, discovered, derived, programmed, or
designed these secrets, or who have knowledge of or access to information
relating to them, have been put on notice and, if appropriate, have entered into
agreements that these secrets are proprietary to Topaz and not to be divulged or
misused. All these trade secrets are presently valid and protectible and are
not part of the public knowledge or literature; they have not, to the best
knowledge of Topaz and the Shareholders, been used, divulged, or appropriated
for the benefit of any past or present employees or other persons, or to the
detriment of Topaz.
2.10 Title to Assets. Topaz has good and marketable title to all its
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respective assets and interests in assets, whether real, personal, or mixed,
tangible or intangible, which constitute all the assets and interests in assets
that are used in the business of Topaz. All these assets are free and clear of
restrictions on or conditions to transfer or assignment and free and clear of
mortgages, liens, pledges, charges, encumbrances, equities, claims, easements,
rights of way, covenants, conditions, or restrictions, except for (i) those
disclosed in the Balance Sheet; (ii) the lien of current taxes not yet due and
payable; and (iii) possible minor matters that, in the aggregate, are not
substantial in amount and do not materially detract from or interfere with the
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present or intended use of any of these assets or materially impair business
operations. Topaz is not in default or in arrears in any material respect under
any lease. All real property and tangible personal property of Topaz that is
necessary to the operation of its business is in good operating condition and
repair, ordinary wear and tear excepted. Topaz is in possession of all premises
leased to it from others. None of the Shareholders nor any officer, director,
or employee of Topaz, nor any spouse, child, or other relative of any of these
persons, owns, or has any interest, directly or indirectly, in any of the real
or personal property owned by or leased to Topaz or any copyrights, patents,
trademarks, trade names, or trade secrets licensed by Topaz. Topaz occupies no
real property in violation of any law, regulation, or decree.
2.11 Environmental Matters.
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(a) Definitions. For purposes of this Section 2.11, the
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following terms shall have the indicated meaning:
(i) "Environmental Law" means any federal, state, local or
foreign law (including case or common law), statute, ordinance, rule,
regulation, code, license, permit, authorization, approval, consent, order,
judgment, decree, injunction or agreement with any governmental entity
relating to (A) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface soil, subsurface soil,
plant and animal life or any other natural resource), or (B) the use,
storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous
Substances. The term "Environmental Law" includes without limitation (A)
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), as amended, 42 U.S.C. (S) 9601, et seq; the Resource
Conservation and Recovery Act ("RCRA"), as amended, 42 U.S.C. (S) 6901, et
seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. (S)
1251, et seq; the Toxic Substances Control Act ("TSCA"), as amended, 15
U.S.C. 9601, et seq; the Emergency Planning and Community Right to Know
Act, 42 U.S.C. (S) 11001, et seq; the Safe Drinking Water Act, 42 U.S.C.
(S) 300f, et seq; the Solid Waste Disposal Act, as amended; and all
comparable state and local laws, and (B) any common law (including without
limitation common law that may impose strict liability) that may impose
liability or obligations for injuries or damages to, or threatened as a
result of, the presence of or exposure to any Hazardous Substance.
(ii) "Hazardous Substance(s)" means any substance that is
toxic, ignitable, reactive, corrosive, radioactive, or caustic or is
regulated as a hazardous substance, contaminant, toxic substance, toxic
pollutant, hazardous waste, or pollutant, including without limitation,
petroleum, its derivatives, by-products and other hydrocarbons, or is
otherwise regulated under or the subject of applicable Environmental Laws.
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(iii) "Remedial Action" means the investigation, removal,
clean-up or remediation of contamination, environmental degradation or
damage arising from or related to the generation, use, handling, treatment,
storage, transportation, disposal, discharge, release, threatened release
or emission of Hazardous Substances, including without limitation,
investigations, responses and remedial actions under CERCLA, corrective
action under RCRA 42 U.S.C. (S)(S) 3004(u) and (v), 3008(h) and 7003, and
clean-up requirements under Environmental Laws.
(b) No Violation or Liability. Neither Topaz nor any properties
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owned or operated by Topaz or in which it has a security interest, has been,
or is in any material respect, in violation of or liable under any
Environmental Law.
(c) No Property-Related Pending Actions or Claims. There are no
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actions, suits or proceedings, or demands, claims, notices or investigations
(including without limitation notices, demand letters or requests for
information from any environmental agency) instituted, pending or, to the best
knowledge of Topaz and the Shareholders, threatened, relating to the liability
of any properties owned or operated by Topaz or in which such entity has a
security interest under any Environmental Law.
(d) Property Not Operated in Violation of Environmental Laws.
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The facilities occupied or used by Topaz and any other real property presently
or formerly owned by, used by or leased to or by Topaz or any predecessor of
Topaz (collectively, the "Property"), the existing and prior uses of such
Property and all operations of the business of Topaz or any predecessor of Topaz
comply, and have at all times complied, in all material respects with, all
Environmental Laws, and Topaz is not in violation of nor has it violated, in
connection with the ownership, use, maintenance or operation of such Property or
the conduct of its business, any Environmental Law.
(e) Environmental Permits, Registrations, Approvals and Licenses.
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Topaz has all material permits, registrations, approvals and licenses required
by any governmental agency under any Environmental Law.
(f) No Discharges. There has been no spill, discharge, leak,
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emission, injection, disposal, escape, dumping or release of any kind on,
beneath or above such Property or into the environment surrounding such Property
of any Hazardous Substances in any material respect in violation of
Environmental Laws or requiring Remedial Action.
(g) No Production of Hazardous Substances. There has not been by
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Topaz, nor is there any anticipated, nor to the best knowledge of Topaz and the
shareholders has there been any past: storage, disposal, generation,
manufacture, refinement, transportation, production or treatment of any
Hazardous Materials at, upon or from such Property.
(h) No Asbestos-Containing Materials. There are no asbestos-
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containing materials, underground storage tanks or polychlorinated biphenyls
(PCBs) located on such Property.
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(i) No Claims Against Topaz Alleging Failure to Comply with
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Environmental Laws. There are no claims, notices of violations, notice letters,
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investigations, inquiries or other proceedings now pending or, to the best
knowledge of Topaz and the Shareholders, threatened, by any governmental entity
or any foreign governmental entity or third party with respect to the business
in connection with actual or alleged failure to comply with any requirement of
any Environmental Law.
2.12 Customers and Sales. Schedule 2.12 to this Agreement is a
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correct and current list of all customers of Topaz together with summaries of
the sales made to each customer during the most recent fiscal year. Except as
indicated in Schedule 2.12, neither Topaz nor any of the Shareholders have any
information indicating that any of these customers intend to cease doing
business with Topaz or materially alter the amount of the business they are
presently doing with Topaz.
2.13 Insurance Policies. Schedule 2.13 to this Agreement is a
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description of all insurance policies held by Topaz concerning its businesses
and properties. All these policies are in the respective principal amounts set
forth in Schedule 2.13. Topaz has maintained and now maintains (i) insurance on
all its assets and business of a type customarily insured, covering property
damage and loss of income by fire or other casualty, and (ii) adequate insurance
protection against all liabilities, claims, and risks against which it is
customary to insure. Topaz is not in default with respect to payment of
premiums on any such policy. Except as set forth in Schedule 2.13, no claim is
pending under any such policy.
2.14 Contracts. Topaz is not a party to, nor is its property bound
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by, any material contract, agreement, lease or commitment, including any
(whether written or oral) distributor's or manufacturer's representative or
agency agreement; any output or requirements agreement; any agreement not
entered into in the ordinary course of business; any indenture, mortgage, deed
of trust; or any agreement that is unusual in nature, duration, or amount
(including any agreement requiring the performance by Topaz of any obligation
for more than one year after the Closing Date or calling for consideration of
more than $25,000); except the agreements listed in Schedule 2.14, copies of
which have been furnished or made available to CalComp. There is no default or
event that, with notice, lapse of time, or both, would constitute a default by
any party to any of these agreements. Topaz has not received notice that any
party to any of these agreements intends to cancel or terminate any of these
agreements or to exercise or not exercise any options under any of these
agreements. Topaz is not a party to, nor is it or its property bound by, any
agreement that is materially adverse to the businesses, properties, or financial
condition of Topaz.
2.15 Compliance With Laws. Topaz has not received notice of any
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violation of any applicable federal, state, or local statute, law, or
regulation, and it represents that:
(a) Topaz has complied in all material respects with all federal,
state, and local environmental protection laws and regulations and has not been
cited for any violation of any such law or regulation. To the best knowledge of
Topaz and the Shareholders, no material capital expenditures will be required
for compliance by Topaz with any applicable
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federal, state, or local laws or regulations now in force relating to the
protection of the environment. There is no pending audit by any federal, state
or local governmental authority with respect to groundwater, soil, or air
monitoring; the storage, burial, release, transportation, or disposal of
hazardous substances; or the use of underground storage tanks by Topaz. Topaz
has no agreement with any third party or federal, state, or local governmental
authority relating to any such environmental matter or cleanup.
(b) Topaz has complied in all material respects with all
requirements of the Occupational Safety and Health Act and its California
equivalents and regulations promulgated under any such legislation, the
consequences of a violation of which could have a material adverse effect on its
operations, and with all orders, judgments, and decrees of any tribunal under
such legislation that apply to their business or properties.
(c) Topaz is not in violation of any provision of the Export
Administration Act of 1979 or the Foreign Corrupt Practices Act of 1977.
(d) Topaz has not directly or indirectly paid or delivered any
fee, commission, or other money or property, however characterized, to any
finder, agent, government official, or other party, in the United States or any
other country, that is in any manner related to the business or operations of
Topaz, and that any of the Shareholders or Topaz, knows or has reason to believe
to have been illegal under any federal, state, or local law of the United States
or any other country having jurisdiction. Topaz has not participated, directly
or indirectly, in any boycott or other similar practice affecting any of its
actual or potential customers. Topaz has at all times done business in an open
and ethical manner.
(e) Topaz has complied in all material respects with, and
neither is in any material respect in violation of, any other applicable
federal, state, or local statute, law, or regulation (including any applicable
building, zoning, environmental protection, or other law, ordinance, or
regulation) affecting its properties or the operation of its businesses.
2.16 Litigation. Except as set forth in Schedule 2.16, there is no
----------
pending, or, to the best knowledge of Shareholders and Topaz, threatened, suit,
action, arbitration, or legal, administrative, or other proceeding, or
governmental investigation against or affecting Topaz, or any of its business,
assets, or financial condition. To the best knowledge of Topaz and the
Shareholders, the matters set forth in Schedule 2.16, if decided adversely to
Topaz, will not result in a material adverse change in the business, assets, or
financial condition of Topaz. Topaz has furnished or made available to CalComp
copies of all relevant court papers and other documents relating to the matters
set forth in Schedule 2.16. Topaz is not in default with respect to any order,
writ, injunction, or decree of any federal, state, local, or foreign court,
department, agency, or instrumentality. Except as set forth in Schedule 2.16,
neither Topaz nor any of the Shareholders are presently engaged in any legal
action to recover money due to any of them or damages sustained by any of them.
12
2.17 Interest in Customers, Suppliers, and Competitors. Except as
-------------------------------------------------
set forth in Schedule 2.17, none of the Shareholders nor any officer, director,
or employee of Topaz, nor any spouse or child of any of them has any direct or
indirect interest in any competitor, supplier, or customer of Topaz or in any
person from whom or to whom Topaz leases any real or personal property, or in
any other person with whom Topaz is doing business. The foregoing provisions
shall not be construed to prohibit the ownership by any Shareholder of up to one
percent (1%) of any class of securities of any corporation, which class is
registered pursuant to the Securities Exchange Act of 1934, as amended.
2.18 Corporate Documents. Topaz has furnished to CalComp for its
-------------------
examination complete and correct:
(a) copies of the articles of incorporation and bylaws of Topaz;
(b) the minute books of Topaz containing all records required to
be set forth of all proceedings, consents, actions, and meetings of the
shareholders and board of directors of Topaz;
(c) all permits, orders, and consents issued by the California
Commissioner of Corporations with respect to Topaz, or any security of Topaz,
and all applications for such permits, orders, and consents; and
(d) the stock transfer books of Topaz setting forth all transfers
of any capital stock.
2.19 Personnel.
---------
(a) Identification and Compensation. Schedule 2.19 is a list of
-------------------------------
the names and addresses of all officers, directors, employees, agents, and
manufacturer's representatives of Topaz, stating the rates of compensation
payable to each. Schedule 2.19 sets forth a list of all of the names, home
addresses, and telephone numbers of each of the officers and directors.
(b) Employment Contracts. Schedule 2.19 sets forth a list of all
--------------------
employment contracts and collective bargaining agreements, and all pension,
bonus, profit-sharing, stock option, or other agreements or arrangements
providing for employee remuneration or benefits to which Topaz is a party or by
which Topaz is bound. All these contracts and arrangements are in full force
and effect, and neither Topaz nor any other party is in default under them.
There have been no claims of defaults and, to the best knowledge of Topaz and
the Shareholders, there are no facts or conditions that if continued, or on
notice, will result in a default under these contracts or arrangements. There
is no pending or, to the best knowledge of Topaz and the Shareholders,
threatened labor dispute, strike, or work stoppage affecting Topaz's business.
Topaz has complied in all material aspects with all applicable laws for each of
their respective employee benefit plans, including the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA) if and to the extent
applicable. There are no threatened
13
or pending claims by or on behalf of any such benefit plan, by or on behalf of
any employee covered under any such plan, or otherwise involving any such
benefit plan, that allege a breach of fiduciary duties or violation of other
applicable state or federal law; nor is there, to the knowledge of Topaz and the
Shareholders, any basis for such a claim. Except as set forth in Schedule 2.19,
Topaz has not entered into any severance or similar arrangement with any present
or former employee that will result in any obligation, absolute or contingent,
of CalComp or Topaz, to make any payment to any present or former employee
following termination of employment.
(c) Persons With Certain Authority. Schedule 2.19 lists (i) the
------------------------------
names and addresses of all persons holding a power of attorney on behalf of
Topaz and (ii) the names and addresses of all banks or other financial
institutions in which Topaz has an account, deposit, or safe deposit box, with
the names of all persons authorized to draw on these accounts or deposits or to
have access to these boxes.
2.20 Products. There are no known defects in the design or technology
--------
embodied in any Topaz product currently marketed or proposed to be marketed by
Topaz which impair or are likely to impair in a material manner the intended use
of the product.
2.21 Full Disclosure. None of the representations and warranties made
---------------
by the Shareholders or Topaz, or made in any certificate or memorandum furnished
or to be furnished by any of them or on their behalf, contains any untrue
statement of a material fact, or omits to state any material fact necessary to
make the statements made not untrue or misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CALCOMP
CalComp represents and warrants to Topaz and to the Shareholders as
follows:
3.1 Organization and Qualification. CalComp is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as now being conducted and is duly qualified to do business and in good standing
as a foreign corporation in each jurisdiction where the nature of its activities
or where the character of its properties makes such qualification necessary and
in which the failure to so qualify would have a material adverse effect on
CalComp and its subsidiaries, taken as a whole.
3.2 Authority. CalComp has full corporate power and authority to
---------
execute and deliver this Agreement and to perform its obligations hereunder and
to consummate the transactions contemplated hereby and all corporate action
necessary for such execution, delivery and performance has been duly and validly
taken. This Agreement constitutes the legal, valid and binding obligation of
CalComp, enforceable in accordance with its terms against CalComp, subject, as
to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally and
to general equitable
14
principles. The execution and delivery of this Agreement by CalComp does not,
and the performance and consummation by CalComp of the transactions contemplated
by this Agreement will not, (i) conflict with or result in a breach or violation
of, or default under, or give rise to any right of acceleration or termination
of, any of the terms, conditions or provisions of any material note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which CalComp is a party or by which any of its assets or properties are bound;
(ii) violate any judgment, order, injunction, decree, statute, rule, or
regulation applicable to CalComp or any of its respective properties or assets;
or (iii) contravene, violate or be impermissible under the Certificate of
Incorporation or Bylaws of CalComp.
3.3 Capitalization.
--------------
(a) The authorized capital stock of CalComp consists of 5,000,000
shares of Preferred Stock, with a par value of $.01 per share, none of which is
outstanding, and 60,000,000 shares of Common Stock, with a par value of $.01 per
share ("CalComp Common Stock"), of which 45,398,650 shares were issued and
outstanding at September 30, 1996. At September 30, 1996, there were no
outstanding options, warrants or other rights to subscribe for or purchase from
CalComp any capital stock of CalComp or securities convertible into or
exchangeable for CalComp Common Stock, except options or other rights to
purchase or acquire not to exceed 1,600,000 shares of CalComp Common Stock under
outstanding warrants or stock option, stock purchase and stock bonus plans.
(b) The outstanding CalComp Common Stock is, and the Merger
Shares to be issued in connection with this Agreement will be, duly and validly
authorized and issued, fully paid and non-assessable.
3.4 Disclosure. CalComp has delivered to Topaz and has delivered or
----------
made available to the Shareholders copies of the following statements and
reports of CalComp ("CalComp Reports") heretofore filed with the Securities and
Exchange Commission: Proxy Statement of Summagraphics Corporation dated June
24, 1996; Form 10-K Report for the fiscal year ended May 31, 1996; Form 10-Q
Quarterly Report for the three months ended September 29, 1996; and Form 8-K
Reports from June 30, 1996 to the date hereof. None of the CalComp Reports as
of their date of issuance contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made therein
not misleading.
3.5 Absence of Adverse Changes or Events. Since September 29, 1996,
------------------------------------
there have not been any changes in the business, assets, operations or financial
condition of CalComp or its subsidiaries which in the aggregate materially
adversely affect the business, assets, operations, financial condition or
prospects of CalComp and its subsidiaries, taken as a whole.
15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TOPAZ SHAREHOLDERS
Each Shareholder, severally, but not jointly, represents and warrants
to CalComp and Sub as follows:
4.1 Title to Shares. Such Shareholder is the owner of the shares of
---------------
Topaz common stock indicated below, which shares constitute all of the issued
and outstanding capital stock of Topaz. No other person or entity has any
right, title, or interest, beneficially or of record, in or to the shares of
Topaz common stock owned by such Shareholder and such shares are free and clear
of any claims, liens, encumbrances, security agreements, equities, options,
charges, or restrictions, and can be delivered and surrendered to CalComp
pursuant hereto without obtaining the consent or approval of any other person or
governmental authority.
Shareholder Number of Shares
----------- ----------------
Andreas Bibl 33,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 33,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 33,000
4.2 Investment Representation. It is understood that the Merger
-------------------------
Shares to be delivered by CalComp pursuant to Section 1.2(a) hereof will be
issued by CalComp without registration or qualification or other filings being
made under the Securities Act of 1933 (the "1933 Act"), or the securities or
"Blue Sky" laws of any state, in reliance upon specific exemptions therefrom.
Each Shareholder further agrees that an appropriate legend to the following
effect shall be placed on the face of each certificate representing Merger
Shares (and that appropriate stop transfer instructions shall be issued to
CalComp's transfer agent by CalComp):
These securities have not been registered under the Securities Act of
1933 (the "1933 Act"). An offer to sell or transfer or the sale or
transfer of these securities or any interest therein is unlawful unless
made pursuant to an effective registration statement under the 1933 Act or
unless an exemption from registration under the 1933 Act is available.
4.3 Approval. The Shareholders have, by resolutions duly adopted,
--------
unanimously approved this Agreement and the Agreement of Merger and consented to
their treatment thereunder with respect to the distributions of securities.
Such approval and consent were effective without obtaining the approval or
consent of any other person.
4.4 Investment Intent. Such Shareholder is acquiring the Merger
-----------------
Shares for his own account and not with a view to or for sale in connection with
any distribution of such shares.
16
4.5 Financial Sophistication; Illiquidity of Merger Shares. Such
------------------------------------------------------
Shareholder is a financially sophisticated investor, has such knowledge and
experience in financial and business matters that he is capable of independently
evaluating the investment risk of the Merger and of ownership of shares of
CalComp Common Stock, and is capable of bearing the risks thereof. Furthermore,
such Shareholder understands that these shares will not be registered under the
1933 Act and, in addition to the restrictions set forth in Section 6.4, may not
be publicly traded without registration under the 1933 Act, unless (i) the
requirements of Rule 144 under the 1933 Act are met, or (ii) an exemption from
registration under the 1933 Act is available and CalComp receives an opinion of
counsel satisfactory to CalComp that such registration is not required.
4.6 CalComp Information. Such Shareholder has relied only on the
-------------------
representations and warranties and written information provided to such
Shareholder by CalComp pursuant to Article III above in connection with such
Shareholder's decision to acquire ownership of the Merger Shares hereunder,
understands the risks of an investment in CalComp and has been represented by
and consulted his own attorney, business advisor and/or tax advisor as to the
legal, business, tax and related risks and matters concerning an investment in
CalComp.
4.7 Authority. The consummation of the transactions contemplated by
---------
this Agreement and fulfillment of the terms hereof will not breach any of the
terms and provisions of, or constitute a default by any Shareholder under, any
agreement or instrument to which he is a party or by which he is bound, or any
statute, ruling, decree, judgment, order or regulation of any governmental
authority having jurisdiction over such Shareholder or his property; and no
consent, approval, authorization or order of any court or governmental agency or
body is required for the consummation by such Shareholder of the transactions on
his part contemplated hereby.
4.8 Residence. Such Shareholder's principal residence is in the
---------
state shown below:
Shareholder State of Residence
----------- ------------------
Andreas Bibl California
▇▇▇▇▇ ▇▇▇▇▇▇▇ California
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ California
17
ARTICLE V
SHAREHOLDER COVENANTS
5.1 Covenant Not to Compete.
-----------------------
(a) Each Shareholder agrees that he will not, at any time within
the five-year period immediately following the Closing Date, directly or
indirectly engage in, or have any interest in any person, firm, corporation, or
business (whether as an employee, officer, director, agent, security holder,
creditor, consultant, or otherwise) that engages in any activity in any of the
counties of Alameda, Marin, San Francisco, Santa ▇▇▇▇▇, Los Angeles, Orange, San
Bernardino, Riverside, Ventura, or San Diego, California, in any of the states
or territories of the United States of America, or in any country throughout the
world, which activity is the same as, similar to, or competitive with any
activity now engaged in by CalComp (or any successors). Notwithstanding the
foregoing, if a Shareholder's employment with CalComp is terminated by CalComp
without Cause (as defined in the Employment Agreement attached hereto as Exhibit
C) during the fourth year of the aforementioned five-year period, this covenant
shall expire one year after the date of such termination.
(b) The parties intend that the covenant contained in Section
5.1(a) shall be construed as a series of separate covenants, one for each county
in California, for each state of the United States and for each country
specified. Except for geographic coverage, each such separate covenant shall be
deemed identical in terms to the covenant contained in Section 5.1(a). If, in
any judicial proceeding, a court shall refuse to enforce any of the separate
covenants deemed included in this paragraph, then this unenforceable covenant
shall be deemed eliminated from these provisions for the purpose of those
proceedings to the extent necessary to permit the remaining separate covenants
to be enforced.
5.2 Proprietary Information. Each Shareholder agrees not to divulge,
-----------------------
communicate, use to the detriment of CalComp or for the benefit of any other
person or persons, or misuse in any way, any confidential information or trade
secrets of CalComp, including personnel information, secret processes, know-how,
customer lists, recipes, formulas, or other technical data ("Proprietary
Information"). Each Shareholder acknowledges and agrees that any information or
data it has acquired with respect to any of the Proprietary Information was
received in confidence and as a fiduciary of CalComp. In addition, each
Shareholder agrees to execute at the Closing the employee Proprietary Data and
Trade Secrets Agreement in the form attached hereto as Exhibit D. The
obligations of the Shareholders under the Proprietary Data and Trade Secrets
Agreement shall be independent from their obligations hereunder.
5.3 Specific Performance. The parties to this Agreement agree that
--------------------
the disclosure of Proprietary Information or its use in competition with CalComp
would irreparably damage CalComp in such a way that it could not reasonably be
compensated in damages in an action at law. Each of the parties hereto has
entered into this Agreement in substantial reliance upon the strict enforcement
of the covenants and conditions of this Article V, and they acknowledge and
agree that because of the facts noted above, among others, the parties hereto
will be irreparably damaged in the event this Article is not enforced by
injunction and decree
18
of specific performance. Accordingly, the parties hereto agree that this
Article V shall be enforceable by decree of specific performance and an
injunction may be issued restraining any activity by the Shareholders in
contravention of this Article V. The aforementioned remedies, however, shall be
cumulative and nonexclusive, and shall be in addition to any other legal or
equitable remedy or remedies which the parties may have.
ARTICLE VI
OTHER AGREEMENTS
6.1 ▇▇▇▇▇ Agreement. The Assignment and Termination Agreement
---------------
between Topaz and ▇▇▇▇▇ Ltd. attached hereto as Exhibit E is the only agreement
or commitment between or involving Topaz, ▇▇▇▇▇ and any of their respective
affiliates.
6.2 Employment Agreements. Concurrently herewith, each of the
---------------------
Shareholders and CalComp will enter into Employment Agreements in the form of
Exhibit C hereto.
6.3 Stock Option Grants. Concurrently herewith, each of the Topaz
-------------------
employees identified on Exhibit F hereto will be offered employment by CalComp
under CalComp's standard terms and conditions of employment, and in connection
therewith will be granted stock options covering an aggregate of 250,000 shares
of CalComp Common Stock under CalComp's 1996 Stock Option Plan for Key Employees
in the individual amounts set forth on Exhibit F and subject to the terms of
Stock Option Agreements to be entered into between CalComp and each of such
employees.
6.4 Restriction on Transfer of Merger Shares. For a period of two
----------------------------------------
years following the date hereof, each Shareholder agrees not to transfer,
assign, encumber or otherwise dispose of any of the Merger Shares, except to
Permitted Transferees (as defined below); provided, however, that any Permitted
Transferee shall receive and hold such shares subject in all respects to the
provisions of this Agreement, and that there shall be no further transfer of
such shares except in accordance herewith. For purposes of this Agreement,
"Permitted Transferee" includes a transferring shareholder's spouse, children,
parents, or a custodian, trustee or other fiduciary for the account of the
transferring shareholder or members of his family in connection with a bona fide
---- ----
estate planning transaction. Each Shareholder further agrees that an
appropriate legend to the following effect shall be placed on the face of each
certificate representing Merger Shares:
The securities represented by this certificate may be transferred
only in accordance with the terms of an agreement between the Company
and the Shareholder, a copy of which is on file with the Secretary of
the Company.
6.5 Compensation and Benefits to Topaz Employees. CalComp covenants
--------------------------------------------
that compensation (including stock options and similar grants) to Topaz
employees after the Closing will be determined on a basis comparable to such
compensation afforded to CalComp employees
19
at comparable levels, it being understood that this provision in no way
restricts CalComp's discretion in determining the employment status of any
particular Topaz employee. For purposes of participation in CalComp's employee
benefit programs, CalComp will, to the extent permitted by the plans and
applicable law, include the term of employment of Topaz's employees in
determining eligibility for and levels of benefits.
6.6 Discontinuation of Technology. In the event CalComp voluntarily
-----------------------------
elects within three years from the Closing Date to discontinue use or
development of piezoelectric ink jet technology, CalComp agrees to grant the
following right to the Shareholders who have continuously remained in the employ
of CalComp (or any of its subsidiaries) from the date of this Agreement until
the date of such discontinuation: CalComp will use reasonable efforts to
negotiate, for a period not to exceed 60 days from the date CalComp's Board of
Directors formally determines to discontinue such technology, in good faith with
such remaining Shareholders for the purchase of the assets and liabilities
relating to the piezoelectric ink jet technology developed by Topaz and the
resulting product line as may then be part of the discontinued business. In
addition, if a buyer for such business is located and the general terms of the
sale have been agreed upon within 6 months following the discontinuation, the
remaining Shareholders will have a right to acquire such business on the same
general terms and conditions. Such right of first refusal will remain valid for
ten (10) days from the date notice is given to such remaining Shareholders of
their right to match the offer, complete with a copy of the offer. At all times
the right of the remaining Shareholders is subject to CalComp's right to change
its determination to discontinue or to otherwise change in whatever manner it
determines in its sole discretion the use or direction of the technology, and
further that the Shareholders will have no rights of first refusal concerning a
sale of the discontinued technology to a third party unless such discontinued
technology constitutes all or substantially all of the assets to be sold in such
sale.
ARTICLE VII
CLOSING
7.1 Closing. The closing ("Closing") of the transactions
-------
contemplated by this Agreement shall take place on the Effective Date
simultaneously with the signing of this Agreement at the offices of CalComp at
▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the
parties may agree.
7.2 Deliveries by CalComp. At the Closing, CalComp shall deliver the
---------------------
following to the Shareholders:
(a) Duly issued and executed share certificates representing the
Merger Shares to be issued to the Shareholders pursuant to Section.1.2(a);
(b) Cash or checks made payable to the Shareholders for the
amounts such Shareholders are entitled to receive pursuant to Section 1.2(a);
20
(c) A copy or copies of resolutions (certified as of the date
of the Agreement as being in full force and effect by an appropriate officer of
CalComp and Sub) duly adopted by CalComp's and Sub's Boards of Directors
approving, and authorizing and directing the execution of this Agreement and
authorizing and directing issuance of the Merger Shares to the Shareholders; and
(d) The Employment Agreements referred to in Section 6.2.
7.3 Deliveries by Topaz and the Shareholders. At the Closing, Topaz
----------------------------------------
and the Shareholders shall deliver the following to CalComp and, except as
indicated, to Sub:
(a) A copy or copies of resolutions (certified as of the date
of the Agreement as being in full force and effect by an appropriate officer of
Topaz) duly adopted by both Topaz's Board of Directors and its shareholders
approving, authorizing and directing the execution of this Agreement and the
Agreement of Merger;
(b) A certificate of the Secretary of State of California to the
effect that Topaz is a validly existing corporation in good standing under the
laws of the state of California, and a certificate of the California Franchise
Tax Board to the effect that Topaz has paid all franchise and other state taxes
due and payable as of the date of this Agreement. Such certificates will not be
dated earlier than twenty (20) days prior to the Closing;
(c) The Topaz share certificates pursuant to Section 1.2(d)
above;
(d) The Proprietary Data and Trade Secrets Agreement referred to
in Section 5.2;
(e) Certain investment representation letters covering the
Shareholders' purchase of the CalComp Common Stock hereunder;
(f) Such other closing documents and certificates as may be
required by CalComp.
ARTICLE VIII
INDEMNIFICATION PROVISIONS
8.1 Shareholders' Indemnity.
-----------------------
(a) Basic Indemnity Provision. For two (2) years following the
-------------------------
Closing Date, the Shareholders, and each of them, will jointly and severally
indemnify, defend, and hold harmless CalComp against and in respect of claims,
demands, losses, costs, expenses, obligations, liabilities, damages, recoveries,
and deficiencies, including interest, penalties, and reasonable attorneys' fees,
that it may incur or suffer, which arise, result from or relate to any
21
breach or breaches of the representations and warranties by Topaz and the
Shareholders under Article II (including the Disclosure Schedule) of this
Agreement.
(b) Liability Collars. Each Shareholder's liability under Section
-----------------
8.1(a) will not, however, exceed the aggregate amount of such Shareholder's
then-existing holdings of the Merger Shares plus the value of any Merger Shares
disposed of, all as more completely specified in Section 8.1(c) below, it being
understood that no liability collars will exist for a Shareholder's breach of
such Shareholder's representations and warranties in Article IV or for a breach
by any Shareholder of the covenants and agreements set forth in Articles V and
VI. Despite any other provision of this Agreement, the Shareholders will not be
liable to CalComp on any warranty, representation, or covenant made in this
Agreement, or under any of their indemnities in this Agreement, regarding any
single claim, loss, expense, obligation, or other liability that does not exceed
$25,000; provided, however, that when the aggregate amount of all such claims,
losses, expenses, obligations and liabilities not exceeding $25,000 each reaches
$100,000, the Shareholders will, subject to the above limitation on their
maximum aggregate liability, thereafter be liable in full for all breaches and
indemnities and regarding all those claims, losses, expenses, obligations, and
liabilities.
(c) Escrow. To secure the Shareholders' obligations under Section
------
8.1(a), at the Closing, the Shareholders shall deliver the Merger Shares into an
escrow account ("Escrow") with a financial institution acceptable to CalComp and
the Shareholders. The Escrow will serve as a fund for the indemnity obligations
set forth in Section 8.1(a) and will be governed by an Indemnity and Escrow
Agreement substantially in the form of Exhibit G attached hereto. In the event
any or all of the actions described in Section 8.1(a) have not been finally
resolved, whether by settlement or adjudication, by the date two years from the
date hereof, CalComp may file a "Notice of Claim" (as defined in the Indemnity
and Escrow Agreement) with respect thereto, and the escrow agent shall retain a
number of the Merger Shares, having a value equal to the amount of such claims,
as determined by CalComp (plus any additional shares necessary to cover other
claims), until all such claims are resolved in accordance with the Indemnity and
Escrow Agreement.
(d) Deduction for CalComp's Collateral Sources. In computing the
------------------------------------------
amount to be paid by the Shareholders under their indemnity obligations, there
will be deducted an amount, prior to payment, equal to any tax benefits,
insurance proceeds or other recoveries actually received by or for the benefit
of CalComp, taking into account all of the income tax consequences of the
collateral sources.
(e) Shareholders' Right to Defend. CalComp will promptly notify the
-----------------------------
Shareholders of the existence of any claim, demand, or other matter to which the
Shareholders' indemnification obligations would apply and will give them a
reasonable opportunity to defend the same at their own expense and with counsel
of their own selection; provided that CalComp will at all times also have the
right to participate fully in the defense at its own expense. If the
Shareholders, within a reasonable time after this notice, fail to defend,
CalComp will have the right, but not the obligation, to undertake the defense
of, and to compromise or settle (exercising reasonable business judgment), the
claim or other matter on behalf, for the account, and at the
22
risk, of the Shareholders. If the claim is one that cannot by its nature be
defended solely by the Shareholders (including any federal or state tax
proceeding), CalComp will make available (and cause Topaz to make available) all
information and assistance that the Shareholders may reasonably request.
8.2 CalComp Indemnity. CalComp will indemnify and hold harmless the
-----------------
Shareholders against, and in respect of, claims, losses, expenses, costs,
obligations, and liabilities they may incur by reason of CalComp's breach of or
failure to perform any of its warranties, commitments, or covenants in this
Agreement, or by reason of any act or omission of CalComp, or any of its
successors or assigns, after the Closing Date, that constitutes a breach or
default under, or a failure to perform, any obligation, duty, or liability of
any of the Shareholders under any loan agreement, lease, contract, order, or
other agreement to which it is a party or by which it is bound at the Closing
Date, but only to the extent to which CalComp expressly assumes these
obligations, duties, and liabilities under this Agreement.
ARTICLE IX
GENERAL PROVISIONS
9.1 Publicity. All notices to third parties and all other publicity
---------
concerning the Closing of this Agreement only will be jointly planned and
coordinated by and between CalComp and Topaz prior to the Closing. No party
will act unilaterally in this regard without the prior written approval of the
others unless required by the SEC or other governmental or judicial body;
however, this approval will not be unreasonably withheld.
9.2 Costs.
-----
(a) Finder's or Broker's Fees. Each party represents and
-------------------------
warrants that it has dealt with no broker or finder in connection with any
transaction contemplated by this Agreement, and no broker or other person is
entitled to any commission or finder's fee in connection with any of these
transactions.
(b) Expenses. Each party will pay all costs and expenses
--------
incurred or to be incurred by it in negotiating and preparing this Agreement
and in closing and carrying out the transactions contemplated by this Agreement.
This clause does not prohibit the legal and other professional fees for the
Shareholders not to exceed $50,000 from being borne by Topaz.
9.3 Form of Agreement.
-----------------
(a) Effect of Headings. The subject headings of the paragraphs
------------------
and subparagraphs of this Agreement are included for convenience only and will
not affect the construction or interpretation of any of its provisions.
23
(b) Word Usage. Unless the contest clearly requires otherwise:
----------
(i) Plural and singular numbers will each be considered to
include the other;
(ii) The masculine, feminine, and neuter gender will each be
considered to include the others;
(iii) "Shall," "will," "must," "agree," and "covenants" are
each mandatory;
(iv) "May" is permissive;
(v) "Or" is not exclusive; and
(vi) "Includes" and "including" are not limiting.
(c) Entire Agreement; Modification; Waiver. This Agreement
--------------------------------------
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations, and understand ings of the parties. No supplement,
modification, or amendment of this Agreement will be binding unless executed in
writing by all the parties. No waiver of any of the provisions of this
Agreement will constitute a waiver of any other provision, whether or not
similar, nor will any waiver constitute a continuing waiver. No waiver will be
binding unless executed in writing by the party making the waiver.
(d) Counterparts. This Agreement may be executed simultaneously
------------
in one or more counterparts, each of which will be considered an original, but
all of which together will constitute one and the same instrument.
9.4 Remedies.
--------
(a) Mediation. Any controversy or claim arising out of, or
---------
relating to, this Agreement, or the making, performance, or interpretation of
it, will first be subject to mediation in California before a mediator mutually
selected by the parties to the dispute. In the event that mediation does not
resolve the dispute within a reasonable time after the dispute, then the dispute
will be filed and litigated in the court having subject matter jurisdiction of
the controversy which is located in the forum of the defendant's residence or
place of business.
(b) Specific Performance. Each party's obligation under this
--------------------
Agreement is unique. If any party should default in its obligations under this
Agreement, all parties acknowledge that it would be extremely impracticable to
measure the resulting damages; accordingly, the non-defaulting party or parties,
in addition to any other available rights or remedies, may ▇▇▇ in equity for
specific performance, and the parties each expressly waive the defense that a
remedy in damages will be adequate.
24
(c) Recovery of Litigation Costs. In the event that an action is
----------------------------
brought to enforce the rights of any party to this Agreement, except as
otherwise provided for herein, each party agrees to bear its own costs and legal
fees and further agrees that it will not seek reimbursement for the costs and
fees incurred by it from any other party.
9.5 Nature and Survival of Warranties. Except as specifically
---------------------------------
limited in Article VIII with respect to a breach by the Shareholders of the
representations and warranties under Article II, the representations,
warranties, and indemnities made by the parties in this Agreement or in
instruments, certificates, opinions, or other writings provided for in the
agreement will be continuing, but will expire on the third (3rd) anniversary
date following the Closing Date, unless a specific claim in writing with respect
to these matters has been made, or an action at law or in equity has been
commenced or filed, before that date. Nothing in this paragraph will affect the
obligations and indemnities of the parties with respect to covenants and
agreements contained in this Agreement that are permitted to be performed, in
whole or in part, after the Closing Date.
9.6 Notices. All notices, request, demands, and other communications
-------
under this Agreement must be in writing and will be considered to have been duly
given when received in writing by the party to whom notice is to be given.
Notice may be served personally on the party to whom notice is to be given, or
may otherwise be deemed given five (5) days after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered or certified,
postage prepaid, and properly addressed as follows:
To the Shareholders:
c/o Topaz Technologies, Inc.
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
To CalComp at:
Corporate Secretary
CalComp Technology, Inc.
▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇, ▇/▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its address for purposes of this paragraph by giving the
other parties written notice of the new address in the manner set forth above.
9.7 Governing Law. This Agreement will be construed in accordance
-------------
with, and governed by, the laws of the State of California as applied to
contracts that are executed and performed entirely in California.
25
9.8 Severability. If any provision of this Agreement is held invalid
------------
or unenforceable by any court of final jurisdiction, it is the intent of the
parties that all other provisions of this Agreement be construed to remain fully
valid, enforceable, and binding on the parties.
9.9 Signatures.
----------
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it on the day and year first above written.
"CALCOMP"
CALCOMP TECHNOLOGY, INC., a Delaware corporation
By:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇
President
"SUB"
CALCOMP ACQUISITION SUB, INC., a California
corporation
By:
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇
President
"TOPAZ"
TOPAZ TECHNOLOGIES, INC., a California corporation
By:
------------------------------------
Andreas Bibl
President
26
"SHAREHOLDERS"
---------------------------------------
Andreas Bibl
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
27
EXHIBIT A
AGREEMENT OF MERGER
28
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER is made and entered into as of November 18,
1996, by and between CALCOMP ACQUISITION SUB, INC., a California corporation
("Merging Corporation"), and TOPAZ TECHNOLOGIES, INC., a California corporation
("Surviving Corporation").
R E C I T A L S
- - - - - - - -
A. Merging Corporation is a recently formed California corporation.
B. CalComp Technology, Inc., a Delaware corporation ("CalComp"), is
the owner of all of the issued and outstanding shares of the Common Stock of
Merging Corporation.
C. Merging Corporation and Surviving Corporation and their
respective Boards of Directors have approved as desirable and in their best
interests that Merging Corporation be merged with and into Surviving Corporation
by a statutory merger upon the terms and conditions set forth herein.
AGREEMENT
---------
NOW, THEREFORE, Merging Corporation and Surviving Corporation agree as
follows:
1. Merger. Merging Corporation shall be merged with and into
------
Surviving Corporation by a statutory merger in accordance with the General
Corporation Law of the State of California (the "GCL"). At the Effective Time
of the Merger (as defined below), the separate existence of Merging Corporation
shall cease and Surviving Corporation shall be the surviving corporation.
2. Effective Time of the Merger. The merger shall be effective (the
----------------------------
"Effective Time of the Merger") when this Agreement of Merger and appropriate
certificates of its approval and adoption shall have been filed in the office of
the California Secretary of State in accordance with Section 1103 of the GCL.
3. Effect of Merger on Outstanding Shares.
--------------------------------------
(a) Each share of Surviving Corporation common stock issued and
outstanding immediately prior to the Merger and all rights existing with respect
thereto shall, by virtue of the Merger and without any action on the part of the
holders thereof, cease to be outstanding and shall be converted into the right
to receive cash and shares of CalComp Common Stock as set forth below:
A-1
Shares of CalComp
Name of Topaz Shares of Topaz Cash Received Common Stock
Shareholder Common Stock Owned in Merger Received in Merger
----------------- ------------------ ------------- ------------------
Andreas Bibl 33,000 $250,000 500,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 33,000 $250,000 500,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 33,000 $250,000 500,000
(b) The shares of capital stock of CalComp outstanding immediately
prior to the Merger will not be affected by the Merger;
(c) The shares of capital stock of Merging Corporation shall be
converted into and become one fully paid and nonassessable share of Common Stock
of Surviving Corporation.
4. Surrender of Share Certificates. After the Effective Time of the
-------------------------------
Merger, each holder of an outstanding certificate evidencing common shares of
Surviving Corporation shall surrender the same, duly endorsed as CalComp may
require, to CalComp or its agent for cancellation. Thereupon such holder shall
receive in exchange therefor a certificate or certificates reprewenting the
number of full common shares of CalComp to which such holder shall be entitled
as provided herein and shall also be entitled to receive, in cash or check, the
amount to which such holder is entitled as provided herein.
5. Articles of Incorporation. The articles of incorporation of the
-------------------------
Surviving Corporation, as amended to the date of the filing of this certificate,
including amendments set forth herein but not separately filed (and with the
omissions required by Section 910 of the California Corporations Code) are
restated as set forth in Attachment 1.
6. Other Provisions.
----------------
(a) Governing Law. This Agreement of Merger shall be governed by
-------------
the laws of California.
(b) Entire Agreement. This Agreement and the Agreement and Plan
----------------
or Reorganization of even date herewith between the parties hereto, CalComp,
Andreas Bibl, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ contain the entire agreement of
the parties hereto, and supersede any prior written or oral agreements between
them concerning the subject matter contained herein.
(c) Counterparts. This Agreement of Merger may be executed in
------------
any number of counterparts and each such counterpart shall be deemed to be an
original instrument, but all of such counterparts together shall constitute but
one agreement.
A-2
IN WITNESS WHEREOF, Merging Corporation and Surviving Corporation have
caused this Agreement of Merger to be executed as of the day and year first
above written.
CALCOMP ACQUISITION SUB, INC., a California
corporation
By:
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇
President
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Assistant Secretary
TOPAZ TECHNOLOGIES, INC., a California corporation
By:
--------------------------------------
Andreas Bibl
President
By:
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Secretary
A-3
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. certify that:
1. They are the President and Secretary, respectively, of CalComp
Acquisition Sub., Inc., a California corporation.
2. The Agreement of Merger in the form attached was duly approved by
the board of directors and shareholder of the corporation.
3. The shareholder approval was by the holder of 100% of the
outstanding shares of the corporation.
4. There is only one class of shares and the number of shares
outstanding is 100.
We further declare under penalty of perjury under the laws of the
State of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Date: November 18, 1996
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇, President
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Secretary
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Andreas Bibl and ▇▇▇▇▇ ▇▇▇▇▇▇▇ certify that:
1. They are the President and Secretary, respectively, of Topaz
Technologies, Inc., a California corporation.
2. The Agreement of Merger in the form attached was duly approved by
the board of directors and shareholders of the corporation.
3. The shareholder approval was by the holders of 100% of the
outstanding shares of the corporation.
4. There is only one class of shares and the number of shares
outstanding is 99,000.
We further declare under penalty of perjury under the laws of the
State of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Date: November 18, 1996
---------------------------------
Andreas Bibl, President
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary
ATTACHMENT 1
RESTATED ARTICLES OF INCORPORATION
OF
TOPAZ TECHNOLOGIES, INC.
The articles of incorporation of the Topaz Technologies, Inc., as
amended to the date of the filing of this certificate, including amendments set
forth herein but not separately filed (and with the omissions required by
Section 910 of the California Corporations Code) are restated as follows:
I
The name of the corporation is Topaz Technologies, Inc.
II
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
III
The corporation is authorized to issue only one class of shares of
stock to be designated "Common Stock"; and the total number of shares which this
corporation is authorized to issue is One Thousand (1,000).
IV
The liability of the directors of the Corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
V
The Corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the Corporations Code) for breach of duty to the
Corporation and its stockholders through Bylaw provisions or through agreements
with the agents, or otherwise, in excess of the indemnification otherwise
permitted by Section 317 of the Corporations Code, subject to the limits upon
such excess indemnification set forth in Section 204 of the Corporations Code.
EXHIBIT B
TOPAZ DISCLOSURE SCHEDULE
[COPY TO COME]
36
[COPY TO COME]
37
[COPY TO COME]
38
[COPY TO COME]
39
EXHIBIT C
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of the 18th day of
November, 1996, by and between CalComp Technology, Inc., a Delaware corporation
("Company"), and ("Employee").
----------------
R E C I T A L S
- - - - - - - -
A. Company is engaged in the business of designing, manufacturing,
assembling, distributing, selling and servicing computer peripheral products,
including printers, plotters, and digitizers.
B. In order to achieve its corporate and business objectives,
Company needs experienced and knowledgeable employees.
C. Employee is experienced in, and knowledgeable concerning, one or
more aspects of the business of Company.
D. Company and Employee desire to agree upon the terms of Employee's
future employment with Company and, in addition thereto, to agree as to certain
benefits of said employment,
THEREFORE, Company and Employee hereby agree as follows:
1. Term. Subject to earlier termination of Employee's employment
----
pursuant to Section 6 hereof, Company and Employee agree that the term of
employment will commence November 18, 1996 and end October 31, 1999.
2. Duties. Employee shall perform such duties, compatible with
------
Employee's position, as the President of the Company may reasonably require.
Such duties may be changed from time to time by the President. The initial
duties assigned by the President shall be comparable to the Employee's former
duties with Topaz Technologies, Inc.
3. Extent of Services. Employee agrees to perform the services
------------------
described in Section 2 hereof to the best of his ability, and to the
satisfaction of the Board of Directors of the Company. Employee agrees to
devote substantially all of his time, attention and energies to the business of
the Company.
4. Employee Representations. Employee hereby represents and
------------------------
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Employee does not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Employee is a party or by which he is bound, (ii) Employee is
not a party to or bound by any employment agreement, non-compete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
C-1
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Employee, enforceable in accordance with its
terms.
5. Compensation and Benefits.
-------------------------
(a) As compensation for the services to be rendered by Employee
to the company as described in Section 2, during the term or any extensions
hereof, the Company shall pay to Employee a minimum annual salary of $__________
per year, payable in 26 equal installments paid once each two weeks, or
otherwise as may be in accordance with the Company's payroll policy. Employee
will be eligible for increases in compensation at the discretion of the Company.
In addition, Employee shall participate in any supplemental pension, retirement,
hospitalization, health plan, or other employee benefits which the Company may,
from time to time, make generally available to employees of the Company.
(b) Nothing contained herein shall in any manner modify, impair or
affect the future right of Employee to participate in any bonus or compensation
plan, or any retirement or profit sharing plan, any qualified or other stock
option plan or any other employee benefit plan of the Company.
(c) Employee shall be entitled to a vacation period each year of
three (3) weeks, during which time his compensation shall be paid in full.
(d) Employee shall be reimbursed in full for all reasonable
expenses incurred during the performance of those services relating to his
employment by the Company as described in Section 2 including, but without
limitation, expenses incurred in the promotion of the business of the Company by
entertainment, gifts, or otherwise, convention expenses, expenses incurred in
connection with sales meetings, seminars, courses, trade shows and similar
pursuits. The Company will reimburse Employee for all such expenses upon the
presentation by Employee, from time to time, of an itemized account of such
expenditures, together with supporting vouchers. It is understood and agreed to
be the parties hereto that the following expenses are not contemplated to be
within the scope of reimbursable expenses, and shall be born by the Employee:
personal travel expenses; home office expenses; personal telephone expenses and
any other expenses not deductible by the Company for Federal income tax
purposes.
(e) Employee shall be eligible to participate in the Company's
Management Incentive Compensation Plan or any successor plan. The Company
reserves the right to cancel, amend, or supplement the plan at any time, in its
sole discretion. Employee's bonus under the plan will depend on individual and
Company performance achievements against plan for the plan year. If the
employee and Company meet their respective plans, employee's participation will
be at a target of ____% of employee's base annual salary, to be paid during the
first quarter of the following year beginning in fiscal 1998.
C-2
6. Termination.
-----------
(a) Termination of Employment Without Cause. It is specifically
---------------------------------------
understood and agreed that the Company may elect to terminate Employee's
employment hereunder or not to extend this Agreement at will in its sole and
absolute discretion, for any reason whatsoever or for no reason. However, if
Employee's employment with the Company is terminated by the Company without
Cause (as defined below), the Company shall pay to Employee the base salary set
forth in Section 5(a) hereof for a period of one year following such termination
of employment at the times prescribed in Section 5(a) hereof as well as
Employee's pro rata share of any bonus earned to the date of termination. For
the purposes of this Agreement, "Cause" shall be defined as malfeasance,
misfeasance or negligence in the conduct of Employee's duties as described in
Section 2 hereof, as determined by the President of the Company.
(b) Termination of Employment on Account of Death of Employee. If
---------------------------------------------------------
Employee dies during the course of his employment, the Estate of the Employee
(or to such other recipient as Employee may properly designate in writing to
Company) will be paid the following sums of money:
(i) By CalComp, all compensation earned but unpaid at the
date of his death (including any such bonus as may be determined
appropriate by the Board of Directors); and
(ii) By the applicable insurance company (if any), any life
insurance proceeds pursuant to life insurance benefits available to
employee as a result of enrollment in any company-sponsored life insurance
benefit.
(c) Termination of Employment on Account of Disability. In the
--------------------------------------------------
event the Company terminates this Agreement if Employee becomes permanently and
totally disabled, the Company shall pay to Employee the sums of money applicable
under employee benefit plans. For purposes of this Agreement, permanent and
total disability shall be defined as the permanent inability to satisfactorily
perform Employee's regular full time duties as determined by the physician
primarily responsible for the medical treatment of Employee; provided, however,
that any disability which continues without interruption for six (6) consecutive
months shall be deemed total and permanent, unless in the written medical
opinion of the physician primarily responsible for the medical treatment of
Employee, Employee will be able to resume performing his regular full time
duties within a period of six (6) months from the date on which the period of
consecutive disability commenced.
7. Restrictive Covenants. Employee acknowledges that certain of the
---------------------
Company's products, processes, and services are proprietary in nature and have
been created, designed, built, manufactured, assembled, marketed, sold, and
operated through the use of customer lists, supplier lists, trade secrets,
methods of operation and other confidential information possessed by the Company
and disclosed in confidence to Employee (hereinafter "Trade Secrets"), which may
not be easily accessible to other persons in the trade. Employee
C-3
also acknowledges that he will have substantial and ongoing contact with the
Company's customers and suppliers and will thereby gain knowledge of customer
needs and preferences, sources of supply, methods of assembly and other valuable
information necessary for the success of the Company's business. Employee
therefore covenants and agrees (all of which covenants and agreements shall
survive termination of this Agreement regardless of the reason therefore) as
follows:
(a) Employee agrees that he will at no time during the term of
this Agreement take any action or make any statement that could discredit the
reputation of the Company or its products or services.
(b) During the term of this Agreement, Employee shall not,
without the prior written consent of the Company, engage in, for the purpose of
financial gain, profit, or pecuniary advantage, any business activity that
competes, directly or indirectly, with the Company or is similar in nature to
the business in which the Company is engaged.
(c) Employee shall at no time during the term of this Agreement
or at any time subsequent to its termination, regardless of the reason
therefore, disclose to any person or entity, or use for personal gain and of the
Trade Secrets or any other confidential information of or pertaining to the
Company or its products and services disclosed to or obtained by Employee during
the term of this Agreement. Employee further agrees that he shall not, either
during the term of this Agreement or subsequent to the termination or expiration
hereof, regardless of the reasons therefore, disclose or otherwise reveal any of
the Trade Secrets to any person, either directly or indirectly, whether or not
for compensation or other remuneration.
(d) Within the one (1) year period immediately following the
termination of this Agreement, regardless of the reason therefor, Employee shall
not engage in any sales or sales promotion activity (whether or not resulting in
the consummation of a purchase and sale) that concerns products of the same or
similar type and use as those sold by the Company, when such sales or sales
promotion activity involves any solicitation effort by Employee directed to
prospective purchaser which had purchased Company products during the Term of
this Agreement.
(e) Employee shall not, within the two (2) year period following
termination of this Agreement, regardless of the reason therefor, solicit any
person then or theretofore employed by the Company or appointed as a
representative of the Company, to join Employee as a partner, co-venturer,
employee, investor, or otherwise, in any substantial business activity
whatsoever.
(f) The Company has bargained for the covenants set forth in this
Section 7 in consideration for the experience, knowledge and information he will
gain and the substantial compensation he may earn under this Agreement.
C-4
8. Inventions and Patents. Employee agrees that all inventions,
----------------------
innovations, improvements, developments, methods, designs, analyses, drawings,
processes, reports, and all similar or related information which relates to the
Company's or any of its Subsidiaries' actual or anticipated business, research
and development or existing or future products or services and which are
conceived, developed or made by Employee while employed by the Company or its
predecessor (a "Work Product") belong to the Company or such Subsidiary.
Employee will promptly disclose such Work Product to the Company and perform all
actions reasonable requested by the Company (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
Employee will, at the discretion and under the direction of the Company and at
the Company's expense, procure for the Company or its nominee such patents or
other protection covering such inventions or discoveries in the United States
and/or in any and/or all other countries. Employee agrees that remuneration
received as such employee shall constitute his sole right of compensation for
the performance of the obligations contained in respect of such inventions or
discoveries.
9. Illegality. The covenants of Employee in Sections 7 and 8 hereof
----------
shall each be construed as an agreement independent of any other provision in
this Agreement. Company and Employee hereby expressly agree and contract that
it is not the intention of either party to violate any public policy, statutory
or common law, and that if any sentence, paragraph, clause or combination of the
same is in violation of the law of any state where applicable, such sentence,
paragraph, clause or combination of the same alone shall be void in the
jurisdiction where it is unlawful, and the remainder of such paragraph and this
Agreement shall remain binding upon the parties hereto. The parties further
acknowledge that it is their intention that the provisions hereof be binding
only to the extent that they may be lawful under existing applicable laws, and
in the event that any provision hereof is determined by a court of law to be
overly broad or unenforceable, the parties hereto agree to the modification of
such provisions to the minimum extent required to make them valid and
enforceable.
10. Modification of Agreement. This Agreement may be modified by the
-------------------------
parties hereto only by a written supplemental agreement executed by both
parties.
11. Notice. Any notice required or permitted to be given hereunder
------
shall be deemed given when received in writing by the other party at the address
below:
If to Corporation:
CalComp Technology, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
C-5
If to Employee:
________________________________
________________________________
________________________________
or to such other address as either party hereto may specify, in writing, from
time to time.
12. Waiver of Breach. The waiver by either party of any breach of
----------------
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
13. Mediation. Any dispute arising out of this Agreement shall be
---------
submitted to mediation in Anaheim, California before a mediator jointly selected
by the parties to the mediation prior to the filing of any action for
enforcement of this Agreement, and such mediation proceedings shall not stay the
statute of limitations applicable to the action. Should suit be brought to
enforce any provision of this Agreement.
14. Titles. The titles of the Articles herein are for convenience of
------
reference only and are not to be considered in construing this Agreement.
15. Governing Law. This Agreement has been executed and delivered in
-------------
the State of California, and its interpretation, validity and performance shall
be construed and enforced in accordance with the laws of such State.
16. Entire Agreement. This Agreement contains the entire contract of
----------------
the parties with respect to the subject matter hereof and supersedes all prior
agreement or understandings between the parties, there being no extraneous
agreements.
C-6
INTENDING TO BE LEGALLY BOUND, the parties hereto have executed this
Agreement as of the date and year first written above.
------------------------------------
(Employee's Signature)
------------------------------------
(Employee's Printed Name)
CALCOMP TECHNOLOGY, INC.
By:
--------------------------------
Its:
--------------------------------
C-7
EXHIBIT D
PROPRIETARY DATA AND TRADE SECRETS AGREEMENT
------------------------------
Employee's Name (Type or Print)
------------------------------
Employee Number
CALCOMP TECHNOLOGY, INC.
EMPLOYEE AGREEMENT
PROPRIETARY DATA AND TRADE SECRETS
In consideration of my employment by CalComp Technology, Inc. ("CalComp") I
agree:
1. In view of the fact that my work as an employee of CalComp will bring
me into contact with proprietary data, trade secrets and information of CalComp
including, without limitation, matters of a technical nature, such as "know-
how", computer software, formulae, secret processes and/or machines, inventions,
and research projects, and matters of a business nature, such as information
about costs, profits, markets, sales, lists of customers, plans for future
development, and any other information of a similar nature to the extent not
available to the public, I agree I will not make use of any such proprietary
data, trade secrets and/or information of CalComp, except in the performance of
my work at CalComp, and I will not disclose to any person, any such proprietary
data, trade secrets and/or information of CalComp or other data which CalComp
has agreed to maintain in secrecy, except as authorized, in writing, by a duly
empowered official of CalComp.
2. To make and maintain adequate and current written and witnessed
records (in the form of notes, sketches, drawings or reports relating thereto)
of all inventions, improvements and discoveries in which CalComp may have
rights, and agree that all records, writings, and designs relating to work or
investigations of or on behalf of CalComp shall be and remain the property of
CalComp and shall be at all times available to CalComp with CalComp having the
sole right to obtain patents or copyrights or otherwise to use such records,
writings, or designs anywhere.
3. To deliver promptly to CalComp on termination of my employment with
CalComp, or at any time CalComp may so request, all memoranda, notes, records,
reports, manuals, drawings, blueprints, and any other documents belonging to
CalComp, including all copies of such materials which I may then possess or have
under my control.
4. In the manner designated hereinafter, I have made a complete list of
any and all unpatented and/or patented inventions not previously assigned to
former employers, including a brief description thereof, in which an interest is
claimed by me and which are to be excluded from the scope of this Agreement. To
the best of my knowledge, except as to the inventions so listed, or assigned, I
have no ownership or other interest in any invention.
D-1
[_] Employee claims no inventions to be excluded from this Agreement.
[_] Employee's inventions to be excluded from this Agreement:
[_] are listed on the reverse side of this Agreement.
[_] comprise sheets appended to this Agreement and made a part hereof.
-----
5. To disclose to CalComp promptly and fully in writing all inventions,
improvements and discoveries made or conceived, either solely or jointly with
others, including computer software, whether or not patentable or copyrightable,
during my employment with CalComp, whether or not during regular working hours,
which relate to any subject matter with which my work with CalComp is or may be
concerned or which relate to the business carried on by CalComp or which were
made or conceived using CalComp's facilities, information, funds or materials
(herein referred to as "Inventions").
6. I understand that CalComp claims no right in and agrees to release to
me all rights in any Invention reported by me for which no equipment, supplies,
facilities, funds or information of CalComp was used and which was developed
entirely on my own time, and (a) which does not relate (1) to the business of
CalComp or (2) to CalComp's actual or demonstrably anticipated research or
development, or (b) which does not result from any work performed by me for
CalComp.
7. Not to disclose at any time to others outside of CalComp, without
CalComp's prior written consent, whether during or subsequent to such
employment, and to assist CalComp in preventing unauthorized disclosure, or use
by others, of any information or data of a proprietary nature to CalComp, or of
a proprietary nature to others and which CalComp is obligated to protect as
proprietary, including formulae, processes, methods, apparatus, devices,
compositions, computer software, inventions or otherwise, and including matters
of a business nature such as information about costs, profits, markets, customer
lists, plans for future development, etc., to the extent not publicly available,
which are acquired by me in the performance of my work at CalComp or while on
CalComp's facilities, or which are received from CalComp employees, agents,
consultants, etc., and which are of a confidential, proprietary, or trade-secret
nature to CalComp or others and not generally known outside of CalComp, and
agree that I will not take with me any such information and/or materials at the
termination of my employment.
8. To assist CalComp and its nominees in every proper way, at CalComp's
expense, both during and subsequent to my employment, to obtain, protect and use
for CalComp's benefit patents (including patents, utility models and Inventors'
certificates) on Inventions, copyrights and trade secrets in any and all
countries, and hereby assign and agree to assign to CalComp all right, title and
interest in such patents, copyrights, and trade secrets devised by me alone or
with others for or on behalf of CalComp and agree to execute such papers and
perform all lawful acts as CalComp reasonably deems to be necessary to allow it
to exercise all right, title and interest in and to such patents, copyrights and
trade secrets. During my employment I will do the
D-2
foregoing acts for no additional compensation. Subsequent to my employment I
will do the foregoing acts for actual expenses incurred and reasonable
compensation for time actually spent.
9. To notify CalComp in writing and obtain proper authorization before
making any disclosure or performing any work on behalf of CalComp which appears
to threaten conflict with proprietary rights I claim in any invention or idea.
In the event of my failure to give such notice, I agree that I will make no
claim against CalComp with respect to any such inventions or ideas. Further, I
will notify CalComp in writing and obtain proper authorization before I cause
any work to be performed on behalf of CalComp which appears to threaten conflict
with rights of others arising out of obligations incurred by me prior to or
otherwise outside the scope of this Agreement. In doing work for or on behalf of
CalComp, I will refrain from the use of trade secret information owned by any
former employer or other third party, other than is permitted by agreement
between CalComp and such former employer or third party.
10. That any subsequent change or changes in my duties, salary or
compensation shall not affect the validity or scope of this Agreement. The
rights accruing to CalComp under this Agreement shall pass to its assigns or
successors. This Agreement may not be changed in whole or in part except by an
instrument in writing signed by an officer or duly authorized representative of
CalComp. This Agreement shall be binding upon my heirs, executors,
administrators, or other legal representatives. It is further understood that
this Agreement does not constitute, and shall not be deemed to constitute, a
contract of employment and shall survive the termination of my employment.
------------------------------------
(Employee's Signature)
------------------------------------
(Date)
WITNESS:
------------------------------------
------------------------------------
(Date)
D-3
EXHIBIT E
ASSIGNMENT AND TERMINATION AGREEMENT
ASSIGNMENT AND TERMINATION AGREEMENT
This Assignment and Termination Agreement (the "Agreement"), is made
and entered into effective as of November __, 1996, by and between Topaz
Technologies, Inc., a California corporation ("Topaz"), and ▇▇▇▇▇ Limited, a
company incorporated in England and Wales with registered No. 2257199 ("▇▇▇▇▇").
R E C I T A L S
- - - - - - - -
▇. ▇▇▇▇▇ and Topaz are parties to a Development and Supply
Participation Agreement dated effective September 10, 1995 (the "Participation
Agreement").
B. Topaz is in negotiations with CalComp Technology, Inc.
("CalComp") concerning a reorganization transaction whereby Topaz will become a
wholly-owned subsidiary of CalComp (the "Reorganization").
C. CalComp has required that, as a condition to the Reorganization,
▇▇▇▇▇ and its shareholders relinquish and assign all rights any of them may have
or claim in connection with the Participation Agreement, generally, and, in
particular, with respect to the piezo electric ink jet head technology and the
related rights and know-how developed and owned by Topaz and its affiliates (the
"Technology"), in full and complete consideration for which Topaz, with funds
advanced by CalComp, has agreed to pay to ▇▇▇▇▇ the sum hereinafter set forth.
▇. ▇▇▇▇▇ acknowledges for and on behalf of itself and its
affiliates, successors and assigns that CalComp, as a third party beneficiary
hereunder, is expressly relying on the agreements and covenants of ▇▇▇▇▇
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and obligations set forth herein, the parties agree as
follows:
1. ▇▇▇▇▇ certifies that the Participation Agreement attached hereto
as Exhibit A is a true, correct and complete copy of the Participation
Agreement, and that there have been no further amendments or modifications of
said agreement.
2. In consideration of the payment by Topaz to ▇▇▇▇▇ herewith of
$300,000 in cash, ▇▇▇▇▇ hereby assigns, transfers, sets over and conveys to
Topaz all of ▇▇▇▇▇'▇ right, title and interest in and to the Participation
Agreement and the Technology, including without limitation, any and all
ownership or royalty rights or claims it or any of its affiliates, partners,
agents, shareholders, employees, representatives, assigns or successors may
have, or may hereafter claim to have, against or relating to the Technology.
E-1
3. (a) ▇▇▇▇▇ hereby represents and warrants to Topaz that:
(i) It has not pledged, assigned, licensed, transferred,
hypothecated, sold or otherwise encumbered any right, title and interest it
may have under the Participation Agreement or to the Technology;
(ii) It owns its interest in the Participation Agreement
and any interest it may have in the Technology free and clear of all liens,
encumbrances, indebtedness and claims of third parties;
(iii) It is not in default of any of its obligations under
the Participation Agreement nor to its knowledge is Topaz in default of its
obligations thereunder, and ▇▇▇▇▇ for and on behalf of itself and its
affiliates, successors and assigns hereby waives any claims it or they may
have against Topaz in relation to the Participation Agreement, except as to
specific representations, warranties and agreements set forth herein which
may relate to the Participation Agreement;
(iv) It has full power and authority to enter into and to
execute this Agreement and to thereby transfer all rights its may have
under the Participation Agreement and to the Technology to Topaz on the
terms and conditions contained herein and to perform all of its obligations
hereunder;
(v) It has obtained the consent and approval of all
persons whose consent and approval is necessary to cause this Agreement to
be effective; and
(vi) None of the information relating to the Technology has
been divulged by ▇▇▇▇▇ except to employees who need to know the same and
who were and are contractually bound to keep the information confidential.
(b) Topaz hereby represents and warrants to ▇▇▇▇▇ that:
(i) Topaz for and or on behalf of itself and its affiliates,
successors and assigns hereby waives any claims it or they may have against
▇▇▇▇▇ in relation to the Participation Agreement, except as to specific
representations, warranties and agreements set forth herein which may
relate to the Participation Agreement;
(ii) None of the proprietary information of ▇▇▇▇▇ relating to
▇▇▇▇▇'▇ ink formulations ("Ink Formulations") has been divulged by Topaz
except to employees who need to know the same and who were and are
contractually bound to keep the information confidential.
4. (a) ▇▇▇▇▇ hereby agrees to indemnify, defend and hold Topaz
harmless from and against any and all claims, demands, liabilities, actions,
causes of action, expenses, costs and obligations, including, without
limitation, reasonable attorneys' fees, by reason of any misrepresentation of
▇▇▇▇▇ herein contained or by reason of matters arising from or related to
E-2
the Participation Agreement or the interests transferred pursuant hereto, unless
caused by the acts or omissions of Topaz.
(b) Topaz hereby agrees to indemnify, defend and hold ▇▇▇▇▇
harmless from and against any and all claims, demands, liabilities, actions,
causes of action, expenses, costs and obligations, including, without
limitation, reasonable attorneys' fees, by reason of any misrepresentation of
Topaz herein contained or by reason of matters arising from or related to the
Participation Agreement or the interests transferred pursuant hereto, unless
caused by the acts or omissions of ▇▇▇▇▇ or its affiliates; provided that the
▇▇▇▇▇ affiliates shall not include Codent Americas Ltd., I-Lab and Disposable
and Diaper Development Ltd.
5. ▇▇▇▇▇ and Topaz agree that, except for the confidentiality
provisions set forth in Section 12 of the Participation Agreement, the
Participation Agreement and all obligations thereunder, including, in
particular, any rights which ▇▇▇▇▇ may have to manufacture ink jet heads
pursuant to clause 5, any obligation to pay royalties pursuant to clause 10.1,
any obligation to procure a supply agreement under clause 11.1 and any
obligation to pay compensation pursuant to clause 11.2, shall terminate
immediately following the execution hereof. Further, ▇▇▇▇▇ (i) agrees that all
information it has received to date relating to the Technology will be treated
as proprietary and confidential to Topaz and will not be divulged to third
parties and will not, without the prior written consent of Topaz, be exploited
on behalf of itself or any third party by it or its affiliates, and (ii)
represents and warrants that any information, in whatever form, relating to the
Technology in the possession of ▇▇▇▇▇ or its affiliates has been delivered to
Topaz herewith. For its part, Topaz (i) agrees that all proprietary information
it has received to date relating to the Ink Formulations will be treated as
proprietary and confidential to ▇▇▇▇▇ and will not be divulged to third parties
and will not, without the prior written consent of ▇▇▇▇▇, be exploited on behalf
of itself or any third party by it or its affiliates, and (ii) represents and
warrants that any information, in whatever form, relating to the Ink
Formulations in the possession of Topaz or its affiliates has been delivered to
▇▇▇▇▇ herewith.
6. ▇▇▇▇▇ agrees to execute such further documents and take such
further actions as may be required to effectuate the assignment of its interest
hereunder and any interest it may have in and to the Technology to Topaz,
provided ▇▇▇▇▇ shall bear no additional cost or expense as a result thereof.
7. ▇▇▇▇▇ acknowledges that CalComp and ▇▇▇▇▇ intend to discuss and
negotiate as soon as practicable after the date hereof a mutually satisfactory
supply agreement covering the purchase by CalComp of ▇▇▇▇▇'▇ proprietary ink jet
fluids. However, ▇▇▇▇▇ further acknowledges that this Agreement is entered into
separately and apart from such intended supply agreement and that nothing in
this Agreement shall be affected by or is conditioned upon, agreement being
negotiated or reached in relation to a supply agreement.
8. ▇▇▇▇▇ further acknowledges that it understands that CalComp is
also contemplating an offer of employment/consulting to ▇▇▇▇▇▇▇ ▇▇▇▇, and that
each of ▇▇▇▇▇ and its shareholders acknowledge that the consideration to be paid
hereunder by Topaz to ▇▇▇▇▇ (which will be funded by CalComp) is fair and
adequate to ▇▇▇▇▇, notwithstanding any other or
E-3
subsequent agreement CalComp or Topaz or any of their affiliates may have or may
enter into with ▇▇. ▇▇▇▇.
9. As part of the consideration for the payment by Topaz to ▇▇▇▇▇
referred to in Section 2 above, ▇▇▇▇▇ hereby grants to Topaz an option (the
"Option") to purchase ▇▇▇▇▇ for cash in an amount equal to the fair market value
of ▇▇▇▇▇ at the time of the exercise of the Option. The term of the Option
shall be for five years from the date hereof and the Option shall be exercisable
at any time during the term by Topaz upon 90 days written notice to ▇▇▇▇▇. Upon
notice of exercise, the parties will agree upon a mutually acceptable appraisal
procedure to determine the fair market value of ▇▇▇▇▇ and will also agree upon a
commercially reasonable procedure to determine the fair market value of ▇▇▇▇▇
and will also agree upon a commercially reasonable acquisition contract and
structure (i.e., merger, stock purchase, sale of assets or the like). In the
event of a disagreement about appraisal procedures, the parties will submit to
an arbitrator appointed by the Institute of Chartered Accountants in England and
Wales. During the Option term, ▇▇▇▇▇ will also give Topaz a right of first
refusal concerning any third party offers to purchase ▇▇▇▇▇, or a significant
portion of its assets, such that Topaz will have 60 days from its receipt of
notice of any such offer to purchase ▇▇▇▇▇ or such assets on the terms and
conditions proposed by such third party. ▇▇▇▇▇ acknowledges that the rights
granted to Topaz under this Section 9 are assignable to CalComp or any affiliate
of CalComp or any purchaser of CalComp or such affiliate.
10. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their respective heirs, executors,
administrators, successors in interest and assigns.
11. In the event of any controversy arising out of or in connection
with this Agreement, the prevailing party in any action or proceeding shall be
entitled to receive from the other party all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party in connection with
such action or proceeding.
12. This Agreement shall be governed by, interpreted under, and
construed and enforced in accordance with the laws of the State of California
applicable to agreements made and to be performed wholly within the State of
California. In the event a judicial proceeding is necessary, the sole forum for
resolving disputes arising under or relating to this Agreement shall be the
Municipal and Superior Courts for the County of Orange, California and all
related appellate courts and the parties hereby consent to the jurisdiction of
such courts, and that venue shall be in Orange County, California.
13. This Agreement may be executed in counterparts, each of which
shall constitute an original, but all of which shall collectively constitute one
and the same instrument.
E-4
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
"TOPAZ"
TOPAZ TECHNOLOGIES, INC., a California corporation
By:
------------------------------------
Its:
-----------------------------
"▇▇▇▇▇"
▇▇▇▇▇ LIMITED, a Company incorporated in England
and Wales with registered No. 2257199
By:
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Its:
-----------------------------
CalComp Technology, Inc., a Delaware
corporation, hereby executes this Agreement
as an express third party beneficiary hereof.
By:
----------------------------------------
▇▇▇▇ ▇▇▇▇, President
E-5
EXHIBIT F
EMPLOYEE OPTION GRANTS
[COPY TO COME]
59
[COPY TO COME]
60
[COPY TO COME]
61
[COPY TO COME]
62
[COPY TO COME]
63
EXHIBIT G
INDEMNITY AND ESCROW AGREEMENT
INDEMNITY AND ESCROW AGREEMENT
This Indemnity and Escrow Agreement ("Escrow Agreement"), dated
November 18, 1996, is entered into by and among CalComp Technology, Inc., a
Delaware corporation ("CalComp"), ___________________________________________
("Escrow Agent"), and Andreas Bibl as representative (the "Representative") of
certain shareholders of Topaz Technologies, Inc., a California corporation
("Topaz").
In consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. Description of Reorganization Agreement. CalComp, Topaz and the
---------------------------------------
shareholders of Topaz (the "Topaz Shareholders") have entered into an Agreement
and Plan of Reorganization dated as of November 15, 1996 (the "Reorganization
Agreement") whereby CalComp will issue cash and shares of its Common Stock to
the Topaz Shareholders. The Reorganization Agreement provides that at the
"Closing Date" (as defined in the Reorganization Agreement) an aggregate of
1,500,000 of Merger Shares (as defined in the Reorganization Agreement) to be
issued to the Topaz Shareholders in the Reorganization, together with stock
powers duly endorsed in blank, shall be placed into an escrow account ("Escrow
Account") to provide a fund for the satisfaction of any indemnity which might be
due CalComp pursuant to Article IX of the Reorganization Agreement. The Topaz
Shareholders have entered into an agreement with the Representative authorizing
the Representative to enter into this Escrow Agreement on their behalf and to
represent their respective interests in accordance herewith.
2. Deposit of Escrow Funds.
-----------------------
(a) On the Closing Date, the Representative will deliver to the
Escrow Agent 1,500,000 shares of CalComp Common Stock, together with stock
powers duly endorsed in blank with signatures guaranteed (the "Stock"), which
represents the aggregate contribution to the Escrow Account required of the
Topaz Shareholders. The respective interests of such shareholders in the Stock
deposited at the Closing Date (which interests are subject to indemnification
claims made against the Escrow Account by CalComp pursuant hereto) are as set
forth on Schedule 1 attached hereto (the "Shareholder Schedule").
(b) The Escrow Agent agrees to accept delivery of the Stock
referred to above, and to hold such Stock ("Escrow Stock") for a period and on
the terms and conditions specified in this Escrow Agreement. The Escrow Stock
shall be held by the Escrow Agent for a period of two (2) years from the Closing
Date ("Escrow Term"). Subject to the further provisions of this Escrow
Agreement, at the expiration of the Escrow Term (subject to any pending claims),
any Escrow Stock remaining in the Escrow Account shall be delivered by Escrow
Agent to the Topaz Shareholders in accordance with such shareholders' respective
interests as set forth on the Shareholder Schedule.
G-1
3. Notice of Claims.
----------------
(a) If, during the Escrow Term, CalComp shall deliver to the
Escrow Agent and the Representative written notice of a claim (as described in
Article VIII of the Reorganization Agreement) against which CalComp is entitled
to indemnification under Article VIII of the Reorganization Agreement and
setting forth the applicable information called for by Section 3(b) hereof
("Notice of Claims"), the Escrow Agent shall, notwithstanding the expiration of
the Escrow Term, continue to hold a number of shares of Escrow Stock in the
Escrow Account equal to the aggregate amount of claims referred to in such
Notice of Claims and any other unresolved Notice or Notices of Claims (or if the
amount referred to in such Notice(s) of Claims is greater than the amount held
in the Escrow Account, then the Escrow Agent shall continue to hold the entire
amount in the Escrow Account) until such claims are resolved pursuant to Section
4 hereof.
(b) Any Notice of Claims shall contain the following information
to the extent it is reasonably available to CalComp:
(i) The amount of the alleged loss or liability against
which CalComp is indemnified; and
(ii) A brief description of the circumstances giving rise to
the alleged loss or liability.
(c) The Escrow Agent shall not transfer any of the Escrow Stock
held in the Escrow Account to CalComp pursuant to a Notice of Claims until such
Notice of Claims has been resolved in accordance with Section 4 below.
4. Resolution of a Notice of Claims and Transfer of Escrow Stock.
-------------------------------------------------------------
Notice of Claims received by the Escrow Agent pursuant to Section 3 above shall
be resolved as follows:
(a) Uncontested Claims: In the event that the Representative
------------------
does not contest a Notice of Claims in writing to the Escrow Agent and CalComp
within 30 days of the mailing of said Notice of Claims as set forth in Section
3(a) hereof, the Escrow Agent shall transfer to CalComp a number of shares of
Escrow Stock with a value (determined pursuant to Section 4(c) hereof) equal to
the amount specified in the Notice of Claims and notify the Representative of
such transfer.
(b) Contested Claims: In the event that the Representative
----------------
contests the Notice of Claims in writing to the Escrow Agent and CalComp within
the 30-day period provided above, the Escrow Agent shall continue to hold Escrow
Stock in the Escrow Account sufficient to cover such claims (notwithstanding the
expiration of the Escrow Term) until (i) receipt of a copy of a settlement
agreement executed by CalComp and the Representative setting forth a resolution
of the Notice of Claims, or (ii) receipt of a copy of a final judgment entered
by a court of competent jurisdiction as to the disposition of the disputed
amount held in
G-2
the Escrow Account. Contested claims under this Escrow Agreement shall be
resolved by a declaratory relief action.
(c) Determination of Amount of Claims. Any amount owed to CalComp
---------------------------------
hereunder determined pursuant to Section 4(a) or (b) above shall be immediately
payable to CalComp at CalComp's option as follows: out of the Escrow Stock then
held by the Escrow Agent on a per share value equal to the average closing price
per share of CalComp Common Stock on the NASDAQ National Market System or
national securities exchange on which shares are listed for the 20 trading days
prior to the date of delivery of such shares to CalComp hereunder or, if such
shares are not listed on the NASDAQ National Market System or a national
securities exchange at such time, the average of the closing bid and asked
prices in the over-the-counter market during such 20 trading days.
(d) Claims to be Paid Pro Rata. Unless otherwise directed, the use of
--------------------------
shares of Escrow Stock for indemnification hereunder shall be in proportion to
the respective interests therein among the registered holders of the Escrow
Stock set forth in the Shareholder Schedule.
(e) No Election of Remedies. The Representative acknowledges and
-----------------------
agrees that CalComp may institute claims against the Escrow Stock and in
satisfaction thereof may retake shares of Escrow Stock without making any claims
directly against Topaz and without rescinding or attempting to rescind the
transactions consummated pursuant to the Reorganization Agreement. The
assertion of any single claim for indemnification hereunder shall not bar
CalComp from asserting other claims for indemnification hereunder. It is hereby
agreed that CalComp need not exhaust any other remedies that may be available to
it but may proceed directly in accordance with the provisions of this Escrow
Agreement.
(f) Limitation of Liability. CalComp shall be entitled to recover
-----------------------
damages for breach of any representation or warranty of Topaz under the
Reorganization Agreement after the date hereof only with respect to events
occurring prior to the date hereof and only pursuant to this Escrow Agreement,
except for intentional or reckless breaches of representations or warranties of
Topaz and any representations or covenants of any Shareholder, in which case
CalComp's remedies shall not be limited by this Escrow Agreement.
5. Rights Relating to Escrow Stock. The parties hereto agree that
-------------------------------
so long as any Escrow Stock is held by the Escrow Agent hereunder all share
dividends and stock split shares with respect to such Escrow Stock shall be
delivered to the Escrow Agent and shall be deemed Escrow Stock hereunder, but
the registered holders of the Escrow Stock shall be entitled to vote the shares
evidenced thereby and to receive dividends (other than share dividends) on such
shares of Escrow Stock.
6. Limitation of Escrow Agent's Liability.
--------------------------------------
(a) The Escrow Agent shall incur no liability with respect to any
action taken or suffered by it in reliance upon any notice, direction,
instruction, consent, statement or
G-3
other paper or documents believed by it to be genuine and duly authorized, nor
for anything except its own willful misconduct or negligence. The Escrow Agent
shall not be responsible for the validity or sufficiency of this Escrow
Agreement. In all questions arising under the Escrow Agreement, the Escrow
Agent may rely on the advice of counsel, and for anything done, omitted or
suffered in good faith by the Escrow Agent based on such advice the Escrow Agent
shall not be liable to anyone. The Escrow Agent shall not be required to take
any action hereunder involving any expense unless the payment of such expense
shall be made or provided for in a manner satisfactory to it.
(b) In the event that any controversy arises among the parties hereto
or with any third person with respect to the subject matter of this Escrow
Agreement, its conditions or terms, the Escrow Agent may request the parties to
resolve such controversy to its satisfaction or the Escrow Agent may file an
interpleader or other appropriate action with the court having jurisdiction in
such matters in order to resolve such controversy. In any event, the Escrow
Agent shall not be required to determine the same or take any action in the
premises, but may await the settlement of any such controversy by final
appropriate legal process. CalComp shall be liable for all costs and expenses
incurred by Escrow Agent pursuant to the exercise of Escrow Agent's rights in
this Section 6.
7. Notices. All notices, instructions and other communications
-------
required or permitted to be given hereunder or necessary or convenient in
connection herewith shall be in writing and may be personally served or may be
deposited in the United States mail, registered or certified, return receipt
requested, postage prepaid, addressed as follows:
If to the Escrow Agent:
-------------------------
-------------------------
-------------------------
Attn:
-------------------
If to CalComp: CalComp Technology, Inc.
▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
-------------------
If to the Representative: Andreas Bibl
-------------------------
-------------------------
-------------------------
or to such other address as the Escrow Agent, CalComp or the Representative, as
the case may be, shall designate in writing delivered to the Escrow Agent,
CalComp and the Representative. Notice mailed as provided herein shall be
deemed given on the third business day following the date so mailed or on the
date of actual receipt, whichever is earlier.
G-4
8. General. This Escrow Agreement shall be governed by and construed
-------
in accordance with the laws of the State of California and shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.
9. Expenses. All fees and expenses of the Escrow Agent shall be
--------
paid by CalComp. The Representative shall not be entitled to receive any
compensation or expenses from CalComp in connection with this Escrow Agreement.
10. Successor Representative. In the event that the Representative
------------------------
becomes unavailable or unwilling to continue in his capacity hereunder, the
holders of a majority of the Escrow Stock shall designate a successor
Representative by written notice to CalComp and the Escrow Agent.
11. Successor Escrow Agent. In the event that the Escrow Agent
----------------------
becomes unavailable or unwilling to continue in its capacity herewith, CalComp
may appoint a successor Escrow Agent without the consent of the Representative,
so long as such Escrow Agent is a bank.
IN WITNESS WHEREOF, the parties have duly executed this Escrow
Agreement as of the day and year first above written.
"CALCOMP"
CALCOMP TECHNOLOGY, INC.
By:
---------------------------------
Its:
--------------------------
"ESCROW AGENT"
[BANK]
By:
---------------------------------
Its:
--------------------------
"REPRESENTATIVE"
-------------------------------------
Andreas Bibl
G-5
SCHEDULE 1
TO
INDEMNITY AND ESCROW AGREEMENT
Shareholder Shares of Stock
----------- ---------------
Andreas Bibl 500,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 500,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 500,000