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EXHIBIT 10.39
MOBILITY ELECTRONICS, INC.
STRATEGIC PARTNER AGREEMENT
WITH
CYBEX COMPUTER PRODUCTS CORPORATION
MARCH 6, 2000
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STRATEGIC PARTNER AGREEMENT
This Strategic Partner Agreement (the "Agreement") is made as of the 6th
day of March, 2000, by and between Mobility Electronics, Inc., a Delaware
corporation (the "Company"), and Cybex Computer Products Corporation, an Alabama
corporation (the "Cybex"). The Company and Cybex are sometimes each referred to
herein as a "Party" and collectively, as the Parties".
The Parties agree as follows:
1. STRATEGIC RELATIONSHIP.
1.1 BACKGROUND. The Parties have determined that a strategic business
relationship between them would be beneficial to both Parties. In forming such
business relationship Cybex has agreed to make an investment in the Company,
both parties have agreed to license certain technology to each other, and the
Company has agreed to sell certain of its products to Cybex on a private label
basis.
1.2 LICENSE AGREEMENTS AND PRIVATE LABEL AGREEMENT. At the Closing (as
defined below), the Parties agree to execute and deliver to each other: (i) a
Mobility License Agreement, in the form attached hereto as Exhibit A (the
"Mobility License Agreement"); (ii) a Cybex License Agreement, in the form
attached hereto as Exhibit B (the "Cybex License Agreement"); and (iii) the
Mobility Private Label Agreement, in the form attached hereto as Exhibit C (the
"Mobility Private Label Agreement"). The Mobility License Agreement, the Cybex
License Agreement and the Mobility Private Label Agreement are sometimes
collectively referred to herein as the "Other Agreements").
1.3 SALE AND ISSUANCE OF SERIES D PREFERRED STOCK.
(a) The Company has adopted and filed with the Secretary of State
of the State of Delaware a Certificate of the Designations, Preferences, Rights
and Limitations of Series D Preferred Stock of the Company, a copy of which is
attached hereto as Exhibit D (the "Certificate of Designations").
(b) Subject to the terms and conditions of this Agreement, Cybex
agrees to purchase at the Closing and the Company agrees to sell and issue to
Cybex at the Closing 500,000 shares (the "Shares") of Series D Preferred Stock
(the "Series D Stock") at a purchase price of $10.00 per share.
1.4 CLOSING; DELIVERY.
(a) The purchase and sale of the Shares shall take place at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, at
10:00 a.m., on the date hereof, or at such other time and place as the Company
and Cybex
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mutually agree upon, orally or in writing (which time and place are designated
as the "Closing").
(b) At the Closing, the Company shall deliver to Cybex a
certificate representing the Shares, against payment of $5,000,000 by wire
transfer to the Company's bank account.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Cybex that the following are true and correct as of
the date hereof:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to:
(i) carry on its business as now conducted and proposed to be conducted; (ii)
execute and deliver this Agreement and the Other Agreements (collectively, the
"Agreements") and (iii) issue and sell the Shares and the common stock, par
value $0.01 per share, of the Company (the "Common Stock") issuable upon
conversion of the Shares, and to carry out the provisions of the Agreements. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business or properties.
2.2 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of the Agreements, the performance of all obligations of
the Company under the Agreements and the authorization, issuance, sale and
delivery of the Shares has been taken or will be taken prior to the Closing, and
the Agreements, when executed and delivered by the Company, shall constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
other laws of general application affecting enforcement of creditors' rights
generally, as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
2.3 VALID ISSUANCE OF SECURITIES. The Shares that are being issued to
Cybex hereunder, when issued, sold and delivered in accordance with the terms
hereof for the consideration expressed herein, will be duly and validly issued,
fully paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under the Agreements and applicable state and federal
securities laws. Based in part upon the representations of Cybex in this
Agreement, the Shares will be issued in compliance with all applicable federal
and state securities laws. The Common Stock issuable upon conversion of the
Shares has been duly and validly reserved for issuance, and upon issuance in
accordance with the terms of the Certificate of Designations, shall be duly and
validly issued, fully paid and nonassessable and free of restrictions on
transfer other than restrictions on transfer under the Agreements, and
applicable federal and state securities laws and will be issued in compliance
with all applicable federal and state securities laws.
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2.4 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
or default of any provisions of (i) its Certificate of Incorporation or Bylaws
(as such documents are in force and effect as of the Closing) or (ii) any
instrument, judgment, order, writ, decree or contract to which it is a party or
by which it is bound, the violation of, or default, which would have a material
adverse effect on the Company, or, to the best knowledge of the Company, of any
provision of federal or state statute, rule or regulation applicable to the
Company. The execution, delivery and performance of the Agreements and the
consummation of the transactions contemplated hereby or thereby will not result
in any such violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event which results
in the creation of any lien, charge or encumbrance upon any assets of the
Company.
2.5 DISCLOSURE. The Company has provided Cybex a copy of the
registration statement on Form S-1 filed by the Company with the Securities and
Exchange Commission on February 11, 2000 (the "Registration Statement"). The
Registration Statement has been so provided solely for purposes of providing
information about the Company to Cybex, and not as an inducement to participate
in the potential offering provided therein. The Company has fully provided Cybex
with all the information that Cybex has requested for deciding whether to
acquire the Shares and all information that the Company believes is reasonably
necessary to enable the Cybex to make such a decision. Neither the Registration
Statement nor any representation or warranty of the Company contained in this
Agreement and the exhibits attached hereto or any certificate furnished or to be
furnished to Cybex at the Closing contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made.
2.6 OFFERING. Subject in part to the truth and accuracy of Cybex's
representations and warranties set forth in Section 3 of this Agreement, the
offer, sale and issuance of the Shares as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and any applicable state securities laws, and
neither the Company nor any authorized agent acting on its behalf will take any
action hereafter that would cause the loss of such exemption.
3. REPRESENTATIONS AND WARRANTIES OF CYBEX. Cybex hereby represents and
warrants to the Company that:
3.1 AUTHORIZATION. Cybex has full power and authority to enter into
the Agreements. The Agreements, when executed and delivered by Cybex, will
constitute valid and legally binding obligations of Cybex, enforceable in
accordance with their terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and any other
laws of general application affecting enforcement of creditors' rights
generally, and as limited by laws relating to the availability of a specific
performance, injunctive relief, or other equitable remedies.
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3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Agreements are made with
Cybex in reliance upon Cybex's representation to the Company, which by Cybex's
execution of this Agreement Cybex hereby confirms, that the Shares to be
acquired by Cybex will be acquired for investment for Cybex's own account, not
as a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that Cybex has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, Cybex further represents that Cybex does not presently have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Shares.
3.3 DISCLOSURE OF INFORMATION. Cybex has had an opportunity to discuss
the Company's business, management, financial affairs and the terms and
conditions of the offering of the Shares with the Company's management and has
had an opportunity to review the Company's facilities. Cybex understands that
such discussions and any other written information delivered by the Company to
Cybex were intended to describe the aspects of the Company's business which it
believes to be material.
3.4 RESTRICTED SECURITIES. Cybex understands that the Shares have not
been, and will not be, registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of Cybex's representations as expressed herein. Cybex
understands that the Shares are "restricted securities" under applicable U.S.
federal and state securities laws and that, pursuant to these laws, Cybex must
hold the Shares indefinitely unless they are registered with the Securities and
Exchange Commission and qualified by state authorities, or an exemption from
such registration and qualification requirements is available. Cybex further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
on requirements relating to the Company which are outside of Cybex's control,
and which the Company is under no obligation and may not be able to satisfy.
Cybex is hereby granted certain registration rights as set forth on Exhibit E
attached hereto.
3.5 NO PUBLIC MARKET. Cybex understands that no public market now
exists for any of the securities issued by the Company, and that the Company has
made no assurances that a public market will ever exist for the Shares.
3.6 LEGENDS. Cybex understands that the Shares may bear one or all of
the following legends (or substantially similar legends):
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
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OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(b) Any legend set forth in the other Agreements.
(c) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
3.7 ACCREDITED INVESTOR. Cybex is an accredited investor as defined in
Rule 501 (a) of Regulation D promulgated under the Securities Act as presently
in effect.
4. CONDITIONS OF THE CYBEX'S OBLIGATIONS AT CLOSING. The obligations of
Cybex to the Company under this Agreement are subject to the fulfillment, on or
before the Closing, of each of the following conditions, unless otherwise
waived:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 2 shall be true and correct on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing.
4.2 PERFORMANCE. The Company shall have performed and complied with
all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
4.3 COMPLIANCE CERTIFICATE. The President of the Company shall deliver
to Cybex at the Closing a Compliance Certificate certifying that the conditions
specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 CONSENTS; QUALIFICATIONS. The Company shall have obtained any and
all consents, permits and waivers necessary or appropriate for consummation of
the transactions contemplated by the Agreements (except for such as may be
properly obtained subsequent to the Closing Date). All authorizations, approvals
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
issuance and sale of the Stock pursuant to this Agreement shall be obtained and
effective as of the Closing.
4.5 OPINION OF COMPANY COUNSEL. Cybex shall have received from ▇▇▇▇▇▇▇
▇▇▇▇▇▇ L.L.P., counsel for the Company, an opinion, dated as of the Closing, in
substantially the form of Exhibit F.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of
the Company to Cybex under this Agreement are subject to the fulfillment, on or
before the Closing, of each of the following conditions, unless otherwise
waived:
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5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Cybex contained in Section 3 shall be true and correct on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
5.2 PERFORMANCE. All covenants, agreements and conditions contained in
this Agreement to be performed by Cybex on or prior to the Closing shall have
been performed or complied with in all material respects.
5.3 QUALIFICATIONS. All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be obtained and effective as of the
Closing.
6. MISCELLANEOUS.
6.1 SURVIVAL. Unless otherwise set forth in this Agreement, the
warranties and representations of the Company and Cybex contained in or made
pursuant to this Agreement shall survive the execution and delivery of this
Agreement and the Closing for a period of one (1) year following the Closing.
6.2 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.3 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
6.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.5 NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed to the party to be notified at such
party's address as set forth on the signature page hereto, or as subsequently
modified by written notice.
6.6 FINDER'S FEE. Except for fees payable by the Company to ▇.▇.
▇▇▇▇▇▇▇▇ & Co., each party represents that it neither is nor will be obligated
for any finder's fee or commission in connection with the Agreements. Cybex
agrees to indemnify and to hold harmless the Company from any liability for any
commission or
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compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which Cybex or any
of its officers, employees, or representatives is responsible. The Company
agrees to indemnify and hold harmless each Cybex from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.
6.7 FEES AND EXPENSES. Each party shall be responsible for any fees or
expenses, incurred by it with respect to this Agreement, the documents referred
to herein and the transactions contemplated hereby and thereby.
6.8 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any of the
Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
6.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
or waived only with the written consent of the Company and Cybex. Any amendment
or waiver effected in accordance with this Section 6.9 shall be binding upon
Cybex and each transferee of the Shares, each future holder of the Shares, and
the Company.
6.10 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
6.11 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
6.12 ENTIRE AGREEMENT. This Agreement, and the documents referred to
herein constitute the entire agreement between the parties hereto pertaining to
the
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subject matter hereof, and any and all other written or oral agreements relating
to the subject matter hereof existing between the parties hereto are expressly
canceled.
6.13 CONFIDENTIALITY. Each party hereto agrees that, except with the
prior written permission of the other parties hereto, it shall at all times keep
confidential and not divulge, or make accessible to anyone any confidential
information, knowledge or data concerning or relating to the business or
financial affairs of the other parties to which such party has been or shall
become privy by reason of this Agreement, discussions or negotiations relating
to this Agreement, the performance of its obligations hereunder or the ownership
of Shares purchased hereunder. The provisions of this Section 6.13 shall be in
addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto with respect to the
transactions contemplated hereby.
6.14 RELIANCE. Cybex acknowledges that it is not relying upon any
person, firm or corporation, other than the Company and its officers and
directors, in making its investment or decision to invest in the Company.
6.15 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
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The parties have executed this Agreement as of the date first written
above.
MOBILITY ELECTRONICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President
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Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇)▇▇▇-▇▇▇▇
CYBEX COMPUTER
PRODUCTS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title:
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇)▇▇▇-▇▇▇▇
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