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EXHIBIT 2.1
STOCK EXCHANGE AGREEMENT
Dated as of May 13, 1999
By and Between
8x8, Inc.
Odisei S.A.
And the Security Holders named herein
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TABLE OF CONTENTS
PAGE
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ARTICLE I 2
1.1 Certain Defined Terms................................................................................2
1.2 Other Definitions....................................................................................4
ARTICLE II EXCHANGE OF SHARES.............................................................................................4
2.1 The Share Exchange...................................................................................4
2.2 Closing; Closing Date................................................................................4
2.3 Exchange of Odisei Shares............................................................................4
2.4 Outstanding BSPCE....................................................................................5
2.5 Delivery of 8x8 Common Stock.........................................................................5
2.6 Fractional Shares....................................................................................6
2.7 Adjustments for Capital Changes......................................................................6
2.8 Effects of the Transaction...........................................................................6
ARTICLE III EXCHANGE OF CERTIFICATES......................................................................................6
3.1 Exchange.............................................................................................6
3.2 No Further Ownership Rights in Odisei Shares.........................................................6
3.3 Legends..............................................................................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS AND Odisei..................................................7
4.1 Due Organization.....................................................................................7
4.2 Authority............................................................................................7
4.3 Good Title...........................................................................................8
4.4 Capitalization.......................................................................................8
4.5 No Conflict..........................................................................................9
4.6 Third Party Consents................................................................................10
4.7 Financial Statements................................................................................10
4.8 Absence of Certain Changes..........................................................................10
4.9 No Subsidiaries.....................................................................................11
4.10 Legal Proceedings...................................................................................12
4.11 Conduct of Business in Compliance with Regulatory Requirements......................................12
4.12 Properties: Liens and Encumbrances..................................................................12
4.13 Insurance...........................................................................................12
4.14 Intellectual Property...............................................................................13
4.15 Material Contracts..................................................................................16
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4.16 Certain Agreements..................................................................................16
4.17 Employee Matters....................................................................................17
4.18 Labor Matters.......................................................................................17
4.19 Taxes...............................................................................................17
4.20 Other Transactions..................................................................................18
4.21 Brokers, Finders, Etc...............................................................................18
4.22 Full Disclosure.....................................................................................18
4.23 Environmental Matters...............................................................................18
4.24 Interested Party Transactions.......................................................................18
4.25 Governmental Authorization..........................................................................19
4.26 Accounts Receivable; Inventory......................................................................19
4.27 Compliance with Laws................................................................................19
4.28 Warranties; Indemnities.............................................................................19
4.29 Representations Complete............................................................................20
4.30 Information Reviewed................................................................................20
4.31 Due Diligence.......................................................................................20
4.32 Non U...............................................................................................20
ARTICLE V REPRESENTATIONS AND WARRANTIES OF 8X8..........................................................................20
5.1 Due Organization....................................................................................20
5.2 Corporate Power.....................................................................................21
5.3 Capitalization......................................................................................21
5.4 Authorization and Validity of Agreement.............................................................21
5.5 Legal Proceedings...................................................................................21
5.6 SEC Filings.........................................................................................22
5.7 Full Disclosure.....................................................................................22
5.8 No Conflict.........................................................................................22
5.9 Third Party Consents................................................................................23
ARTICLE VI CONDUCT PRIOR TO THE CLOSING..................................................................................23
6.1 Conduct of Business of Odisei.......................................................................23
6.2 No Solicitation.....................................................................................25
ARTICLE VII COVENANTS....................................................................................................26
7.1 Advice of Changes...................................................................................26
7.2 Certain Defaults....................................................................................26
7.3 Satisfaction of Conditions Precedent................................................................26
7.4 Further Actions.....................................................................................27
7.5 Board of Directors..................................................................................27
7.6 Transfers of Stock..................................................................................27
7.7 Cooperation.........................................................................................27
7.8 Further Limitations on Disposition..................................................................27
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ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING.............................................................................28
8.1 Conditions Precedent to Obligations of Parties......................................................28
8.2 Conditions to Obligations of Odisei and the Security Holders........................................28
8.3 Conditions to the Obligations of 8x8................................................................29
ARTICLE IX TERMINATION, AMENDMENT AND WAIVERS............................................................................30
9.1 Termination.........................................................................................30
9.2 Procedure Upon Termination..........................................................................31
9.3 Amendment and Modification; Waiver..................................................................31
ARTICLE X INDEMNIFICATION................................................................................................32
10.1 Survival of Representations, Warranties and Covenants...............................................32
10.2 Indemnification.....................................................................................32
10.3 Method of Asserting Claims..........................................................................32
10.4 Indemnification Liability Limitations...............................................................32
10.5 Security Holders'Agent of the Shareholders; Power of Attorney.......................................33
10.6 Third-Party Claims..................................................................................34
ARTICLE XI GENERAL PROVISIONS............................................................................................34
11.1 Survival of Representations and Warranties..........................................................34
11.2 Expenses; Certain Fees; Taxes.......................................................................34
11.3 Notices.............................................................................................34
11.4 Entire Agreement....................................................................................35
11.5 Binding Effect, Benefit.............................................................................36
11.6 Assignability.......................................................................................36
11.7 Section Headings....................................................................................36
11.8 Counterparts........................................................................................36
11.9 Applicable Law.....................................................................................36
11.10 Severability........................................................................................36
11.11 No Waiver...........................................................................................36
11.12 Remedies Not Exclusive..............................................................................36
11.13 Interpretation......................................................................................36
11.14 Rules of Construction...............................................................................36
11.15 Disclosure..........................................................................................37
11.16 Indemnification of Costs and Expenses in the Event of Disputes......................................37
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Exhibits
A-1. Odisei Shareholders as of May 13, 1999
A-2. Additional Odisei Shareholders as of the Closing
B. Form of Loan and Security Agreement
C. Forms of Employment, Stock Restriction and Noncompetition
Agreements
D. Escrow Agreement
E. Tax Escrow Agreement
F. Registration Rights Agreement
G. Odisei Exceptions Letter
H. Odisei Statuts
I. Ordre de Mouvement of Each Shareholder
J. 8x8 Exceptions Letter
K. Opinions of counsel to Odisei ▇.▇.
▇. Opinions of counsel to 8x8, Inc.
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STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (this "AGREEMENT") is made as of May
13, 1999, by and between 8x8, Inc., a Delaware corporation ("8X8"), Odisei S.A.,
a French corporation ("ODISEI"), and the Security Holders (as defined below) as
listed on Exhibit A-1 and Exhibit A-2.
RECITALS
WHEREAS, the board of directors of 8x8 deems it advisable and in the
best interests of 8x8 and its stockholders for 8x8 to acquire from the holders
of the share capital of Odisei listed on Exhibit A-1 hereto (the "SHAREHOLDERS")
all but four of their shares in Odisei (the "ODISEI SHARES") on the terms and
subject to the conditions set forth in this Agreement for Common Stock, par
value $0.001 per share, of 8x8 (the "8X8 COMMON STOCK"); and
WHEREAS, the board of directors of 8x8 deems it advisable and in the
best interests of 8x8 and its stockholders for 8x8 to enter into the Loan and
Stock Restriction Agreements, each dated as of the Closing Date (the "LOAN AND
STOCK RESTRICTION AGREEMENTS") substantially in the form attached hereto as
Exhibit B, pursuant to which 8x8 will loan to the holders (the "OTHER HOLDERS";
the Other Holders and the Shareholders are collectively referred to as the
"SECURITY HOLDERS") of the Bons de Souscription de Parts de Createurs
d'Entreprise ("BSPCE"), each of whom are listed on Exhibit A-2 sufficient funds
to purchase Odisei stock pursuant to the exercise all of such BSPCE such that
such BSPCE holders shall exchange their Odisei Shares for 8x8 Shares at the
Closing (as defined in Section 2.2 below);
WHEREAS, Odisei and the Security Holders, on the one hand, and 8x8,
on the other hand, desire to make certain representations, warranties, covenants
and other agreements in connection with the Share Exchange (as defined in
Section 2.1 below);
WHEREAS, the Shareholders desire to provide certain indemnities to
8x8 in connection with the Share Exchange;
WHEREAS, concurrently with the execution of this Agreement, as a
material inducement to 8x8 to enter into this Agreement, (i) ▇▇▇▇▇▇▇▇ Atru is
entering into an Employment Agreement, dated as of the Closing Date, with Odisei
and a Stock Restriction and Noncompetition Agreement, each dated as of the
Closing Date, with 8x8, (ii) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ is entering into an Employment
and Stock Restriction Agreement and Noncompetition Agreement, each dated as of
the Closing Date, with 8x8 and (iii) ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ is entering into an
Employment Agreement, dated as of the Closing Date, with Odisei and a
Noncompetition Agreement, dated as of the Closing Date, with 8x8 (the agreements
collectively, the "EMPLOYMENT, STOCK RESTRICTION AND NONCOMPETITION
AGREEMENTS"), each in the forms attached as Exhibit C hereto;
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WHEREAS, concurrently with the execution of this Agreement, as a
material inducement to the Shareholders to enter into this Agreement, (i) the
Shareholders, 8x8 and the Escrow Agent, as defined in Section 2.4(b) are
entering into an Escrow Agreement (the "ESCROW AGREEMENT") in the form of
Exhibit D hereto; and (ii) the Security Holders and 8x8 are entering into a Tax
Escrow agreement ("TAX ESCROW AGREEMENT") in the form attached hereto as Exhibit
E; and (iii) 8x8 and the Security Holders are entering into a Registration
Rights Agreements (the "REGISTRATION RIGHTS AGREEMENT") in the form of Exhibit F
hereto.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the parties hereto agree as
follows:
ARTICLE I
1.1 CERTAIN DEFINED TERMS. As used in this Agreement, in addition to
the terms defined elsewhere in the Agreement (including in the Recitals), the
following terms will have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"BANK DOCUMENTS" means the bank agreements, credit agreements, loan
documents, guarantees, subordination agreements or other contracts or documents,
or Contractual Obligations, to which Odisei is a party that relate to
indebtedness of $10,000 or more.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of
any note, bond or security issued by such Person or of any mortgage, indenture,
deed of trust, lease, license, franchise, contract, agreement, instrument or
undertaking to which such Person is a party or to which it or any of its
property or assets is subject.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the SEC promulgated from
time to time thereunder.
"FRENCH GAAP" means generally accepted accounting principles in
France.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other) or other security agreement of any kind
or nature whatsoever (including, without limitation, any conditional sale or
other title retention agreement or any financing lease having substantially the
same economic effect as any of the foregoing).
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"MATERIAL ADVERSE EFFECT" (i) as used with respect to Odisei means a
material adverse effect on the following: (A) the business, operations, property
or condition (financial or other) of Odisei as a whole or (B) the ability of
Odisei to consummate the transactions contemplated by this Agreement or the
Related Agreements or perform its obligations hereunder or thereunder or (C) the
ability of 8x8 to exercise its rights under this Agreement or the Related
Agreements or as a shareholder of Odisei; provided that none of the following
shall be deemed by itself or by themselves, either alone or in combination, to
constitute a Odisei Material Adverse Effect: (1) a failure in itself, but not
any cause thereof, of Odisei results of operations to meet any internal or
external predictions, projections, estimates or expectations and (2) conditions
affecting the voice over IP, as a whole and (ii) as used with respect to 8x8
means a material adverse effect on the following: (A) the business, operations,
property or condition (financial or other) of 8x8 taken as a whole or (B) the
ability of 8x8 to consummate the transactions contemplated by this Agreement or
the Related Agreements or perform their obligations hereunder or thereunder or
(C) the ability of Odisei to exercise its rights under this Agreement or the
Related Agreements.
"ODISEI AFFILIATES" will mean the directors and officers of Odisei.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
limited liability company, Governmental Authority or other entity of whatever
nature.
"RELATED AGREEMENTS" means collectively each agreement entered into
by 8x8 and Odisei in connection with this Agreement, including without
limitation the Employment, Stock Restriction and Noncompetition Agreements, the
Loan and Stock Restriction Agreements, the Stock Restriction Agreement, dated as
of May ___, 1999 between 8x8 and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the Escrow Agreement, the
Registration Rights Agreement and the Tax Escrow Agreement.
"REQUIREMENT(S) OF LAW" means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"SEC" means the Securities and Exchange Commission.
"SEC DOCUMENTS" means each statement or report filed by 8x8 under the
Exchange Act, each registration statement (including amendments thereto), and
any other document filed by Odisei or any of its Subsidiaries with the SEC
pursuant to the Securities Act or the Exchange Act, including all schedules and
Company-prepared exhibits thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations of the SEC promulgated from time to
time thereunder.
"SECURITY HOLDERS' EXPENSES" means: (i) all broker, advisory and
legal fees and expenses incurred by the Security Holders as a result of the
Share Exchange regardless of whether
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Odisei or the Security Holders are directly obligated by contract to pay such
fees and (ii) any stock transfer tax and notarial fees required or assessed upon
transfer of French securities.
"SHARE EXCHANGE" shall have the meaning set forth in Section 2.1.
"SUBSIDIARY" means, as to any Person, a corporation of which shares
of stock having ordinary voting power (other than stock having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.
"TAX" OR "TAXES" mean, with respect to any Person, net income, gross
income, gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, transfer,
occupation, premium, property or windfall profit tax, custom duty, capital
gains, inheritance tax, excise duty, national insurance, social security, pay as
you earn, stamp duty, franchise, property, or other tax, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest and any penalty, addition to tax or additional amount imposed by any
jurisdiction or other taxing authority (federal, state, local or foreign) on
such Person.
1.2 OTHER DEFINITIONS. The capitalized terms used in this Agreement
and not defined in Section 1.1 are defined elsewhere in this Agreement.
ARTICLE II
EXCHANGE OF SHARES
2.1 THE SHARE EXCHANGE. At the Closing (as defined in Section 2.2)
and subject to and upon the terms and conditions of this Agreement, the Security
Holders shall deliver to 8x8 the Odisei Shares, constituting all but six shares
of the outstanding capital stock of Odisei in exchange for shares of 8x8 Common
Stock (the "SHARE EXCHANGE") described below.
2.2 CLOSING; CLOSING DATE. Unless this Agreement is earlier
terminated pursuant to Article IX, the closing of the Share Exchange (the
"CLOSING") will take place as promptly as practicable, but no later than five
(5) business days following satisfaction or waiver of the conditions set forth
in Article VIII, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Professional Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, unless
another place or time is agreed to in writing by 8x8 and Odisei. The date upon
which the Closing actually occurs is herein referred to as the "CLOSING DATE."
2.3 EXCHANGE OF ODISEI SHARES. Subject to the terms and conditions of
this Agreement, at the Closing, each of the Odisei Shares issued and outstanding
to the Security Holders immediately prior to the Closing Date will be exchanged
for 4.0 shares of 8x8 Common Stock (the "EXCHANGE RATIO"), subject to
proportionate adjustment if the number of Odisei Shares to be exchanged is
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greater or less than 716,994 at Closing such that, subject to the provisions
contained in this Section 2.3, the number of 8x8 Shares issued at the Closing
shall equal 2,867,976. Notwithstanding the foregoing, if the average of the
closing prices of 8x8's Common Stock as quoted on the Nasdaq National Market
System for the thirty (30) trading days immediately preceding the Closing Date
(the "AVERAGE CLOSING PRICE") is greater than $5.625 or less than $3.75, then
the total number of shares of 8x8 Common Stock to be issued in the Share
Exchange shall equal a number of shares equal to the product of (i) the
"ADJUSTED OWNERSHIP PERCENTAGE," as defined below, and (ii) the number of shares
of 8x8 Common Stock outstanding after the consummation of the Share Exchange,
and the Exchange Ratio would be adjusted accordingly.
As used herein, if the Average Closing Price is greater than $5.625,
the Adjusted Ownership Percentage shall equal to $13,603,234 divided by the
valuation of 8x8 as determined by the number of shares of 8x8 Common Stock
outstanding prior to the Share Exchange, which number is 15,425,752, multiplied
by the Average Closing Price. If the Average Closing Price is less than $3.75,
the Adjusted Ownership Percentage shall equal to $9,068,823 divided by the
valuation of 8x8 as determined by the number of shares of 8x8 Common Stock
outstanding prior to the Share Exchange, which number is 15,425,752, multiplied
by the Average Closing Price.
For example, if the Average Closing Price is $6.00, the Adjusted
Ownership Percentage would equal $13,603,234 divided by (15,425,752)($6.00), or
14.7%. The number of shares to be issued would equal 14.7% of the number of
shares of 8x8 Common Stock which would be outstanding after the Share Exchange.
The number of shares to be issued would therefore equal 2,657,843 and the
Exchange Ratio would equal 2,657,843 divided by the number of Odisei Shares
outstanding immediately prior to the Share Exchange.
The shares of 8x8 Common Stock to be issued pursuant to this Section
2.3 is referred to herein as the "8X8 SHARES."
2.4 OUTSTANDING BSPCE. Immediately after the Closing, there will be
38,600 BSPCE of Odisei outstanding (the "OUTSTANDING BSPCE") held by the persons
and in such amounts as set forth on Section 2.4 of the Exceptions Letter. On
March 1, 2000, 8x8 shall exchange 8x8 Shares for outstanding Odisei Shares
issued upon exercise of the Outstanding BSPCE prior to March 1, 2000 at the
Exchange Ratio.
2.5 DELIVERY OF 8X8 COMMON STOCK. The 8x8 Common Stock to be issued
pursuant to the Share Exchange shall be delivered as follows.
(a) Security Holders. Ninety percent (90%) of the 8x8 Shares (the
"CLOSING SHARES") shall be delivered to the Security Holders in such
denominations as set forth on Exhibit A hereto.
(b) Indemnification Shares. Ten percent (10%) of the 8x8 Shares
(the "INDEMNIFICATION SHARES") shall be delivered into an escrow fund on behalf
of the Shareholders only (the "ESCROW FUND") issued in the name of the Escrow
Agent, to secure the indemnification obligations of the Shareholders set forth
in Article X. The Indemnification Shares shall be delivered
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to the Shareholders out of the Escrow Fund in accordance with the Escrow
Agreement and in such denominations as set forth on Exhibit A hereto.
2.6 FRACTIONAL SHARES. No fractional shares of 8x8 Common Stock shall
be issued and such fractional interests shall not entitle the owner thereof to
vote. In lieu of any fractional share, each holder of Odisei Shares who would
otherwise be entitled to receive a fraction of a share of 8x8 Common Stock will
be entitled to receive from 8x8 an amount of cash, without interest, equal to
the Average Closing Price multiplied by the fraction of share of 8x8 Common
Stock to which such holder would otherwise be entitled.
2.7 ADJUSTMENTS FOR CAPITAL CHANGES. If on or after the date of this
Agreement, but on or prior to Closing, 8x8 recapitalizes through a stock split,
reverse stock split, or reorganizes, reclassifies or otherwise changes its
outstanding shares into the same or a different number of shares of other
classes, or declares a dividend on its outstanding shares payable in shares or
securities convertible into shares, the total number of shares of 8x8 Common
Stock to be exchanged for Odisei Shares will be adjusted appropriately so as to
maintain the proportionate interests of the Security Holders.
2.8 EFFECTS OF THE TRANSACTION. Subsequent to the Closing, Odisei
shall be a majority owned Subsidiary of 8x8 and shall own all but six shares of
Odisei.
ARTICLE III
EXCHANGE OF CERTIFICATES
3.1 EXCHANGE. At the Closing, 8x8 will deliver share certificates
registered in the names of the Security Holders or the Escrow Agent, as provided
in Section 2.4, for the number of shares of 8x8 Common Stock to be delivered to
the Security Holders and Escrow Agent pursuant to Section 2.3, as adjusted if
applicable pursuant to Section 2.6. Each of the Security Holders shall deliver
to 8x8 duly completed and executed transfer forms ("ORDRE DE MOUVEMENT") made in
favor of 8x8.
3.2 NO FURTHER OWNERSHIP RIGHTS IN ODISEI SHARES. All 8x8 Common
Stock delivered in exchange for Odisei Shares in accordance with the terms
hereof shall be deemed to have been delivered in full satisfaction of all rights
pertaining to such shares of Odisei Shares.
3.3 LEGENDS. The Security Holder understands that the Shares, and any
securities issued in respect thereof or exchange therefor, may bear one or all
of the following legends:
(a) For non-U.S. persons: "THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE HOLDER HEREOF MAY NOT ENGAGE IN
HEDGING TRANSACTIONS WITH RESPECT TO THESE SECURITIES, NOR MAY THESE SECURITIES
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF COMPLIANCE
WITH REGULATION S UNDER
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THE ACT, A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) For U.S. persons: "THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS AND ODISEI
Subject to the exceptions set forth in the letter delivered by Odisei
and the Security Holders to 8x8 concurrently herewith (the "EXCEPTIONS LETTER")
attached hereto as Exhibit G, Odisei and the Shareholders (including in the term
"Shareholder" for the purposes of this Article IV the Other Holders, but only on
behalf of themselves and not for Odisei or any other party hereto, and only with
respect to Sections 4.2(b), 4.3, 4.4(b), 4.5, 4.6, 4.21, 4.29, 4.30, 4.31 and
4.32) represent and warrant to 8x8, as of the date hereof and as of the Closing
Date, that:
4.1 DUE ORGANIZATION. Odisei is (i) duly organized and validly
existing under the laws of France and (ii) duly qualified as a foreign
corporation under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to qualify as a foreign
corporation would not in the aggregate with all such other failures, have a
Material Adverse Effect. Odisei has the corporate power and authority and the
legal right to own and operate its property, to lease the property it operates
as lessee and to conduct its business as now being conducted and as proposed to
be conducted, except to the extent the failure to have such power, authority or
legal right would not, in the aggregate with all such other failures, have a
Material Adverse Effect. Complete and correct copies of the charter documents
("STATUTS"), as attached hereto as Exhibit H, of Odisei, as amended to date,
have been delivered to 8x8. Odisei is not in default in the performance,
observance or fulfillment of any provision of its Statuts.
4.2 AUTHORITY
(a) Odisei has all requisite power and authority to enter into
this Agreement and any Related Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and any Related Agreements to which Odisei is a party
and the consummation of the transactions contemplated hereby and thereby
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have been duly authorized by all necessary corporate action on the part of
Odisei, and no further action is required on the part of Odisei or the Security
Holders to authorize the Agreement, any Related Agreements to which Odisei is a
party and the transactions contemplated hereby and thereby. This Agreement and
the Related Agreements to which Odisei is a party have been unanimously approved
by the Board of Directors of Odisei. This Agreement and any Related Agreements
to which Odisei is a party have been duly executed and delivered by Odisei, and,
assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute the valid and binding obligation of Odisei,
enforceable in accordance with their respective terms, subject to the laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and to rules of law governing specific performance, injunctive relief or other
equitable remedies.
(b) Each of the Security Holders has all requisite power and
authority to enter into this Agreement and any Related Agreements to which it is
a party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and any Related Agreements to which
each Security Holder is a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of such Security Holder, and no further action is required on
the part of such Security Holder to authorize the Agreement, any Related
Agreements to which it is a party and the transactions contemplated hereby and
thereby. This Agreement and any Related Agreements to which such Security Holder
is a party have been duly executed and delivered by the such Security Holder,
and, assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute the valid and binding obligation of such Security
Holder, enforceable in accordance with their respective terms, subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and to rules of law governing specific performance, injunctive relief or
other equitable remedies.
4.3 GOOD TITLE. Upon delivery to 8x8 of each share transfer form
("ORDRE DE MOUVEMENT"), duly executed by each of the Security Holders in
substantially the form of a draft of which is attached hereto as Exhibit I, at
the Closing the Odisei Shares will be duly and validly authorized and issued,
fully paid and nonassessable and 8x8 will be the owner of the Odisei Shares free
and clear of any adverse encumbrances or claims.
4.4 CAPITALIZATION.
(a) As of the date hereof, the issued and outstanding share
capital of Odisei consists of 564,000 shares. All of such shares are held by the
Shareholders in such amounts as set forth in Exhibit A-1 hereto and are duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights created by statute, the STATUTS of Odisei or any agreement to
which Odisei is a party or by which it is bound and have been issued in
compliance with all Requirements of Law. There are no declared or accrued unpaid
dividends with respect to any shares of Odisei's Stock. Odisei has no other
capital stock issued or outstanding. 191,600 shares only of Odisei have been
authorized for issuance to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the Other Holder prior to the
Closing.
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(b) Except as set forth in Section 4.4(b) of the Exceptions
Letter, there are no options, warrants, calls, rights, commitments or agreements
of any character, written or oral, to which Odisei is a party or by which it is
bound obligating Odisei to issue, deliver, sell, repurchase or redeem, or cause
to be issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of Odisei or obligating Odisei to grant, extend, accelerate the
vesting of, change the price of, otherwise amend or enter into any such option,
warrant, call, right, commitment or agreement. The parties hereto acknowledge
that immediately prior to the Closing, the holders of BSPCE listed on Exhibit
A-2 shall enter into the Loan and Stock Restriction Agreement pursuant to which,
among other things, 8x8 will loan to each of such holders sufficient funds to
exercise the BSPCE for an aggregate amount of 77,200 Odisei shares (the "BSPCE
SHARES"). In addition, prior to the Closing, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ will receive
75,800 Odisei shares (the "PITTELOUD SHARES"; the BSPCE Shares and Pitteloud
Shares collectively, the "ADDITIONAL SHARES"), in satisfaction of a loan to
Odisei so that immediately prior to the Closing, the outstanding share capital
of Odisei will consist of 717,000 shares. At the Closing, the Additional Shares
will be duly authorized, validly issued, fully paid and non-assessable and will
not be subject to preemptive rights created by statute, the Statuts or any
agreement to which Odisei is a party or by which it is bound and will be issued
in compliance with all Requirements of Law. Immediately after the Share
Exchange, Odisei shall have seven shareholders, each of whom is listed in
Schedule 4.4(b) of the Exceptions Letter. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or other similar rights
with respect to Odisei. There are no voting trusts, proxies, or other agreements
or understandings with respect to the voting stock of Odisei. As a result of the
Share Exchange, 8x8 will be the sole record and beneficial owner of all
outstanding Odisei capital stock except for six shares and all rights to acquire
or receive any Odisei capital stock, whether or not such Odisei capital stock is
outstanding.
4.5 NO CONFLICT. Except as set forth in Section 4.5 of the Exceptions
Letter, neither the execution, delivery or performance by the Security Holders
and Odisei of this Agreement or any Related Agreement nor the consummation of
the transactions contemplated hereby and thereby and compliance by the Security
Holders and Odisei with any of the provisions hereof and thereof will (a)
require any consent, approval or notice under, violate, conflict with, or result
in a breach of any provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration, or result in the creation of
any Lien upon any of the properties or assets of Odisei under, any of the terms,
conditions or provisions of (i) the Articles of Association or Bylaws of Odisei;
(ii) any Bank Document or (iii) any Contractual Obligation of Odisei, except
with respect to any or all of (i), (ii) or (iii) (other than with respect to any
Bank Document or the loan documents and the transactions contemplated thereby)
(A) to the extent the failure to obtain any such consent or approval or to give
any such notice would not have a Material Adverse Effect, and (B) for such
violations, conflicts, breaches or defaults which would not, in the aggregate
with all other such failures, violations, conflicts, breaches and defaults,
terminations, accelerations and creations of liens, have a Material Adverse
Effect or (b) assuming compliance with the Requirements of Law applicable to
8x8, violate any Requirement of Law applicable to Odisei, the violation of which
would, in the aggregate with all other such violations, have a Material Adverse
Effect. Without limiting the foregoing, Section 4.5 of the Exceptions Letter
sets forth a
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complete description, including the financial consequences to Odisei, of any
rights, benefits or payments which may arise or be accelerated with respect to
employees, directors, officers or consultants of Odisei or with respect to any
other Person as a result of the consummation of the transactions contemplated
hereby.
4.6 THIRD PARTY CONSENTS. Except as set forth on Section 4.6 of the
Exceptions Letter, no consent, spousal consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local,
tribal or other foreign governmental authority, instrumentality, agency or
commission ("GOVERNMENTAL ENTITY") or any third party, including a party to any
agreement with Odisei is required by or with respect to Odisei or the Security
Holders in connection with the execution and delivery of this Agreement and any
Related Agreements to which Odisei or the Security Holders is a party or the
consummation of the transactions contemplated hereby and thereby. There is no
fact or circumstance relating to Odisei or Security Holders which would prevent
Odisei from obtaining any such required consent, waiver, approval, order, or
authorization following the Closing.
4.7 FINANCIAL STATEMENTS. Section 4.7 of the Exceptions Letter sets
forth Odisei's audited consolidated balance sheet as of September 30, 1998 and
the related audited consolidated balance sheet and statements of income and cash
flow for the twelve-month period ended September 30, 1998 (the "YEAR-END
FINANCIALS"), accompanied by the notes and the certificate of
PricewaterhouseCoopers LLP, independent certified public accountants, and
Odisei's unaudited balance sheet as of May 3, 1999 (the "LATEST BALANCE SHEET"),
and the related unaudited statements of income and cash flow for that period
(the "INTERIM FINANCIALS"). The Year-End Financials, Latest Balance Sheet and
the Interim Financials (collectively, the "FINANCIAL STATEMENTS") are true and
correct in all material respects and have been prepared in accordance with
French GAAP applied on a basis consistent throughout the periods indicated and
consistent with each other. The Year-End Financials present fairly the
consolidated financial condition and consolidated operating results of Odisei
and any consolidated subsidiaries as of the dates and during the periods
indicated therein. The Latest Balance Sheet and Interim Financials have been
prepared on a basis consistent with the audited financials and present fairly
the consolidated financial condition and consolidated operating results of
Odisei as of the dates and for the periods indicated therein, subject to normal
year end audit adjustments and accruals. Odisei does not have any liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of
any type, whether accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in financial statements in accordance
with French generally accepted accounting principles), which (i) has not been
reflected in the Latest Balance Sheet, or (ii) has not arisen in the ordinary
course of business consistent with past practices since May 3, 1999.
4.8 ABSENCE OF CERTAIN CHANGES. Except for the transactions
contemplated hereby and except as set forth in Section 4.8 of the Exceptions
Letter, since the date of the Latest Balance Sheet, Odisei has conducted its
business only in the ordinary and usual course and there has not been:
(a) any change in the financial condition, properties, assets,
liabilities or operations of Odisei which change by itself or in conjunction
with all other such changes, whether or
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not arising in the ordinary course of business, has had or can reasonably be
expected to have a Material Adverse Effect on Odisei;
(b) any development, event or condition or combination of
developments, events or conditions relating to Odisei of which Odisei or the
Security Holders have knowledge which may result in a Material Adverse Effect;
(c) any damage, destruction or loss, whether covered by insurance
or not, materially and adversely affecting the properties or business of Odisei
taken as a whole;
(d) any declaration, setting aside or payment of any dividend in
respect of the of Odisei Shares or any redemption or acquisition of such share
interests by Odisei or other distribution of the assets of Odisei;
(e) any termination of key employees, other material disputes
involving employees of Odisei or, to Odisei's and the Security Holders'
knowledge of any labor organization activity;
(f) any change of accounting principles, practices or methods of
Odisei;
(g) other than sales or other dispositions in the ordinary course
of business, any sale, mortgage, pledge, subjection to Lien or other disposition
of assets of Odisei which, individually or in any series of related
transactions, have a value in excess of $10,000;
(h) any amendment or termination of a material contract or
agreement to which Odisei is a party, the effect of which is adverse to Odisei,
taken as a whole;
(i) any issuance of securities of Odisei;
(j) any increase in the compensation or severance arrangements
payable or to become payable by Odisei to any of their directors, officers or
key employees other than increases in the ordinary course of business consistent
with prior practice;
(k) any adoption of, or increase in, any bonus, incentive
compensation, share option plan and any adoption of, or increase in any pension,
profit sharing, or retirement, insurance, medical reimbursement or other
employee benefit plan, any employment agreement or severance arrangement or any
payment or arrangement made to, for or with any officers or key employees of
Odisei, other than increases made in the ordinary course of business consistent
with prior practice; or
(l) except as specifically contemplated by this Agreement, any
agreement by Odisei to take any action described in this Section 4.8.
4.9 NO SUBSIDIARIES. Odisei does not have any branch or Subsidiaries
or any equity interest, direct or indirect, in any corporation, partnership,
joint venture or other business entity.
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4.10 LEGAL PROCEEDINGS. There is no action, suit, claim or proceeding
of any nature pending, or, to Odisei's or the Security Holders' knowledge,
threatened, (a) against Odisei, its activities, properties (tangible or
intangible) or any of its officers, directors or employees of Odisei in
connection with such officer's, director's or employee's relationship with, or
actions taken on behalf of, Odisei, or (b) that seeks to prevent, enjoin, alter
or delay the transactions contemplated by this Agreement, nor, to the knowledge
of Odisei or the Security Holders, is there any reasonable basis therefor. To
Odisei's or the Security Holders' knowledge, there is no investigation pending
or threatened against Odisei, its properties or any of its officers or directors
(nor, to the best knowledge of Odisei or the Security Holders, is there any
reasonable basis therefor) by or before any Governmental Entity. No Governmental
Entity has within the last five (5) years initiated any formal proceeding which
challenges the legal right of Odisei to conduct its operations as presently or
previously conducted. Odisei is not a party to or subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. Except as set forth on Section 4.10 of the Exceptions
Letter, Odisei has not initiated any action, suit, claim or proceeding of any
nature.
4.11 CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY REQUIREMENTS.
Odisei has complied with each Requirement of Law promulgated by any Governmental
Authority applicable to the operation, conduct or ownership of the property or
business of Odisei (including, without limitation, those relating to the
offering and sale of securities, occupational safety and health, equal
employment practices. antitrust, consumer protection and employee benefits and
pensions), except where such failure to comply with any such Requirement of Law
would not reasonably be expected to have, in the aggregate with all such
failures, a Material Adverse Effect.
4.12 PROPERTIES: LIENS AND ENCUMBRANCES. Except as set forth in
Section 4.12 of the Exceptions Letter, Odisei has no real properties (except for
leasehold interests, in which event the entity directly holding such interest
has a valid leasehold interest) and has marketable title to its other properties
and assets material to the business of Odisei taken as a whole, subject only to
(a) statutory Liens arising or incurred in the ordinary course of business with
respect to which the underlying obligations are not delinquent or the validity
of which is being, contested in good faith by appropriate proceedings, (b) Liens
for Taxes not yet delinquent or the validity of which is being contested in good
faith by appropriate proceedings, (c) Liens to secure any indebtedness reflected
on the Latest Balance Sheet, (d) property or assets acquired subject to Liens
since the date of the Latest Balance Sheet, (e) Liens and defects in title that
are not in the aggregate material to the business, operations or condition
(financial or other) of Odisei taken as a whole and (f) Liens reflected in
Section 4.12 of the Exceptions Letter. The tangible personal property owned,
leased or rented by Odisei and the intangible personal property owned or
licensed by Odisei constitute all of the material property now used in, and
necessary for the conduct of, the business of Odisei in the manner and to the
extent presently conducted. All of the fixed assets and properties listed on the
Latest Balance Sheet, or thereafter acquired or currently used by Odisei, are in
good operating condition in all material respects and are free from any material
defect.
4.13 INSURANCE. Odisei has maintained in full force and effect, with
all premiums due thereon paid, such policies of insurance and bonds in such
amounts and against such risks and losses
-12-
18
which are disclosed in Section 4.13 of the Exception Letter, as are generally
maintained with respect to comparable businesses and properties. Except as set
forth in Section 4.13 of the Exceptions Letter, Odisei does not pay for or own
any "key man" insurance on the life of any employee. Set forth in Section 4.13
of the Exceptions Letter is a true and complete list of all insurance policies
carried by Odisei at any time during the past twelve (12) months with respect to
the business, assets and operations of Odisei, together with, in respect of each
policy, the name of the insurer, the number of the policy, the annual policy
premium payable therefor, the limits of coverage, the deductible amounts, if
any, the expiration date, and each pending claim thereunder, if any. Complete
and correct copies of each current policy have been delivered to 8x8, and each
policy shown as current is on the date hereof in full force and effect.
4.14 INTELLECTUAL PROPERTY.
(a) For the purposes of this Agreement, the following terms have
the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the
following, in any form and embodied in any media, (i) works of authorship
including, without limitation, computer programs, source code and executable
code, whether embodied in software, firmware or otherwise, documentation,
designs, files, records, data and mask works, (ii) inventions (whether or not
patentable), improvements, and technology, (iii) proprietary and confidential
information, trade secrets and know how, (iv) databases, data compilations and
collections and technical data, (v) logos, trade names, trade dress, trademarks
and service marks, (vi) domain names, web addresses and sites, and (vii) tools,
methods and processes.
"INTELLECTUAL PROPERTY RIGHTS" shall mean worldwide common
law and statutory rights associated with (i) patents and patent applications,
(ii) copyrights, copyrights registrations and copyrights applications and
"moral" rights, (iii) the protection of trade and industrial secrets and
confidential information, (iv) other proprietary rights relating to intangible
intellectual property, (v) trademarks, trade names and service marks, (vi)
analogous rights to those set forth above, and (vii) divisions, continuations,
renewals, reissuances and extensions of the foregoing (as applicable) now
existing or hereafter filed, issued or acquired.
"ODISEI INTELLECTUAL PROPERTY" shall mean any Intellectual
Property and Intellectual Property Rights that are owned by or exclusively
licensed to Odisei.
"REGISTERED INTELLECTUAL PROPERTY RIGHTS" shall mean
Intellectual Property Rights that have been registered, filed, certified or
otherwise perfected by recordation with any state, government or other public
legal authority.
(b) Section 4.14(b) of the Exceptions Letter lists all Registered
Intellectual Property owned by, or filed in the name of, Odisei and lists any
proceedings or actions before any court, tribunal (including the United States
Patent and Trademark Office (the "PTO") or equivalent authority anywhere in the
world) related to any of the Registered Intellectual Property.
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(c) Each item of Odisei Intellectual Property, including all
Registered Intellectual Property listed in Section 4.14(b) of the Exceptions
Letter and, to the best knowledge of Odisei and the Security Holders, all
Intellectual Property licensed to Odisei, is free and clear of any Liens or
other encumbrances. Odisei is the exclusive owner of all Odisei Intellectual
Property.
(d) To the extent that any Intellectual Property has been
developed or created independently or jointly by any person other than Odisei
for which Odisei has, directly or indirectly, paid, Odisei has a written
agreement with such person with respect thereto, and Odisei thereby has obtained
ownership of, and is, to the best knowledge of Odisei and the Security Holders,
the exclusive owner of, all such Intellectual Property and associated
Intellectual Property Rights by operation of law or by valid assignment.
(e) Odisei has not transferred ownership of or granted any
license of or right to use or authorized the retention of any rights to use any
Intellectual Property or Intellectual Property Rights that is or was Odisei
Intellectual Property, to any other person, except as provided in Section
4.14(g) below.
(f) Except as provided in Section 4.14(f) of the Exceptions
Letter, Odisei Intellectual Property constitutes all the Intellectual Property
and Intellectual Property Rights used in and/or, to the best knowledge of Odisei
and the Security Holders, necessary to the conduct of the business of Odisei as
it currently is conducted, planned or is reasonably contemplated to be
conducted, including, without limitation, the design, development, manufacture,
use, import and sale of products, technology and services (including products,
technology or services currently under development). Odisei has valid licenses
to all software owned by third parties that is used in and/or, to the best
knowledge of Odisei and the Security Holders, necessary to the operation of
Odisei's products as they are currently used, and Odisei is not in default with
respect to any such license.
(g) Other than "shrink-wrap" and similar widely available
third-party commercial end-user licenses, the contracts, licenses and agreements
listed in Section 4.14(g) of the Exceptions Letter include all contracts,
licenses and agreements to which Odisei is a party with respect to any
Intellectual Property and Intellectual Property Rights. No person who has
licensed Intellectual Property or Intellectual Property Rights to Odisei has
ownership rights or license rights to improvements made by Odisei in such
Intellectual Property which has been licensed to Odisei.
(h) Section 4.14(h) of the Exceptions Letter lists all contracts,
licenses and agreements between Odisei and any other person wherein or whereby
Odisei has agreed to, or assumed, any obligation or duty to warrant, indemnify,
reimburse, hold harmless, guaranty or otherwise assume or incur any obligation
or liability or provide a right of rescission with respect to the infringement
or misappropriation by Odisei or such other person of the Intellectual Property
Rights of any person other than Odisei.
(i) To the best knowledge of Odisei and the Security Holders, the
operation of the business of Odisei as it currently is conducted or is
reasonably contemplated to be conducted, including but not limited to the
design, development, use, import, manufacture and sale of the products,
technology or services (including products, technology or services currently
under
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development) does not infringe or misappropriate the Intellectual Property
Rights of any person, violate the rights of any person (including rights to
privacy or publicity), or constitute unfair competition or trade practices under
the laws of any jurisdiction, and Odisei has not received written notice from
any person claiming that such operation or any act, product, technology or
service (including products, technology or services currently under development)
of Odisei infringes or misappropriates the Intellectual Property Rights of any
person or constitutes unfair competition or trade practices under the laws of
any jurisdiction (nor to the knowledge of Odisei and the Security Holders is
there any reasonable basis therefor).
(j) Each item of Registered Intellectual Property is valid and
subsisting, and all necessary registration, maintenance and renewal fees in
connection with such Registered Intellectual Property have been paid and all
necessary documents and certificates in connection with such Registered
Intellectual Property have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign jurisdictions, as
the case may be, for the purposes of maintaining such Registered Intellectual
Property. There are no actions that must be taken by Odisei within sixty (60)
days of the scheduled Closing Date, including the payment of any registration,
maintenance or renewal fees or the filing of any documents, applications or
certificates for the purposes of maintaining, perfecting or preserving or
renewing any Registered Intellectual Property. In each case in which Odisei has
acquired any Intellectual Property rights from any person, Odisei has obtained a
valid and enforceable assignment sufficient to irrevocably transfer all rights
in such Intellectual Property and the associated Intellectual Property Rights
(including the right to seek past and future damages with respect thereto) to
Odisei and, to the maximum extent provided for by, and in accordance with,
applicable laws and regulations, Odisei has recorded each such assignment with
the relevant governmental authorities, including the PTO, the U.S. Copyright
Office, or their respective equivalents in any relevant foreign jurisdiction, as
the case may be.
(k) There are no contracts, licenses or agreements between Odisei
and any other person with respect to Odisei Intellectual Property under which
there is any dispute known to Odisei or the Security Holders regarding the scope
of such agreement, or performance under such agreement including with respect to
any payments to be made or received by Odisei thereunder.
(l) To the knowledge of Odisei and the Security Holders, no
person is infringing or misappropriating any Odisei Intellectual Property.
(m) Odisei has taken all commercially reasonable steps in order
to protect Odisei's rights in confidential information and trade secrets of
Odisei or provided by any other person to Odisei. All current and former
employees, consultants and contractors of Odisei who have or have had access to
confidential, proprietary or trade secret information of Odisei ("RECIPIENTS")
have entered proprietary information, confidentiality and assignment of
inventions agreements with Odisei. Section 4.14(m) of the Exceptions Letter
contains a list of all Recipients indicating those who have signed the
agreements and those who have not entered such agreements and the form of each
such agreement.
(n) No Odisei Intellectual Property, Intellectual Property Rights
or service of Odisei is subject to any proceeding or outstanding decree, order,
judgment, agreement or stipulation
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that restricts in any manner the use, transfer or licensing thereof by Odisei or
may affect the validity, use or enforceability of such Odisei Intellectual
Property.
(o) All of Odisei's products (including products currently under
development) will record, store, process, calculate and present calendar dates
falling on and after (and if applicable, spans of time including) January 1,
2000, and will calculate any information dependent on or relating to such dates
in the same manner, and with the same functionality, data integrity and
performance, as the products record, store, process, calculate and present
calendar dates on or before December 31, 1999, or calculate any information
dependent on or relating to such dates (collectively, "YEAR 2000 COMPLIANT").
All of Odisei's products (i) will lose no functionality with respect to the
introduction of records containing dates falling on or after January 1, 2000 and
(ii) will be interoperable with other products used and distributed by Odisei
that may deliver records to Odisei's products or receive records from Odisei's
products, or interact with Odisei's products, including but not limited to
back-up and archived data.
4.15 MATERIAL CONTRACTS. Section 4.14 of the Exceptions Letter, lists
each contract, debt instrument, lease, Bank Document, employment agreement or
collective bargaining agreement now in effect to which Odisei is a party which
involves a commitment or liability in excess of $10,000 or extending for a
period of more than six (6) months (each such contract, a "MATERIAL CONTRACT").
A copy of each Material Contract has been delivered to 8x8. To the extent Odisei
is a party thereto, each of the Material Contracts is valid, binding, in full
force and effect and enforceable by Odisei in accordance with its terms, subject
to the effect of applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting enforcement of
creditors' rights and rules of laws concerning equitable remedies. Except as
otherwise described in Section 4.15 of the Exceptions Letter, Odisei is not in
default in the performance of any of its obligations under any Material
Contract, except for defaults which, in the aggregate with all such defaults,
would not have a Material Adverse Effect. To Odisei's and the Security Holders'
knowledge, except as otherwise described in the Exceptions Letter, no event has
occurred which (whether with or without notice, lapse of time or the happening
or occurrence of any other event) would constitute a default by Odisei under any
Material Contract or to Odisei's or the Security Holders' knowledge by any other
party thereto, except for defaults which in the aggregate with all such defaults
would not have a Material Adverse Effect.
4.16 CERTAIN AGREEMENTS. Except as provided in Section 4.16 of the
Exceptions Letter, Odisei is not a party to any (a) agreement with any of its
executive officers, other employees or any other Person (i) the benefits of
which are contingent, or the terms of which are materially altered, upon the
occurrence of transactions of the nature contemplated by this Agreement or any
Related Agreement, or (ii) providing severance benefits or other benefits after
the termination of employment of such employee regardless of the reason for such
termination of employment which are conditioned upon a change of control or (b)
agreement, instrument, option, warrant or plan, including, without limitation.
any share option plan, share appreciation rights plan, share purchase plan or
any other employee plan, any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the occurrence of any of
the transactions contemplated by this Agreement or any Related Agreement, or the
value of any of the benefits of which will be
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calculated on the basis of any of the transactions contemplated by this
Agreement or any Related Agreement. Odisei and the Security Holders are not
aware that any officer or key employee, or any group of key employees, intends
to terminate their employment with Odisei, and Odisei does not have a present
intention to terminate the employment of any of the foregoing. The employment of
each officer and employee of Odisei, subject to general principles related to
wrongful termination of employees, is terminable, to the best of Odisei's and
the Security Holders' knowledge, at the will of Odisei.
4.17 EMPLOYEE MATTERS. Except as set forth in Section 4.17 of the
Exceptions Letter, Odisei has no employment contract or material consulting
agreement currently in effect that is not terminable on minimum notice provided
for by French law or whose lawful termination would result in any payment to the
terminated employee greater than the minimum amounts required by French law upon
termination of an employee (other than agreements with the sole purpose of
providing for the confidentiality of proprietary information or assignment of
inventions). To the best knowledge of the Security Holders and Odisei, no
employee of Odisei is in violation of (a) any material term of any employment
contract, Intellectual Property Rights non-disclosure agreement or
noncompetition agreement or (b) any material term of any other contract or
agreement, or any restrictive covenant, relating to the right of any such
employee to be employed by Odisei or to use trade secrets or proprietary
information of others. To the best of the Security Holders' and Odisei's
knowledge the mere fact of employment of any employee of Odisei does not subject
Odisei to any liability to any third party. A list of all ongoing employees,
officers and development consultants of the Odisei and their current
compensation (salary and bonuses) is set forth in Section 4.17 of the Exceptions
Letter. Section 4.17 of the Exceptions Letter contains a list of all pension,
retirement, disability, medical, dental or other health plans, life insurance or
other death benefit plans, profit sharing, deferred compensation agreements,
stock, option, bonus or other incentive plans, vacation, sick, holiday or other
paid leave plans, severance plans or other similar employee benefit plans
maintained by Odisei (the "EMPLOYEE PLANS"). Each of the Employee Plans, and
their administration, is, in all material respects, in compliance with all
applicable national, municipal, local and other governmental laws and
ordinances, orders, rules and regulations and Odisei is in full compliance with
the terms of all of the Employee Plans. All contributions due have been made or
accrued on the Financial Statements with respect to any pension or profit
sharing plan maintained by Odisei except those contributions accruing after the
latest Balance Sheet in the ordinary course.
4.18 LABOR MATTERS. There is no union at Odisei or, to the knowledge
of Odisei and the Security Holders, any ongoing efforts to establish a union at
Odisei.
4.19 TAXES. Odisei has filed all French and other foreign Tax and
information returns required to be filed, has paid all Taxes required to be paid
in respect of all periods for which returns have been filed, has established an
adequate accrual or reserve for the payment of all Taxes payable in respect of
all periods ending on or prior to the Latest Balance Sheet, has made all
necessary estimated Tax payments to the extent payment is due and has no
liability for Taxes in excess of the amount so paid or accruals or reserves so
established in the Financial Statements, except with respect to transactions
occurring after the Latest Balance Sheet. True and complete copies of all such
Tax and information returns requested by 8x8 have been provided by Odisei to
8x8. Odisei is not
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delinquent in the payment of any Tax or in the filing of any Tax returns, and no
deficiencies for any Tax have been threatened, claimed, proposed or assessed
which have not been settled or paid. No Tax returns of Odisei have ever been
audited by the French tax authorities or any provincial taxing agency or
authority. Odisei will not incur any stamp duty tax or other similar tax or
charge imposed by the French taxing authorities as a result of the Share
Exchange.
4.20 OTHER TRANSACTIONS. Except for the transactions contemplated
with 8x8 pursuant to this Agreement, Odisei (i) has not reached agreement for
the acquisition of all or any portion of the assets or share interests
(currently outstanding or to be issued) of any other entity and (ii) has not
reached agreement for the sale or acquisition of all or a substantial portion of
Odisei's assets or any portion of share interests (whether currently outstanding
or to be issued) by any other entity.
4.21 BROKERS, FINDERS, ETC. Odisei and the Security Holders have not
employed, nor are subject to the valid claim of, any broker, finder or other
financial intermediary, in connection with the transactions contemplated by this
Agreement who might be entitled to a fee or commission.
4.22 FULL DISCLOSURE. Odisei has heretofore made all of the corporate
books, corporate records, agreements and other documents of Odisei or portions
thereof relating to the transactions contemplated by this Agreement and the
Related Agreements available to 8x8 for inspection and due diligence. To the
knowledge of Odisei and the Shareholders, such corporate books and corporate
records, agreements and documents and all other documents and papers delivered
to 8x8 by or on behalf of Odisei in connection with this Agreement and the
Related Agreements and the transactions contemplated hereby and thereby, are
accurate, complete and authentic. Furthermore, to the knowledge of Odisei and
the Shareholders, the representations and warranties of Odisei and the Security
Holders in this Agreement and the Related Agreements and the information
contained in the foregoing materials and furnished to 8x8 by Odisei and the
Security Holders in connection with this Agreement and the Related Agreements
and the transactions contemplated hereby and thereby do not contain any untrue
statement of a material fact and do not omit to state any fact necessary to make
the statements made, in the context in which they are made, not false or
misleading.
4.23 ENVIRONMENTAL MATTERS. To the best of the Shareholders' and
Odisei's knowledge, during the period that Odisei has leased its properties,
there have been no disposals, releases or threatened releases of hazardous,
toxic or other dangerous materials ("HAZARDOUS MATERIALS") from or any presence
thereof on such properties which would have a Material Adverse Effect upon the
business or Financial Statements of Odisei. During the time that Odisei has
owned or leased its properties, there has been no litigation, proceeding or
administrative action brought or threatened in writing against Odisei, or any
settlement reached by Odisei with, any party or parties alleging the presence,
disposal, release or threatened release of any Hazardous Materials on, from or
under any of such properties.
4.24 INTERESTED PARTY TRANSACTIONS. No officer or director of Odisei
or Security Holder (nor any ancestor, sibling, descendant or spouse of any of
such persons, or any trust, partnership or corporation in which any of such
persons has or within the last three (3) years has had an interest), has or has
had, directly or indirectly, (i) an interest in any entity which furnished or
sold, or furnishes or sells, services, products or technology that Odisei
furnishes or sells, or proposes to furnish or sell,
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or (ii) any interest in any entity that purchases from or sells or furnishes to
Odisei any goods or services or (iii) a beneficial interest in any Contract (iv)
any amounts owed by or owed to Odisei; provided, that ownership of no more than
one percent (1%) of the outstanding voting stock of a publicly traded
corporation shall not be deemed an "interest in any entity" for purposes of this
Section 4.24.
4.25 GOVERNMENTAL AUTHORIZATION. Odisei has obtained each consent,
license, permit, grant or other authorization issued to Odisei by a Governmental
Entity (i) pursuant to which Odisei currently operates or holds any interest in
any of their properties or (ii) which is required for the operation of its
business or the holding of any such interest (herein collectively called "ODISEI
AUTHORIZATIONS"). Odisei Authorizations are in full force and effect and
constitute all Odisei Authorizations required to permit Odisei to operate or
conduct its business or hold any interest in its properties or assets.
4.26 ACCOUNTS RECEIVABLE; INVENTORY.
(a) Odisei has made available to 8x8 a list of all accounts
receivable of Odisei as of May 5, 1999 along with a range of days elapsed since
invoice.
(b) All of the accounts receivable of Odisei arose in the
ordinary course of business, are carried at values determined in accordance with
French GAAP consistently applied and are collectible except to the extent of
reserves therefor set forth in the Latest Balance Sheet. No person has any Lien
on any of such accounts receivable and no request or agreement for deduction or
discount has been made with respect to any of such accounts receivable.
(c) All of the inventories of Odisei were purchased, acquired or
produced in the ordinary and regular course of business and in a manner
consistent with Odisei's regular inventory practices and are set forth on
Odisei's books and records in accordance with the practices and principles of
Odisei consistent with the method of treating said items in prior periods. None
of the inventory of Odisei reflected on the Latest Balance Sheet or on Odisei's
books and records (in either case net of the reserve therefor) is obsolete,
defective or in excess of the needs of the business of Odisei reasonably
anticipated for the normal operation of the business consistent with past
practices and outstanding customer contracts. The presentation of inventory on
the Latest Balance Sheet conforms to French GAAP and such inventory is stated at
the lower of cost (determined using the first-in, first-out method) or net
realizable value. Except as provided in Section 4.26(c) of the Exceptions
Letter, no person has any Lien on any Inventory.
4.27 COMPLIANCE WITH LAWS. Odisei has complied with, is not in
violation of, and has not received any notices of violation with respect to, any
material foreign, federal, state, tribal or local statute, law or regulation.
4.28 WARRANTIES; INDEMNITIES. Except as provided in Section 4.28 of
the Exceptions Letter, Odisei has not given any warranties or indemnities
relating to products or technology sold or licensed or services rendered by
Odisei. There have been no warranty claims on Odisei's products or services
occurring during the past five years.
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4.29 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Odisei or the Security Holders (as modified by the Exceptions
Letter), nor any statement made in any Schedule or certificate furnished by
Odisei or the Security Holders pursuant to this Agreement, taken together,
contains or will contain at the Closing, any untrue statement of a material
fact, or omits or will omit at the Closing to state any material fact necessary
in order to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
4.30 INFORMATION REVIEWED. Odisei and the Security Holders have
received all documents that 8x8 has filed with the SEC and all press releases
issued by 8x8 in the last two (2) years.
4.31 DUE DILIGENCE. Odisei and the Security Holders have completed a
due diligence investigation of 8x8 to their satisfaction.
4.32 NON U.S. PERSON. If the address for the Security Holder shown on
Exhibit A is not within the United States, the Security Holder is not a "U.S.
Person" as that term is defined in Regulation S promulgated under the Securities
Act and is not acquiring the Shares for the account or benefit of a U.S. Person.
Under Regulation S, with certain exceptions, "U.S. person" means: (i) any
natural person resident in the U.S.; (ii) any partnership or corporation
organized or incorporated under the laws of the U.S.; (iii) any estate of which
any executor or administrator is a U.S. person; (iv) any trust of which any
trustee is a U.S. person; (v) any agency or branch of a foreign entity located
in the U.S.; (vi) any non discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person; (vii) any discretionary account or similar account
(other than an estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the U.S.; and (viii) any
partnership or corporation if: (A) organized or incorporated under the laws of
any foreign jurisdiction; and (B) formed by a U.S. person principally for the
purpose of investing in securities not registered under the Securities Act,
unless it is organized or incorporated and owned by accredited investors (as
defined in Rule 501(a) under the Securities Act) who are not natural persons,
estates or trusts.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF 8X8
Subject to the exceptions set forth in the letter delivered by 8x8 to
Odisei and the Security Holders concurrently herewith (the "8X8 EXCEPTIONS
LETTER"), attached hereto as Exhibit J, 8x8 hereby represents and warrants to
Odisei and the Security Holders, as of the date hereof and as of the Closing
Date, that:
5.1 DUE ORGANIZATION. 8x8 (i) is duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation and (ii)
the corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct its
business as now being conducted and as proposed to be conducted, except to the
extent the failure
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to have such power, authority or legal right would not, in the aggregate with
all such other failures, have a Material Adverse Effect.
5.2 CORPORATE POWER. 8x8 has all requisite corporate power and
authority to enter into and deliver this Agreement and each Related Agreement
and to perform its obligations hereunder and thereunder. 8x8 is not in default
in the performance, observance or fulfillment of any provision of its charter
documents. Complete and correct copies of the Certificate of Incorporation and
Bylaws of 8x8, as amended to date, have been delivered to Odisei and the
Security Holders. 8x8 is not in default in the performance, observance or
fulfillment of any provision of its Certificate of Incorporation or Bylaws.
5.3 CAPITALIZATION.
(a) The authorized stock of 8x8 consists of 40,000,000 shares of
Common Stock, $.001 par value, of which 15,425,752 shares were issued and
outstanding as of March 31, 1999, and 5,000,000 shares of undesignated Preferred
Stock, $0.001 par value. No shares of Preferred Stock are issued or outstanding.
All such shares have been duly authorized, and all such issued and outstanding
shares have been validly issued, are fully paid and nonassessable and are free
of any liens or encumbrances other than any liens or encumbrances created by or
imposed upon the holders thereof. As of April 1, 1999, 8x8 had 884,098 shares of
Common Stock available for issuance pursuant to its stock options plans and
500,000 shares of Common Stock available for issuance pursuant to its 1996
Employee Stock Purchase Plan.
(b) The shares of 8x8 Common Stock to be issued pursuant to the
Share Exchange will be duly authorized, validly issued, fully paid,
non-assessable, free of any liens or encumbrances and not subject to any
preemptive rights or rights of first refusal created by statute or the
Certificate of Incorporation or Bylaws of 8x8 or any agreement to which 8x8 is a
party or is bound except as provided in this Agreement and the Related
Agreements.
5.4 AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution, delivery
and performance by 8x8 of this Agreement and each Related Agreement and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all requisite corporate action. Except as otherwise
contemplated by this Agreement, no other corporate action on the part of 8x8 is
necessary for the execution, delivery and performance by 8x8, as applicable, of
this Agreement and each Related Agreement and the consummation by 8x8, as
applicable, of the transactions contemplated hereby and thereby. This Agreement
and each Related Agreement has been duly executed and delivered by 8x8, and this
Agreement and the Related Agreements constitute the legally valid and binding
obligations of 8x8, enforceable against it in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
5.5 LEGAL PROCEEDINGS. 8x8 warrants that: (a) there is no pending or,
to the best of 8x8's knowledge, threatened claim, action, lawsuit,
administrative proceeding, arbitration, labor dispute or
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governmental investigation ("LITIGATION") to which 8x8 is a party or by which
any of 8x8's material assets may be bound, which, if adversely determined, could
have a Material Adverse Effect, and (b) to 8x8's knowledge, no facts exist that
give rise to a valid claim against 8x8 for breach of an obligation, or for
violation of applicable law, rule or regulation, where such claim could have a
Material Adverse Effect. 8x8 is not subject to any judgment, order, writ,
injunction or decree of any court, arbitrator or other competent governmental or
regulatory authority. 8x8 has not been permanently or temporarily enjoined by
any order, judgment or decree of any court or other competent governmental or
regulatory authority from engaging in or continuing any conduct or practice in
connection with its business, nor requiring 8x8 to take any action of any kind
with respect to its business.
5.6 SEC FILINGS. 8x8 has filed in a timely manner all SEC Documents
required to be filed by 8x8. As of their respective dates, the SEC Documents (i)
were prepared, in all material respects, in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such SEC Documents and (ii) did
not at the time they were filed (or if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. 8x8 is
not a party to any material contract, agreement or other arrangement which was
required to have been filed as an exhibit to the SEC Documents that is not so
filed.
5.7 FULL DISCLOSURE. None of the representations or warranties made
by 8x8, nor any statement made in any schedule or certificate furnished by 8x8
pursuant to this Agreement and the Related Agreements, nor the SEC Documents,
taken together, contains or will contain at the Closing, any untrue statement of
a material fact, or omits or will omit at the Closing to state any material fact
necessary in order to make the statements contained herein or therein, in the
light of the circumstance under which they were made, not misleading.
5.8 NO CONFLICT. Neither the execution, delivery or performance by
8x8 of this Agreement or any Related Agreement nor the consummation of the
transactions contemplated hereby and thereby and compliance by 8x8 with any of
the provisions hereof and thereof will (a) require any consent, approval or
notice under, violate, conflict with, or result in a breach of any provisions
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration, or result in the creation of any Lien upon any of the properties
or assets of 8x8 under, any of the terms, conditions or provisions of (i) the
Certificate of Incorporation or Bylaws of 8x8; (ii) any Bank Document or (iii)
any Contractual Obligation of 8x8, except with respect to any or all of (i),
(ii) or (iii) (other than with respect to any Bank Document or the loan
documents and the transactions contemplated thereby) (A) to the extent the
failure to obtain any such consent or approval or to give any such notice would
not have a Material Adverse Effect, and (B) for such violations, conflicts,
breaches or defaults which would not, in the aggregate with all other such
failures, violations, conflicts, breaches and defaults, terminations,
accelerations and creations of liens, have a Material Adverse Effect or (b)
assuming compliance with the
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Requirements of Law applicable to 8x8, violate any Requirement of Law applicable
to 8x8, the violation of which would, in the aggregate with all other such
violations, have a Material Adverse Effect.
5.9 THIRD PARTY CONSENTS. No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local,
tribal or other foreign governmental authority, instrumentality, agency or
commission ("Governmental Entity") or any third party, including a party to any
agreement with 8x8 is required by or with respect to 8x8 in connection with the
execution and delivery of this Agreement and Related Agreements is a party of
the consummation of the transactions contemplated hereby and thereby except as
required to be filed with the Securities Exchange Commission. There is no fact
or circumstance relating to 8x8 which would prevent 8x8 from obtaining any such
required consent, waiver, approval, order, or authorization following the
closing.
ARTICLE VI
CONDUCT PRIOR TO THE CLOSING
6.1 CONDUCT OF BUSINESS OF ODISEI. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Closing, each of Odisei and the Security Holders agree (except
to the extent that 8x8 shall otherwise consent in writing), to carry on Odisei's
business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, to pay the debts and Taxes of Odisei when due,
to pay or perform other obligations when due, and, to the extent consistent with
such business, use their best efforts consistent with past practice and policies
to preserve intact Odisei's present business organizations, keep available the
services of Odisei's present officers and key employees and preserve Odisei's
relationships with regulators, customers, suppliers, distributors, licensors,
licensees, and others having business dealings with it, all with the goal of
preserving unimpaired Odisei's goodwill and ongoing businesses at the Closing.
Odisei shall promptly notify 8x8 of any event or occurrence or emergency not in
the ordinary course of business of Odisei and any material event involving
Odisei. Except as expressly contemplated by this Agreement or as set forth in
Section 6.1 of the Exceptions Letter, Odisei shall not, without the prior
written consent of 8x8:
(a) Make any capital expenditure or commitment exceeding $10,000
individually or $50,000 in the aggregate;
(b) Sell any Odisei Intellectual Property or enter into any
agreement with respect to Odisei Intellectual Property with any person or entity
or with respect to the Intellectual Property of any person or entity except as
previously disclosed to 8x8 in writing,
(i) buy any Intellectual Property or enter into any agreement
with respect to the Intellectual Property of any other person or entity, or
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(ii) enter into any agreement with respect to development
of any Intellectual Property with a third party except as previously disclosed
to 8x8 in writing;
(c) Transfer to any person or entity any rights to Odisei
Intellectual Property;
(d) Enter into or amend any contract pursuant to which any other
party is granted marketing, distribution, development or similar rights of any
type or scope with respect to any products or technology except as previously
disclosed to 8x8 in writing;
(e) Amend or otherwise modify (or agree to do so), except in the
ordinary course of business, or violate the terms of, any of the contracts set
forth or described in the Exceptions Letter;
(f) Commence or settle any litigation;
(g) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any of its
capital stock, or split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of capital stock of Odisei, or repurchase, redeem or
otherwise acquire, directly or indirectly, any shares of the capital stock of
Odisei (or options, warrants or other rights exercisable therefor);
(h) Issue, grant, deliver or sell or authorize or propose the
issuance, grant, delivery or sale of, or purchase or propose the purchase of,
any shares of Odisei's capital stock or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements or
commitments of any character obligating Odisei to issue or purchase any such
shares or other convertible securities except as provided in Section 6.1(h) of
the Exceptions Letter;
(i) Cause or permit any amendments to Odisei's Statuts;
(j) Acquire or agree to acquire by merging or consolidating with,
or by purchasing any assets or equity securities of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate, to Odisei's
business;
(k) Sell, lease, license or otherwise dispose of any of its
properties or assets, except as previously disclosed to 8x8 in writing;
(l) Incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any debt securities or guarantee any debt
securities of others except as disclosed in the Exceptions Letter;
(m) Grant any loans to others or purchase debt securities of
others or amend the terms of any outstanding loan agreement;
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(n) Grant any severance or termination pay (i) to any director or
officer or (ii) to any other employee except payments made pursuant to written
agreements outstanding on the date hereof and disclosed in the Exceptions
Letter;
(o) Adopt any employee benefit plan, or enter into any employment
contract, pay or agree to pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates of its employees
except salary increases pursuant to written agreements outstanding on the date
hereof and disclosed in the Exceptions Letter;
(p) Revalue any of its assets, including without limitation
writing down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business;
(q) Pay, discharge or satisfy, in an amount in excess of $10,000
in any one case or $25,000 in the aggregate, any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in the Latest Balance Sheet;
(r) Make or change any material election in respect of Taxes,
adopt or change any accounting method in respect of Taxes, enter into any
closing agreement, settle any claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes;
(s) Enter into any strategic alliance, joint marketing
arrangement or agreement, or joint venture;
(t) Other than as specifically requested in writing by 8x8,
accelerate the vesting schedule of any of the outstanding Options;
(u) Hire any employee except in replacement of a terminated
employee or except as reasonably necessary consistent with the needs of the
business of Odisei; not terminate the employment of any management level or
other key employee; or
(v) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 6.1(a) through (u) above, or any other action
that would prevent Odisei from performing or cause Odisei not to perform its
covenants hereunder.
6.2 NO SOLICITATION. Until the earlier of the Closing or the date of
termination of this Agreement pursuant to the provisions of Article IX hereof,
neither Odisei nor any of the Security Holders (nor will Odisei nor any of the
Security Holders permit any of its officers, directors, agents, representatives
or affiliates to) directly or indirectly, take any of the following actions with
any party other than 8x8 and its designees: (a) solicit, encourage, initiate or
participate in any negotiations or discussions with respect to, any offer or
proposal to acquire all, substantially all or a significant portion of Odisei's
business, properties or technologies or any portion of Odisei's capital stock
(whether or not outstanding) whether by merger , purchase of assets, tender
offer or otherwise, or effect any such transaction, (b) disclose any information
not customarily disclosed to any person
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concerning Odisei's business, technologies or properties or afford to any person
or entity access to its properties, technologies, books or records, (c) assist
or cooperate with any person to make any proposal to purchase all or any part of
Odisei's capital stock or assets, (d) enter into any agreement with any person
providing for the Share Exchange of all or any significant portion of Odisei
(whether by way of merger, purchase of assets, tender offer or otherwise) or (e)
solicit, initiate, participate or continue in any negotiation or discussion with
respect to any offer or proposal to acquire all, substantially all or a
significant portion of the business, properties or technologies or any portion
of capital stock of any other entity whether by merger, purchase of assets,
tender offer or otherwise, or effect any such transaction. In addition to the
foregoing, if Odisei or any of the Security Holders receives, prior to the
Closing or the termination of this Agreement, any offer, proposal, or request
relating to any of the above, Odisei or the Security Holders, as applicable,
shall immediately notify 8x8 thereof, including information as to the identity
of the offeror or the party making any such offer or proposal and the terms
thereof in reasonable detail, and such other information related thereto as 8x8
may reasonably request. The parties hereto agree that irreparable damage would
occur in the event that the provisions of this Section 6.2 were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed by the parties that 8x8 shall be entitled to seek an
injunction or injunctions to prevent breaches of the provisions of this Section
6.2 and to enforce specifically the terms and provisions hereof in any court of
the United States, France or any state having jurisdiction, this being in
addition to any other remedy to which 8x8 may be entitled at law or in equity.
ARTICLE VII
COVENANTS
7.1 ADVICE OF CHANGES. From and after the date of this Agreement and
until the Closing or the earlier termination of this Agreement, each of the
parties will promptly advise the other parties in writing (a) of any event
occurring subsequent to the date of this Agreement that would render any
representation or warranty of that party contained in this Agreement or the
Related Agreements, as if made on or as of the date of such event, untrue or
incomplete in any material respect, (b) of any event having a Material Adverse
Effect with respect to the party and taken as a whole, and (c) of any breach by
the party of any covenant or agreement contained in this Agreement or the
Related Agreements.
7.2 CERTAIN DEFAULTS. From and after the date of this Agreement and
until the Closing the Security Holders and Odisei will give prompt notice to 8x8
of (a) any notice of default received by Odisei or the Security Holders under
any material instrument or agreement to which Odisei is a party or by which
Odisei is bound, and (b) any suit, action or proceeding instituted or threatened
against or affecting Odisei.
7.3 SATISFACTION OF CONDITIONS PRECEDENT. Each of the parties will
use their best efforts to satisfy or cause to be satisfied all the conditions
precedent to the obligations of such other party,
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and the parties will use their best efforts to cause the transactions
contemplated by this Agreement to be consummated.
7.4 FURTHER ACTIONS. Subject to the terms and conditions of this
Agreement, each of the parties hereto (a) will take, or cause to be taken, all
actions, and do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and the other Related Agreements,
and to ensure that 8x8's rights or Odisei and Security Holders' rights under
this Agreement and the Related Agreements continue unimpeded while in effect,
and (b) will take, or cause to be taken, no action inconsistent with the terms
of this Agreement and the Related Agreements or inconsistent with 8x8's rights
or Odisei and Security Holders' rights hereunder or thereunder. In case at any
time after the Closing Date any further action is necessary or desirable to
carry out the purposes of this Agreement or any of the Related Agreements, (a)
8x8 will cause its proper officers and directors to take all such necessary
action, and (b) Odisei and Security Holders will take or cause the proper
officers and directors of Odisei, to take all such necessary actions.
7.5 BOARD OF DIRECTORS. Immediately prior to the Closing, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ will resign as Chairman and CEO of Odisei. As soon as practicable after
the Closing the shareholders of Odisei shall hold a meeting in which ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be appointed as directors of Odisei.
7.6 TRANSFERS OF STOCK. After the date of execution and prior to the
Closing, no Security Holder shall transfer any security of Odisei held by such
Security Holder.
7.7 COOPERATION. Each of the parties hereto will use its reasonable
best efforts to cause the consummation of the transactions contemplated hereby
in accordance with the terms and conditions hereto and applicable law. Each of
the parties hereto will use its reasonable best efforts to obtain any
governmental consents and approvals necessary to consummate the transactions
contemplated by this Agreement and to cause both the Closing to occur.
7.8 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the representations set forth above, the Security Holder further agrees not to
make any disposition, including engaging in any hedging transaction (a
"DISPOSITION"), with respect to all or any portion of the 8x8 Shares unless and
until:
(a) If the address for the Security Holder shown on Exhibit A is
not within the United States, such Disposition is in accordance with Regulation
S promulgated under the Securities Act; or
(b) There is then in effect a registration statement under the
Securities Act covering such proposed Disposition and such Disposition is made
in accordance with such registration statement; or
(c) (i) The Security Holder shall have notified the Company of
the proposed Disposition and shall have furnished the Company with a detailed
statement of the circumstances
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surrounding the proposed Disposition, and (ii) if reasonably requested by the
Company, the Security Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such Disposition will not
require registration under the Act. It is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144 or
Regulation S except in unusual circumstances.
(d) Additional Diligence. Odisei shall promptly provide to 8x8
and its legal counsel additional diligence materials reasonably requested by May
19, 1999, by 8x8 and its counsel.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
8.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES. None of the
parties hereto will be obligated to consummate at the Closing any of the
transactions provided for herein if any preliminary or permanent injunction or
other order issued by any federal or state court of competent jurisdiction in
the United States or by any United States or other Governmental Authority or of
any statute, rule, regulation or executive order promulgated or enacted by any
United States or other Governmental Authority which is in effect at the Closing
restrains, enjoins or otherwise prohibits the consummation of such transaction
at the Closing.
8.2 CONDITIONS TO OBLIGATIONS OF ODISEI AND THE SECURITY HOLDERS. The
obligations of Odisei and the Security Holders to consummate and effect this
Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions, any
of which may be waived, in writing, exclusively by the Security Holders holding
a majority of Odisei Shares on an as-converted basis:
(a) Representations, Warranties and Covenants. The
representations and warranties of 8x8 in this Agreement shall be true and
correct in all material respects on and as of the Closing as though such
representations and warranties were made on and as of such time and each of 8x8
shall have performed and complied in all material respects with all covenants
and obligations of this Agreement required to be performed and complied with by
it as of the Closing.
(b) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Share Exchange shall be in effect, nor shall
any proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Share Exchange, which makes the consummation of the Share Exchange illegal.
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(c) Claims. There shall not have occurred any claims (whether or
not asserted in litigation) which may materially and adversely affect the
consummation of the transactions contemplated hereby. There shall be no bona
fide action, suit, claim or proceeding of any nature pending, or overtly
threatened, against 8x8 or Odisei, their respective properties or any of their
officers or directors, arising out of, or in any way connected with, the Share
Exchange or the other transactions contemplated by the terms of this Agreement,
that would materially and adversely affect the consummation of the transactions
contemplated hereby.
(d) Option Grants. Concurrently with the Closing, 8x8 shall grant
to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ options to
purchase 75,000 shares of 8x8 Common Stock, each pursuant to 8x8's standard
option agreement.
(e) Related Agreements. 8x8 shall have executed each of the
Related Agreements to which it is a party.
(f) Legal Opinions. The Security Holders shall have received an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and Stibbe Simont ▇▇▇▇▇▇▇ Duhot &
▇▇▇▇▇▇, counsels to 8x8, substantially in the forms attached as Exhibit L
hereto.
8.3 CONDITIONS TO THE OBLIGATIONS OF 8X8. The obligations of 8x8 to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of each of the
following conditions, any of which may be waived, in writing, exclusively by
8x8:
(a) Representations, Warranties and Covenants. The
representations and warranties of Odisei and the Shareholders (within the
meaning of the preamble to Article IV) in this Agreement shall be true and
correct in all material respects on and as of the Closing as though such
representations and warranties were made on and as of the Closing and Odisei and
the Security Holders shall have performed and complied in all material respects
with all covenants and obligations of this Agreement required to be performed
and complied with by them as of the Closing.
(b) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Share Exchange shall be in effect, nor shall
any proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Share Exchange, which makes the consummation of the Share Exchange illegal.
(c) Claims. There shall not have occurred any claims (whether or
not asserted in litigation) which may materially and adversely affect the
consummation of the transactions contemplated hereby or may have a Odisei
Material Adverse Effect. There shall be no bona fide action, suit, claim or
proceeding of any nature pending, or overtly threatened, against 8x8 or Odisei,
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their respective properties or any of their officers or directors, arising out
of, or in any way connected with, the Share Exchange or the other transactions
contemplated by the terms of this Agreement, that would materially and adversely
affect the consummation of the transactions contemplated hereby or have a Odisei
or 8x8 Material Adverse Effect.
(d) Related Agreements. Each of the Security Holders shall have
executed each of the Related Agreements to which it is a party.
(e) Third Party Consents. Any and all consents, waivers,
assignments and approvals listed in Section 4.6 of the Exceptions Letter shall
have been obtained.
(f) Legal Opinion. 8x8 shall have received a legal opinion from
PricewaterhouseCoopers and Ropers, Majeski, ▇▇▇▇ and Bentley, legal counsel to
Odisei, substantially in the form of Exhibit K hereto.
(g) Certificate of Odisei and Security Holders. 8x8 shall have
been provided with a certificate executed by the Security Holders and executed
on behalf of Odisei by an authorized officer to the effect that, as of the
Closing:
(i) all representations and warranties made by Odisei and the
Shareholders (within the meaning set forth in the preamble to Article IV) in
this Agreement are true and correct in all material respects on and as of the
Closing as though such representations and warranties were made on and as of
such time;
(ii) all covenants and obligations of this Agreement to be
performed by Odisei on or before such date have been so performed in all
material respects; and
(iii) the provisions set forth in Articles VI and VII have
been satisfied.
(h) Assignment of Inventions Agreements. All Security Holders,
officers, and all present and former development employees and consultants that
have been involved in research and development at Odisei have executed and
delivered to Odisei an agreement regarding the protection of such proprietary
information and the assignment of inventions to Odisei in form and substance
reasonably satisfactory to 8x8.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVERS
9.1 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned prior to the Closing:
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(a) by mutual consent of 8x8, the Security Holders who own a
majority of the Odisei Shares, on an as-converted basis (the "MAJORITY SECURITY
HOLDERS") and Odisei;
(b) by either 8x8 or the Security Holders and Odisei prior to the
Closing, if all the conditions to that party's performance at the Closing will
not have been satisfied or waived by the close of business on June 12, 1999
other than as a result of a breach of this Agreement by the terminating party;
(c) by either 8x8 or the Security Holders and Odisei, if a
permanent injunction or other order by any federal or state court which would
make illegal or otherwise restrain or prohibit the consummation of the
transactions provided for in this Agreement will have been issued and will have
become final and nonappealable;
(d) by the Security Holders and Odisei, if any representations of
8x8 in this Agreement (with such changes as may been made therein in compliance
with this Agreement) will be materially false or if 8x8 will have committed a
material breach of its obligations under this Agreement and will have failed to
cure such breach after reasonable notice thereof (but in any event within ten
(10) days after such notice).
(e) by 8x8, if any representations of the Security Holders or
Odisei in this Agreement (with such changes as may been made therein in
compliance with this Agreement) will be materially false or if the Security
Holders or Odisei will have committed a material breach of its obligations under
this Agreement and will have failed to cure such breach after reasonable notice
thereof (but in any event within ten (10) days after such notice).
9.2 PROCEDURE UPON TERMINATION. In the event of the termination of
this Agreement by any party in accordance with Section 9.1, such party shall
promptly give written notice thereof to the other parties hereto and this
Agreement will terminate and the transactions contemplated hereby will be
abandoned without further action by any of the parties hereto, except that
Article XI will survive any such termination.
9.3 AMENDMENT AND MODIFICATION; WAIVER. Subject to applicable law,
this Agreement may be amended, modified and supplemented by a written instrument
authorized and executed on behalf of 8x8, the Majority Security Holders and
Odisei. No waiver by either party of any of the provisions hereof will be
effective unless explicitly set forth in writing and executed by the party so
waiving. Except as provided in the preceding sentence, no action taken pursuant
to this Agreement, including, without limitation, any investigation by or on
behalf of any party, will be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants or
agreements contained herein and in any documents delivered or to be delivered
pursuant to this Agreement and in connection with the Closing hereunder. The
waiver by any party hereto of a breach of any provision of this Agreement will
not operate or be construed as a waiver of any other or subsequent breach.
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ARTICLE X
INDEMNIFICATION
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
Regardless of any investigation by any party hereto, Odisei's, the Security
Holders' and 8x8's representations, warranties and covenants in this Agreement
or in any instrument delivered pursuant to this Agreement shall terminate on the
first anniversary of the Closing Date, except, subject to 10.4(c) to the extent
a Claim Notice (as defined below in Section 10.3) has been submitted prior to
such date.
10.2 INDEMNIFICATION.
(a) Subject to the terms and conditions of this Article X, the
Shareholders agree jointly and severally to indemnify and hold 8x8 and its
officers, directors, agents, affiliates and representatives (collectively, the
"INDEMNITEES"), from and in respect of, and hold the Indemnitees harmless
against, any and all damages, fines, penalties, losses, liabilities, judgments,
deficiencies, and expenses (including without limitation amounts paid in
settlement, interest, court costs, costs of investigators, reasonable fees and
expense of attorneys and accountants and other expenses of litigation), offset
or reduced by the amount of any insurance proceeds or tax benefits actually
received by 8x8 in respect of any of the foregoing, incurred or suffered by any
of the Indemnitees ("DAMAGES") resulting from, relating to or in connection with
any misrepresentation, breach of representation or warranty or failure to
perform any covenant or agreement of Odisei or the Security Holders in this
Agreement or any inaccuracy in any schedule or certificate delivered by Odisei
or the Security Holders pursuant to this Agreement (without regard to any
qualification contained in this Agreement based on materiality or Material
Adverse Effect or similar qualification).
(b) To secure the indemnification obligations of the
Shareholders to the Indemnitees, the Indemnification Shares will be deposited
into the Escrow Fund with the Escrow Agent in accordance with Section 2.3 hereof
and the Escrow Agreement.
(c) Each Shareholder acknowledges that its indemnification
obligations hereunder are solely in his capacity as a former Shareholder or
beneficial owner of shares of Odisei, and, accordingly, the indemnification
obligations in this Article X shall not entitle any current or former officer,
director or employee of Odisei to any indemnification from Odisei pursuant to
the Articles of Incorporation, or any agreement with Odisei (notwithstanding any
insurance policy).
10.3 METHOD OF ASSERTING CLAIMS. 8x8 shall give written notice (the
"CLAIM NOTICE") to the agent for the Shareholders (the "SHAREHOLDER'S AGENT") as
identified in Section 10.5 below, and the Escrow Agent of any claim or event for
which 8x8 receives notice or is otherwise known to it which gives rise or may
give rise to a claim for indemnification hereunder (an "INDEMNIFIABLE CLAIM") as
provided in the Escrow Agreement. The Claim Notice shall be delivered promptly
and, in any event, within 30 days after such claim or event becomes known to
8x8.
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10.4 INDEMNIFICATION LIABILITY LIMITATIONS.
(a) The maximum aggregate liability of the Shareholders for
Damages shall be limited to the Maximum Liability Amount (as defined below),
except (i) for claims based on fraud and breaches of the representations and
warranties contained in Sections 4.2 and 4.4 in which case the Shareholders
shall be liable for the total amount of such Damages, and (ii) for breaches of
the representations and warranties contained in Section 4.20. The "MAXIMUM
LIABILITY AMOUNT" shall mean an amount equal to the product of the number of
Indemnification Shares multiplied by the Average Closing Price.
(b) The Shareholders shall not be liable under this Article VII
unless Indemnity Amounts (as determined pursuant to the Escrow Agreement)
totaling in excess of $20,000 (the "BASKET AMOUNT") have been determined in
which case 8x8 shall be entitled to recover the Indemnity Amounts to the extent
the aggregate of the Indemnity Amounts exceed the Basket Amount; provided,
however, Indemnity Amounts with respect to (i) claims based on fraud and (ii)
breaches of the representations and warranties contained in Sections 4.2 and 4.4
shall be paid without regard to the Basket Amount..
(c) Nothing in this Article X shall limit, in any manner
(whether by time, amount, procedure or otherwise), any remedy at law or in
equity to which 8x8 may be entitled as a result of actual fraud or willful
misrepresentation or misconduct by Odisei or Security Holders or with respect to
breaches of representations and warranties contained in Section 4.19.
10.5 SECURITY HOLDERS' AGENT OF THE SHAREHOLDERS; POWER OF ATTORNEY.
(a) At the Closing ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be constituted and
appointed as Shareholders" Agent to serve as agent and attorney-in-fact for each
Shareholder for purposes of this Article X only to give and receive notices and
communications, to authorize delivery to 8x8 of the Escrow Fund in satisfaction
of claims by 8x8, to object to such deliveries, to agree to, negotiate, enter
into settlements and compromises of, and demand dispute resolution pursuant to
the Escrow Agreement and comply with orders of courts with respect to such
claims, and to take all actions necessary or appropriate in the judgment of the
Shareholders" Agent for the accomplishment of the foregoing. No bond shall be
required of the Shareholders" Agent, and the Shareholders" Agent shall receive
no compensation for his services. Notices or communications to or from the
Shareholders" Agent shall constitute notice to or from each of the Shareholders.
If ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall die or otherwise become incapable of fulfilling his
obligations as Shareholders" Agent hereunder, a successor Shareholders" Agent
shall be appointed by the Majority Shareholders.
(b) The Shareholders' Agent shall not be liable for any act done
or omitted hereunder as Shareholders' Agent while acting in good faith and in
the exercise of reasonable judgment. The Shareholders shall jointly and
severally indemnify the Shareholders' Agent and hold the Shareholders' Agent
harmless against any loss, liability or expense incurred without negligence or
bad faith on the part of the Shareholders' Agent and arising out of or in
connection with the acceptance or administration of the Shareholders' Agent's
duties hereunder, including the reasonable fees and expenses of any legal
counsel retained by the Shareholders' Agent.
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(c) A decision, act, consent or instruction of the Shareholders'
Agent with regard to this Article X only shall constitute a decision of all the
Shareholders, and shall be final, binding and conclusive upon each of the
Shareholders, and the Escrow Agent and 8x8 may rely upon any decision, act,
consent or instruction of Shareholders ' Agent as being the decision, act,
consent or instruction of each and all of the Shareholders. The Escrow Agent and
8x8 are hereby relieved from any liability to any person for any acts done by
them in accordance with such decision, act, consent or instruction of the
Shareholders ' Agent.
10.6 THIRD-PARTY CLAIMS. In the event 8x8 becomes aware of a
third-party claim which 8x8 believes may result in a demand against the Escrow
Fund, 8x8 shall notify the Shareholders' Agent of such claim, and the
Shareholders' Agent and the Shareholders of Odisei shall be entitled, at their
expense, to participate in any defense of such claim. 8x8 shall have the right
in its sole discretion to settle any such claim; provided, however, that except
with the consent of the Shareholders' Agent, no settlement of any such claim
with third-party claimants shall be determinative of the amount or validity of
any claim against the Escrow Fund. In the event that the Shareholders' Agent has
consented to any such settlement, the Shareholders' Agent shall have no power or
authority to object under any provision of this Article X to the amount of any
claim by 8x8 against the Escrow Fund with respect to such settlement.
ARTICLE XI
GENERAL PROVISIONS
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Regardless of any
investigation made by or on behalf of any party to this Agreement, all
representations and warranties contained in or made in writing by Odisei, the
Security Holders or 8x8 pursuant to this Agreement will survive the Closing.
11.2 EXPENSES; CERTAIN FEES; TAXES. Each of the parties shall be
responsible for its own expenses and income, sales and use taxes, including,
without limitation the Security Holders' Expenses.
11.3 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement will be in
writing and will be deemed to have been duly given if delivered personally or
mailed, either by certified or registered mail with postage prepaid or by
national or international overnight courier, or sent by facsimile, as follows:
(a) if to the Security Holders, to;
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c/o Odisei S.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-▇▇-
▇▇
▇▇▇▇▇▇
Facsimile: 011 334 92 94 21 60
(b) if to Odisei, to:
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Facsimile: 011 334 92 94 21 60
Attn: General Manager
with a copy to:
Ropers, Majeski, ▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
(c) if to 8x8, to:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
or to such other Person or address as either party will specify by notice in
writing to the other party. All such notices, requests, demands, waivers and
communications will be deemed to have been received (i) if given by personal
delivery or by facsimile, on the date of personal delivery or by facsimile or
(ii) if by nationally or internationally recognized overnight courier, on the
fourth business day following dispatch.
11.4 ENTIRE AGREEMENT. This Agreement and the Related Agreements
(including the Exhibits hereto and thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, oral and written, between
the parties hereto with respect to the subject matter hereof and thereof.
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11.5 BINDING EFFECT, BENEFIT. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors, assigns, executors and legal representatives. Nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
11.6 ASSIGNABILITY. This Agreement will not be assigned by either
party hereto without the prior written consent of the other parties and any
attempt to do so will be void.
11.7 SECTION HEADINGS. The Section headings contained in this
Agreement are inserted for reference purposes only and will not affect the
meaning or interpretation of this Agreement.
11.8 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed to be an original, and all of which
together will be deemed to be one and the same instrument.
11.9 APPLICABLE LAW. This Agreement and the legal relations between
the parties hereto will be governed by and construed in accordance with the laws
of the State of California without regard to conflicts of laws principles
thereof to the extent that such principles would apply the law of another
jurisdiction.
11.10 SEVERABILITY. In case any provision of this Agreement will be
invalid, illegal or unenforceable in any jurisdiction, then as to such
jurisdiction only, such provision will to the extent of such prohibition or
unenforceability be deemed severed from the remainder of this Agreement and the
validity, legality and enforceability of the remaining provisions will not in
any way be affected or impaired thereby.
11.11 NO WAIVER. No waiver of any breach or default hereunder of any
party hereto will be deemed a waiver of any default or breach subsequently
occurring.
11.12 REMEDIES NOT EXCLUSIVE. Except as otherwise provided in this
Agreement, no remedy conferred by any of the specific provisions of this
Agreement is intended to be exclusive of any other remedy and each remedy will
be cumulative and will be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute or otherwise. No
remedy will be deemed to be a limitation on the amount or measure of damages
resulting from any breach of this Agreement. The election of any one or more
remedies will not constitute a waiver of the right to pursue other available
remedies.
11.13 INTERPRETATION. The words "include", "includes" and "including"
when used herein shall be deemed in each case to be followed by the words
"without limitation."
11.14 RULES OF CONSTRUCTION. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
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11.15 DISCLOSURE. 8x8 and Odisei shall issue a public announcement of
this transaction in a press release approved by both 8x8 and Odisei. Each party
agrees to take reasonable actions to avoid any trading in 8x8 securities by such
party's respective officers, directors, employees and agents until the Closing
Date or that would be based on material nonpublic information that relates to
the proposed Share Exchange or that was learned in the due diligence process.
11.16 INDEMNIFICATION OF COSTS AND EXPENSES IN THE EVENT OF DISPUTES.
If any party to this Agreement brings an action against another party to this
Agreement to enforce its rights or to recover damages as a result of a breach of
this Agreement, the prevailing party shall be entitled to recover its reasonable
costs and expenses, including attorneys' fees and costs, incurred in connection
with such action, including any appeal of such action.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
8X8, INC.
By:
------------------------------
Name:
Title:
ODISEI S.A.
By:
------------------------------
Name:
Title:
SECURITY HOLDERS
---------------------------------
By:
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
SHAREHOLDERS' AGENT
---------------------------------
Print Name
---------------------------------
Sign Name
44
[SIGNATURE PAGE TO STOCK EXCHANGE AGREEMENT]
45
EXHIBIT A
EXHIBIT A-1: ODISEI SHAREHOLDERS AS OF MAY 13, 1999
SHARES OF CLOSING SHARES INDEMNIFICATION SHARES PERCENTAGE INTEREST
NAME AND ADDRESS ODISEI OWNED TO RECEIVE PLACED IN ESCROW IN ESCROW FUND
--------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 187,798 655,843 95,345 33.24
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 44,699 158,759 20,037 6.99
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 34,999 124,307 15,689 5.47
▇▇▇▇▇▇▇ ▇▇▇▇▇ 34,999 124,307 15,689 5.47
Marc Sounigo 24,900 99,600 0 0
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 20,000 71,035 8,965 3.13
▇▇▇▇▇▇ ▇▇▇▇▇ 20,000 71,035 8,965 3.13
▇▇▇▇▇ ▇▇▇▇▇ 20,000 71,035 8,965 3.13
▇▇▇▇▇▇ ▇▇▇▇▇▇ 16,600 58,959 7,441 2.59
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Novel 16,000 56,828 7,172 2.50
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 75,800 269,211 33,979 11.85
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 13,300 47,238 5,962 2.08
▇▇▇▇▇▇ Novel 12,000 42,621 5,379 1.88
Philippe Dewost 6,000 21,310 2,690 0.94
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 5,100 18,114 2,286 0.80
▇▇▇▇▇▇ ▇▇▇▇▇ 4,000 14,207 1,793 0.63
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 4,000 14,207 1,793 0.63
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 100 355 45 0.02
▇▇▇▇▇▇ ▇▇▇▇▇ 100 355 45 0.02
▇▇▇▇ ▇▇ ▇▇▇▇ 11,900 42,266 5,334 1.86
▇▇▇▇▇▇ ▇▇▇▇▇ 33,200 117,918 14,882 5.19
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 21,100 74,942 9,458 3.30
Bianca Finance 33,200 117,918 14,882 5.19
Totals: 716,994 2,559,976 286,798 100.00
46
EXHIBIT A
EXHIBIT A-2: BSCPCE HOLDERS WHO WILL EXERCISE PRIOR TO CLOSING
NUMBER OF
NUMBER OF ODISEI SHARES
BSCPE HELD AS OF NUMBER OF BSCPE OWNED AT CLOSING SHARES
NAME AND ADDRESS MAY 18, 1999 HELD AFTER EXERCISE CLOSING TO RECEIVE
-------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,500 1,833 3,667 14,668
▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ 31,500 10,500 21,000 84,000
▇▇▇▇▇▇ ▇▇▇▇▇ 15,300 5,100 10,200 40,800
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇ 15,000 5,000 10,000 40,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 10,000 3,333 6,667 26,668
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 14,000 4,667 9,333 37,332
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 5,000 1,667 3,333 13,332
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000 1,667 3,333 13,332
Olivier Chicha 11,500 3,833 7,667 30,668
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,000 1,000 2,000 8,000
Totals: 115,800 38,600 77,200 308,800
47
LOAN AND STOCK RESTRICTION AGREEMENT
THIS AGREEMENT is made this 18th day of May, 1999, between, 8x8,
Inc., a Delaware corporation ("8x8") and each of the persons set forth on
Exhibit A hereto (the "Shareholders").
WHEREAS the Shareholders are employees of Odisei S.A. ("Odisei")
whose continued affiliation with Odisei is considered to be important for
Odisei's continued growth;
WHEREAS Shareholder holds Bons de Souscription de Paris de Createurs
d'Enterprise ("BSPCE") to purchase the number of shares of Odisei capital stock
set forth in column 2 next to their names on Exhibit A;
WHEREAS, 8x8 entered into that certain Stock Exchange Agreement,
dated as of May 13, 1999 (the "Share Exchange Agreement") with the shareholders
of Odisei pursuant to which 8x8 is exchanging shares of its Common Stock for all
but six shares of Odisei stock; and
WHEREAS, in connection with the transactions contemplated by the
Share Exchange Agreement, prior to the closing of the Share Exchange Agreement,
8x8 has agreed to loan to each Shareholder such amounts as set forth in column 5
next to such Shareholders' name on Exhibit A (the "Loan Amounts") to exercise
the number of the BSPCE (the "BSPCE Exercise") set forth in column 3 of Exhibit
A such that Shareholder will be a party to the Share Exchange Agreement and will
receive such number of shares of 8x8 Common Stock pursuant to the Share Exchange
Amount (the "Shares") as set forth on Exhibit B hereto; and
WHEREAS, in consideration of the Loan and as an inducement by
Shareholder to 8x8 to enter into the transactions contemplated by the Share
Exchange Agreement, and in order for 8x8 to provide an incentive for Shareholder
to participate in the affairs of 8x8, Shareholder has agreed to enter grant to
8x8 repurchase rights over the 8x8 Shares.
THEREFORE, the parties agree as follows:
1. THE LOAN. 8x8 hereby agrees to provide a loan (the "Loan") in the
aggregate principal amount equal to the Loan Amount to each Shareholder on the
date hereof. The Loan Amounts shall be delivered directly to Odisei on behalf of
each Shareholder in connection with the BSPCE Exercise. The Loan shall be
evidenced by a form of a promissory note (the "Note") attached hereto as Exhibit
A and shall be subject to the terms and conditions contained herein. Each
Shareholder shall repay the obligations evidenced by the Note in accordance with
the terms of the Note.
2. 8X8'S REPURCHASE OPTION. 8x8 has the option to repurchase all or a
portion of the "Unvested Shares" (as defined below) on the terms and conditions
set forth in this Section (the "Repurchase Option") if Shareholder ceases to be
employed by Odisei for any reason, or no reason.
(a) Unvested and Vested Shares. As used in this Agreement,
"Vesting Commencement Date" with respect to a Shareholder shall mean the date
set forth in column 3 of
48
Exhibit B next to such Shareholder's name. All of the Shares of each of the
Shareholders were Unvested Shares as of the applicable Vesting Commencement
Date. Thereafter, for so long (and only for so long) as a Shareholder remains
continuously employed by Odisei at all times, 1/3 of the Unvested Shares will
become Vested Shares on the one-year anniversary of the Vesting Commencement
Date and 1/36 of the Shares shall become Vested Shares upon the expiration of
each full month elapsed after the one year anniversary of the Vesting
Commencement Date. No Shares will become Vested Shares after the date of
termination of employment (the "Termination Date").
(b) Adjustments. The number of Shares that are Vested Shares or
Unvested Shares will be proportionally adjusted to reflect any stock dividend,
stock split, reverse stock split or recapitalization of the Common Stock of 8x8
occurring after the Effective Date.
(c) Exercise of Repurchase Option. At any time within ninety (90)
days after the date a Shareholder's employment with Odisei is terminated for any
reason (the "Termination Date"), 8x8 may elect, or designate any third party, to
repurchase any or all of the Unvested Shares by giving such Shareholder written
notice of exercise of the Repurchase Option. 8x8 and/or its designee(s) will
then have the option to repurchase from such Shareholder (or from such
Shareholder's personal representative as the case may be) any or all of the
Unvested Shares at a repurchase price per share (the "Repurchase Price") equal
to Shareholder's French tax liability (the "Tax Liability"), which is set forth
on Exhibit C hereto, assessed in connection with the exchange of Odisei shares
for 8x8 Shares pursuant to the Exchange Agreement. Shareholder shall provide 8x8
with evidence reasonably satisfactory to 8x8 of the amount of the Tax Liability
as soon as practicable after available. If no such evidence is available upon
expiration of the Repurchase Period, as defined in Section 2(d) below, such
Repurchase Period shall automatically be extended until 30 days after receipt of
such evidence
(d) Payment of Repurchase Price. The Repurchase Price payable to
purchase Unvested Shares upon exercise of the Repurchase Option will be payable,
at the option of 8x8 or its assignee(s), by check or by cancellation of all or a
portion of any outstanding indebtedness of Shareholder to 8x8 (or to such
assignee) or by any combination thereof. The repurchase price will be paid
without interest within ninety (90) days after the Termination Date (the
"Repurchase Period"). Upon tender of the Repurchase Price, the Unvested Shares
shall be deemed repurchased and all rights of Shareholder as a shareholder shall
cease.
3. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legends (in addition to any
legends required under applicable state securities laws):
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49
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO 8x8 THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN 8x8 AND THE SHAREHOLDER, A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF 8x8."
(b) STOP-TRANSFER NOTICES. Shareholder agrees that, in order to
ensure compliance with the restrictions referred to herein, 8x8 may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if 8x8 transfers its own securities, it may make appropriate notations to
the same effect in its own records.
(c) REFUSAL TO TRANSFER. 8x8 shall not be required (i) to transfer
on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
4. MISCELLANEOUS.
(a) The parties agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent
of this Agreement.
(b) Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to Shareholder at his address shown on
Odisei's employment records and to 8x8 at the address of its principal corporate
offices (attention: President) or at such other address as such party may
designate by ten (10) days' advance written notice to the other party hereto.
(c) 8x8 may assign its rights and delegate its duties under this
Agreement. This Agreement shall inure to the benefit of the successors and
assigns of 8x8 and, subject to the restrictions on transfer herein set forth, be
binding upon Shareholder, his heirs, executors, administrators, successors and
assigns.
(d) This Agreement represents the entire agreement between the
parties with respect to the purchase of the Shares by Shareholder, may only be
modified or amended in writing
-3-
50
signed by both parties and satisfies all of 8x8's obligations to Shareholder
with regard to the issuance or sale of securities.
5. GOVERNING LAW. This Agreement shall be governed and construed by
the laws of the State of California as applied to agreements made and performed
in California by residents of the State of California.
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51
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ODISEI
8X8, INC.,
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SHAREHOLDER
---------------------------------
Name:
Address:
52
EXHIBIT A
BSPCE
BSPCE
NUMBER OF REMAINING
TOTAL BSPCE BSPCE TO EXERCISE PRICE PER AFTER
NAME HOLDINGS EXERCISE SHARE LOAN AMOUNT EXERCISE
-------------------- ----------- --------- -------------------- ------------------------------ ---------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,500 3,667 U.S. $ .9814/FF 6.03 U.S. $ 3,598.84/FF 22,112.01 1,833
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 31,500 21,000 U.S. $ .9814/FF 6.03 U.S. $ 20,609.68/FF 126,630.00 10,500
▇▇▇▇▇▇ ▇▇▇▇▇ 15,300 10,200 U.S. $ .9814/FF 6.03 U.S. $ 10,010.42/FF 61,506.00 5,100
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇ 15,000 10,000 U.S. $ .9814/FF 6.03 U.S. $ 9,814.13/FF 60,300.00 5,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 10,000 6,667 U.S. $ .9814/FF 6.03 U.S. $ 6,543.08/FF 40,202.01 3,333
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 14,000 9,333 U.S. $ .9814/FF 6.03 U.S. $ 9,159.53/FF 56,277.99 4,667
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 5,000 3,333 U.S. $ .9814/FF 6.03 U.S. $ 3,271.05/FF 20,097.99 1,667
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000 3,333 U.S. $ .9814/FF 6.03 U.S. $ 3,271.05/FF 20,097.99 1,667
Olivier Chicha 11,500 7,667 U.S. $ .9814/FF 6.03 U.S. $ 7,524.50/FF 46,232.01 3,833
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,000 2,000 U.S. $ .9814/FF 6.03 U.S. $ 1,962.83/FF 12,060.00 1,000
53
EXHIBIT B
8X8 SHARES VESTING
NAME AFTER EXCHANGE COMMENCEMENT DATE
------------------- -------------- -----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 14,668 4/29/98
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 84,000 2/10/98
▇▇▇▇▇▇ ▇▇▇▇▇ 40,800 4/21/98
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇ 40,000 6/3/98
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 26,668 7/27/98
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 37,332 7/15/98
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 13,332 7/15/98
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 13,332 7/6/98
Olivier Chicha 30,668 7/15/98
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 8,000 12/21/98
54
EXHIBIT C
Tax Liability
NAME TAX LIABILITY PER SHARE
------------------- -----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 1.78
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 1.78
▇▇▇▇▇▇ ▇▇▇▇▇ $ 1.78
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇ $ 1.78
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $ 1.78
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 1.78
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ $ 1.78
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 1.78
Olivier Chicha $ 1.78
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ 1.78
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55
CONSENT OF SPOUSE
I, ____________, spouse of _____, have read and approve the foregoing
Agreement. In consideration of granting of the right to my spouse to receive a
loan to exercise the BSCPE, as set forth in the Agreement, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under the
Agreement and agree to be bound by the provisions of the Agreement insofar as I
may have any rights in said Agreement or any shares issued pursuant thereto
under the community property laws of France or similar laws relating to marital
property in effect in the jurisdiction of our residence as of the date of the
signing of the foregoing Agreement.
Dated: , 1999.
---------------
----------------------------
Print Name
-----------------------------
Sign Name
56
NOTE
U.S.$__________ Santa Clara, CA
May 24, 1999
FOR VALUE RECEIVED, _____________ ("Maker"), promises to pay to 8x8,
Inc., a Delaware corporation (the "Company"), the principal sum of U.S.$________
in the manner hereafter provided.
SECTION 1. PAYMENTS AND SECURITY.
This Note shall bear interest at 4.99% per annum, compounded
annually. Principal and accrued but unpaid interest (the "Outstanding Amount")
shall be payable in full on November 24, 2000 (the "Maturity Date"). This Note
may be prepaid by Maker at any time without penalty, and if this Note has been
prepaid prior to May 24, 2000, no interest shall have accrued.
The Outstanding Amount shall accelerate and be immediately due and
payable as follows:
(a) Upon termination of Maker's employment with Odisei S.A.
("Odisei") for any reason or no reason by Maker if S-3 effective or by Odisei.
(b) Upon an Event of Default which has not been cured as provided
in Section 2.
SECTION 2. EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an event of default (an "Event of Default"):
(a) A default in the payment of the principal on any Note, when
and as the same shall became due and payable.
(b) A breach of an obligation of Maker contained in the Loan and
Stock Restriction Agreement, dated May 24, 1999, between the Company and Maker.
Notwithstanding anything in the foregoing to the contrary, Maker
shall have fifteen (15) days after written notice to cure a default under this
Section 2.
SECTION 3. REMEDIES UPON DEFAULT.
(a) Upon the occurrence of an Event of Default referred to in
above, the principal amount then outstanding of this Note shall automatically
become immediately due and payable without presentment, demand, protest, or
other formalities of any kind, all of which are hereby expressly waived by the
Company.
(b) The Company may institute such actions or proceedings in law
or equity as it shall deem expedient for the protection of its rights and may
prosecute and enforce its claims against all assets of Maker, and in connection
with any such action or proceeding shall be entitled to receive
57
from Maker payment of the principal amount of this Note plus accrued interest to
the date of payment plus reasonable expenses of collection, including, without
limitation, attorneys' fees and expenses.
SECTION 4. TRANSFER. This Note may be transferred only upon the
written consent of the Company and Maker.
SECTION 5. MISCELLANEOUS.
(a) Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or by Federal Express, Express Mail, or similar
overnight delivery or courier service or delivered (in person or by telecopy,
telex, or similar telecommunications equipment) against receipt to the party to
whom it is to be given,:
(i) if to the Company, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇.;
(ii) if to Maker, at its address at______________________; or
(iii) in either case, to such other address as the party shall
have furnished in writing in accordance with the provisions of this Section
5(a).
Notice to the estate of any party shall be sufficient if addressed to
the party as provided in this Section 5(a). Any notice or other communication
given by certified mail shall be deemed given at the time of certification
thereof, except for a notice changing a party's address which shall be deemed
given at the time of receipt thereof. Any notice given by other means permitted
by this Section 5(a) shall be deemed given at the time of receipt thereof.
(b) Upon receipt of evidence satisfactory to Maker of the loss,
theft, destruction, or mutilation of this Note (and upon surrender of this Note
if mutilated), Maker shall execute and deliver to the Company a new Note of like
date, tenor, and denomination.
(c) This Note may be amended only by a written instrument executed
by the Company and Maker hereof. Any amendment shall be endorsed upon this Note,
and all future parties shall be bound thereby. All references to the Company
herein shall be deemed to include its successors and assigns, and all covenants,
stipulations, promises and agreements contained herein by or on behalf of the
Company shall be binding upon its successors and assigns, whether so expressed
or not.
(d) This Note shall be governed by, and construed in accordance
with, the laws of the State of California, without giving effect to principles
governing conflicts of law.
-2-
58
(e) If, after maturity, this Note is placed in the hands of an
attorney for collection or if it is collected through judicial, probate,
bankruptcy, or receivership proceedings, an additional reasonable amount shall
be paid for attorneys' fees.
-3-
59
IN WITNESS WHEREOF, Maker executed this Note on May ___, 1999.
---------------------------------
Print Name
---------------------------------
Sign Name
[Signature Page to Promissory Note]
-4-
60
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is entered into on
May 24, 1999, by and between 8x8, Inc., a Delaware corporation ("8x8") and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Shareholder"), a shareholder of Odisei, S.A. ("Odisei").
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Stock Exchange Agreement (the "Share Exchange
Agreement") dated as of May 13, 1999, among 8x8, Odisei and the Security Holders
named therein.
BACKGROUND
A. The Share Exchange Agreement provides for the exchange (the "Share
Exchange") by the holders of all but six of the outstanding shares of capital
stock of Odisei for shares of Common Stock of 8x8 ("8x8 Shares").
B. Shareholder is receiving a significant number of 8x8 Shares
pursuant to the terms of the Share Exchange Agreement and Shareholder
acknowledges that a portion of the consideration paid by 8x8 in connection with
the Share Exchange is based on Shareholder entering into and performing the
obligations of this Agreement.
C. As a condition to the Share Exchange and to preserve the value and
goodwill of Odisei after it is acquired by 8x8, the Share Exchange Agreement
contemplates, among other things, that Shareholder enter into this Agreement and
that this Agreement become effective upon the closing of the Share Exchange (the
"Effective Date").
NOW, THEREFORE, in consideration of the mutual promises made herein,
8x8 and Shareholder (collectively referred to as the "Parties") hereby agree as
follows:
1. Covenant Not to Compete.
(a) Shareholder agrees that until the third anniversary of the
Effective Date, Shareholder will not directly or indirectly engage in (whether
as an employee, consultant, proprietor, partner, director or otherwise), or have
a ownership interest in, or participate in the financing, operation, management
or control of, any person, division of a firm, corporation or business that
engages in a "Restricted Business" in a "Restricted Territory," as such terms
are defined below. It is agreed that ownership of (i) no more than 1% of the
outstanding voting stock of a publicly traded corporation, or (ii) any stock
presently owned by Shareholder as of the date hereof, will not constitute a
violation of this provision.
(i) As used in this Agreement:
(1) "Restricted Business" means any business that is
primarily engaged in or (to Shareholder's knowledge after due inquiry) preparing
to engage in the design, production, marketing, sale, servicing or distribution
of products or services of a type sold,
-1-
61
reasonably anticipated to be sold, or competitive with any product or service of
Odisei, or the providing of consulting services therefor.
(2) "Restricted Territory" means any location in which
Odisei or 8x8 sells, markets, distributes or has distributed products or
services, or any location in which Odisei or 8x8 plans to sell, market,
distribute or has distributed products or services.
(b) In addition, until the third anniversary of the
Effective Date, Shareholder agrees not to undertake any
employment or activity competitive with the Company's business in which the
loyal and complete fulfillment of the duties of the competitive employment or
activity would call on Shareholder to reveal, to make judgments on, or otherwise
to use any confidential business information or trade secrets of the Company's
business to which Shareholder had access by reason of the Company's business.
2. Non-Solicitation Covenant. Shareholder agrees that, for a period
of five years after the Closing of the Share Exchange Agreement, if Shareholder
is terminated (with or without cause) or voluntarily terminates his employment
with Odisei or 8x8, Shareholder will not:
(a) solicit, encourage, or take any other action which is intended
to induce any key employee of Company or 8x8 to terminate his employment with
Company or 8x8, or
(b) interfere in any manner with the contractual or employment
relationship between Company or 8x8 and any such employee of Company or 8x8.
3. Scope. The parties acknowledge that the market for broadband
communications and telephony semiconductors, software and systems is worldwide,
and that, in this market, products and services from any nation compete with
products from all other nations. Accordingly, in order to secure to 8x8 the
benefits of the Share Exchange Agreement, the parties agree that the provisions
of Sections 1 and 2 will apply to each of the states and counties of the United
States, including each county in California, to France and to each nation
worldwide.
4. Reasonableness of Restrictions. The covenants contained in
Sections 1 and 2 shall be construed as a series of separate covenants, one for
each county, city, state and country of any geographic area of the world. Except
for geographic coverage, each such separate covenant shall be deemed identical
in terms to the covenants contained in the preceding paragraphs. If, in any
judicial proceeding, a court refuses to enforce any of such separate covenants
(or any part thereof), then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced. In the event that the
provisions of this Section 1 are deemed to exceed the time, geographic or scope
limitations permitted by applicable law, then such provisions shall be reformed
to the maximum time, geographic or scope limitations, as the case may be,
permitted by applicable laws.
5. Equitable Remedy. Shareholder agrees that it would be impossible
or inadequate to measure and calculate 8x8's damages from any breach of the
covenants set forth in this Sections 1
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62
and 2. Accordingly, Shareholder agrees that if he breaches any provision of
Sections 1 or 2, 8x8 will have available, in addition to any other right or
remedy otherwise available, the right to obtain an injunction from a court of
competent jurisdiction restraining such breach or threatened breach and to
specific performance of any such provision of this Agreement.
6. Arbitration and Equitable Relief.
(a) Except as provided in Section 6(c) below, 8x8 and Executive
agree that any dispute or controversy arising out of, relating to or in
connection with the interpretation, validity, construction, performance, breach
or termination of this Agreement shall be settled by binding arbitration to the
extent permitted by law to be held in Santa ▇▇▇▇▇ County, California, in
accordance with the National Rules for the Resolution of Employment Disputes, of
the American Arbitration Association as then in effect (the "Rules"). The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court of competent jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to conflicts of law rules. Executive hereby
consents to the personal jurisdiction of the state and federal courts located in
California for any action or proceeding arising from or relating to this
Agreement or relating to any arbitration in which the parties are participants.
(c) The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgment of the powers of the arbitrator.
(d) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 6, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH OR TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS PROVIDED IN
SECTION 6(c) AND ONLY TO THE EXTENT PERMITTED BY LAW, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP
BETWEEN THE PARTIES.
7. Miscellaneous.
(a) Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the laws of the State of California
without regard to the conflict of laws principles of California.
(b) Amendments. This Agreement may not be changed or modified in
whole or in part except by an instrument in writing signed by each party hereto.
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63
(c) Notices. Any notice, consent or other communication under this
Agreement will be in writing and will be delivered personally, telexed, sent by
facsimile transmission or overnight courier (regularly providing proof of
delivery) or sent by registered, certified, or express mail and will be deemed
given when so delivered personally, telexed, sent by facsimile transmission or
overnight courier, or if mailed, two days after the date of deposit in the
United States mail as follows: to the parties at the following addresses (or at
such other address as a party may specify by notice in accordance with the
provisions hereof to the other):
To 8x8 8x8, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Shareholder ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
011-334-92-94-68-31
(d) Attorneys' Fees. In the event of any legal action or
proceeding to enforce or interpret the provisions hereof, the provisions hereof,
the prevailing party will be entitled to reasonable attorneys' fees, whether or
not the proceeding results in a final judgment.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement will not affect the validity or
enforceability of any other provision hereof, which will remain in full force
and effect.
(f) Entire Agreement. This Agreement will supersede and replace
all prior agreements or understandings relating to the subject matter hereof,
and no agreement, representations or understandings (whether oral or written or
whether express or implied) which are not expressly set forth in these
agreements have been made or entered into by either party with respect to the
relevant matter hereof.
(g) Counterparts. This Agreement may be executed in several
counterparts, each of which will be an original, but all of which together will
constitute one and the same agreement.
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64
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
8X8, INC.
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SHAREHOLDER
---------------------------------
Print Name
---------------------------------
Sign Name
65
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is entered into on
May 24, 1999, by and between 8x8, Inc., a Delaware corporation ("8x8") and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Executive"), a Executive of 8x8. ("Odisei"). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Stock Exchange Agreement (the "Share Exchange Agreement") dated as
of May 13, 1999, among 8x8, Odisei and the Security Holders named therein.
BACKGROUND
A. The Share Exchange Agreement provides for the exchange (the "Share
Exchange") by the holders of all but six of the outstanding shares of capital
stock of Odisei for shares of Common Stock of 8x8 ("8x8 Shares").
B. Executive is receiving a significant number of options for 8x8
Shares pursuant to the terms of the Share Exchange Agreement and Executive
acknowledges that a portion of the consideration paid by 8x8 in connection with
the Share Exchange is based on Executive entering into and performing the
obligations of this Agreement.
C. As a condition to the Share Exchange and to preserve the value and
goodwill of Odisei after it is acquired by 8x8, the Share Exchange Agreement
contemplates, among other things, that Executive enter into this Agreement and
that this Agreement become effective upon the closing of the Share Exchange (the
"Effective Date").
D. Concurrently with the execution of this Agreement, Executive is
entering into an employment agreement with Odisei.
NOW, THEREFORE, in consideration of the mutual promises made herein,
8x8 and Executive (collectively referred to as the "Parties") hereby agree as
follows:
1. Covenant Not to Compete.
(a) Executive agrees that until the third anniversary of the
Effective Date, Executive will not directly or indirectly engage in (whether as
an employee, consultant, proprietor, partner, director or otherwise), or have a
ownership interest in, or participate in the financing, operation, management or
control of, any person, the division of a firm, corporation or business that
engages in a "Restricted Business" in a "Restricted Territory," as such terms
are defined below. It is agreed that ownership of (i) no more than 1% of the
outstanding voting stock of a publicly traded corporation, or (ii) any stock
presently owned by Executive as of the date hereof, will not constitute a
violation of this provision.
(i) As used in this Agreement:
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66
(1) "Restricted Business" means any business that is
engaged in or (to Executive's knowledge after due inquiry) preparing to engage
in the design, production, marketing, sale, servicing or distribution of
products or services of a type sold, reasonably anticipated to be sold, or
competitive with any product or service of Odisei or the providing of consulting
services therefor.
(2) "Restricted Territory" means any location in which
8x8 sells, markets, distributes or has distributed products or services, or any
location in which 8x8 plans to sell, market, distribute or has distributed
products or services.
(b) In addition, until the third anniversary of the Effective
Date, Shareholder agrees not to undertake any employment or activity competitive
with the Company's business in which the loyal and complete fulfillment of the
duties of the competitive employment or activity would call on Shareholder to
reveal, to make judgments on, or otherwise to use any confidential business
information or trade secrets of the Company's business to which Shareholder had
access by reason of the Company's business.
2. Non-Solicitation Covenant. Executive agrees that, for a period of
five years after the Closing of the Share Exchange Agreement, if Executive is
terminated (with or without cause) or voluntarily terminates his employment with
8x8, Executive will not:
(a) solicit, encourage, or take any other action which is intended
to induce any key employee of Company or 8x8 to terminate his employment with
Company or 8x8, or
(b) interfere in any manner with the contractual or employment
relationship between Company or 8x8 and any such employee of Company or 8x8.
3. Scope. The parties acknowledge that the market for broadband
communications and telephony semiconductors, software and systems is worldwide,
and that, in this market, products and services from any nation compete with
products from all other nations. Accordingly, in order to secure to 8x8 the
benefits of the Share Exchange Agreement, the parties agree that the provisions
of Sections 1 and 2 will apply to each of the states and counties of the United
States, including each county in California, to France and to each nation
worldwide.
4. Reasonableness of Restrictions. The covenants contained in
Sections 1 and 2 shall be construed as a series of separate covenants, one for
each county, city, state and country of any geographic area of the world. Except
for geographic coverage, each such separate covenant shall be deemed identical
in terms to the covenants contained in the preceding paragraphs. If, in any
judicial proceeding, a court refuses to enforce any of such separate covenants
(or any part thereof), then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced. In the event that the
provisions of this Section 1 are deemed to exceed the time, geographic or scope
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67
limitations permitted by applicable law, then such provisions shall be reformed
to the maximum time, geographic or scope limitations, as the case may be,
permitted by applicable laws.
5. Equitable Remedy. Executive agrees that it would be impossible or
inadequate to measure and calculate 8x8's damages from any breach of the
covenants set forth in this Sections 1 and 2. Accordingly, Executive agrees that
if he breaches any provision of Sections 1 or 2, 8x8 will have available, in
addition to any other right or remedy otherwise available, the right to obtain
an injunction from a court of competent jurisdiction restraining such breach or
threatened breach and to specific performance of any such provision of this
Agreement.
6. Arbitration and Equitable Relief.
(a) Except as provided in Section 6(c) below, 8x8 and Executive
agree that any dispute or controversy arising out of, relating to or in
connection with the interpretation, validity, construction, performance, breach
or termination of this Agreement shall be settled by binding arbitration to the
extent permitted by law to be held in Santa ▇▇▇▇▇ County, California, in
accordance with the National Rules for the Resolution of Employment Disputes, of
the American Arbitration Association as then in effect (the "Rules"). The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court of competent jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to conflicts of law rules. Executive hereby
consents to the personal jurisdiction of the state and federal courts located in
California for any action or proceeding arising from or relating to this
Agreement or relating to any arbitration in which the parties are participants.
(c) The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgment of the powers of the arbitrator.
(d) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 6, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH OR TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS PROVIDED IN
SECTION 6(c) AND ONLY TO THE EXTENT PERMITTED BY LAW, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP
BETWEEN THE PARTIES.
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68
7. Miscellaneous.
(a) Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the laws of the State of California
without regard to the conflict of laws principles of California.
(b) Amendments. This Agreement may not be changed or modified in
whole or in part except by an instrument in writing signed by each party hereto.
(c) Notices. Any notice, consent or other communication under this
Agreement will be in writing and will be delivered personally, telexed, sent by
facsimile transmission or overnight courier (regularly providing proof of
delivery) or sent by registered, certified, or express mail and will be deemed
given when so delivered personally, telexed, sent by facsimile transmission or
overnight courier, or if mailed, two days after the date of deposit in the
United States mail as follows: to the parties at the following addresses (or at
such other address as a party may specify by notice in accordance with the
provisions hereof to the other):
To 8x8 8x8, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Executive ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(d) Attorneys' Fees. In the event of any legal action or
proceeding to enforce or interpret the provisions hereof, the provisions hereof,
the prevailing party will be entitled to reasonable attorneys' fees, whether or
not the proceeding results in a final judgment.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement will not affect the validity or
enforceability of any other provision hereof, which will remain in full force
and effect.
(f) Entire Agreement. This Agreement will supersede and replace
all prior agreements or understandings relating to the subject matter hereof,
and no agreement, representations or understandings (whether oral or written or
whether express or implied) which are not expressly set forth in these
agreements have been made or entered into by either party with respect to the
relevant matter hereof.
(g) Counterparts. This Agreement may be executed in several
counterparts, each of which will be an original, but all of which together will
constitute one and the same agreement.
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69
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
8X8, INC.
a Delaware corporation
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
EXECUTIVE
----------------------------------
Print Name
----------------------------------
Sign Name
70
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is entered into on
May 24, 1999, by and between 8x8, Inc., a Delaware corporation ("8x8") and ▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇ ("Shareholder"), a Shareholder of Odisei, ("Odisei"). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Stock Exchange Agreement (the "Share Exchange Agreement") dated as
of May 13, 1999, among 8x8, Odisei and the Security Holders named therein.
BACKGROUND
A. The Share Exchange Agreement provides for the exchange (the "Share
Exchange") by the holders of all but six of the outstanding shares of capital
stock of Odisei for shares of Common Stock of 8x8 ("8x8 Shares").
B. Shareholder is receiving a significant number of 8x8 Shares
pursuant to the terms of the Share Exchange Agreement and Shareholder
acknowledges that a portion of the consideration paid by 8x8 in connection with
the Share Exchange is based on Shareholder entering into and performing the
obligations of this Agreement.
C. As a condition to the Share Exchange and to preserve the value and
goodwill of Odisei after it is acquired by 8x8, the Share Exchange Agreement
contemplates, among other things, that Shareholder enter into this Agreement and
that this Agreement become effective upon the closing of the Share Exchange (the
"Effective Date").
NOW, THEREFORE, in consideration of the mutual promises made herein,
8x8 and Shareholder (collectively referred to as the "Parties") hereby agree as
follows:
1. Covenant Not to Compete.
(a) Shareholder agrees that until the third anniversary of the
Effective Date, Shareholder will not directly or indirectly engage in (whether
as an employee, consultant, proprietor, partner, director or otherwise), or have
a ownership interest in, or participate in the financing, operation, management
or control of, any person, a division of a firm, corporation or business that
engages in a "Restricted Business" in a "Restricted Territory," as such terms
are defined below. It is agreed that ownership of (i) no more than 1% of the
outstanding voting stock of a publicly traded corporation, or (ii) any stock
presently owned by Shareholder as of the date hereof, will not constitute a
violation of this provision.
(i) As used in this Agreement:
(1) "Restricted Business" means any business that is
primarily engaged in or (to Shareholder's knowledge after due inquiry) preparing
to engage in the design, production, marketing, sale, servicing or distribution
of products or services of a type sold,
-1-
71
reasonably anticipated to be sold, or competitive with any product or service of
Odisei, or the providing of consulting services therefor.
(2) "Restricted Territory" means any location in which
8x8 sells, markets, distributes or has distributed products or services, or any
location in which 8x8 plans to sell, market, distribute or has distributed
products or services.
(b) In addition, until the third anniversary of the
Effective Date, Shareholder agrees not to undertake any
employment or activity competitive with the Company's business in which the
loyal and complete fulfillment of the duties of the competitive employment or
activity would call on Shareholder to reveal, to make judgments on, or otherwise
to use any confidential business information or trade secrets of the Company's
business to which Shareholder had access by reason of the Company's business.
2. Non-Solicitation Covenant. Shareholder agrees that, for a period
of five years after the Closing of the Share Exchange Agreement, if Shareholder
is terminated (with or without cause) or voluntarily terminates his employment
with Odisei or 8x8, Shareholder will not:
(a) solicit, encourage, or take any other action which is intended
to induce any key employee of Company or 8x8 to terminate his employment with
Company or 8x8, or
(b) interfere in any manner with the contractual or employment
relationship between Company or 8x8 and any such employee of Company or 8x8.
3. Scope. The parties acknowledge that the market for broadband
communications and telephony semiconductors, software and systems is worldwide,
and that, in this market, products and services from any nation compete with
products from all other nations. Accordingly, in order to secure to 8x8 the
benefits of the Share Exchange Agreement, the parties agree that the provisions
of Sections 1 and 2 will apply to each of the states and counties of the United
States, including each county in California, to France and to each nation
worldwide.
4. Reasonableness of Restrictions. The covenants contained in
Sections 1 and 2 shall be construed as a series of separate covenants, one for
each county, city, state and country of any geographic area of the world. Except
for geographic coverage, each such separate covenant shall be deemed identical
in terms to the covenants contained in the preceding paragraphs. If, in any
judicial proceeding, a court refuses to enforce any of such separate covenants
(or any part thereof), then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced. In the event that the
provisions of this Section 1 are deemed to exceed the time, geographic or scope
limitations permitted by applicable law, then such provisions shall be reformed
to the maximum time, geographic or scope limitations, as the case may be,
permitted by applicable laws.
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72
5. Equitable Remedy. Shareholder agrees that it would be impossible
or inadequate to measure and calculate 8x8's damages from any breach of the
covenants set forth in this Sections 1 and 2. Accordingly, Shareholder agrees
that if he breaches any provision of Sections 1 or 2, 8x8 will have available,
in addition to any other right or remedy otherwise available, the right to
obtain an injunction from a court of competent jurisdiction restraining such
breach or threatened breach and to specific performance of any such provision of
this Agreement.
6. Arbitration and Equitable Relief.
(a) Except as provided in Section 6(c) below, 8x8 and Shareholder
agree that any dispute or controversy arising out of, relating to or in
connection with the interpretation, validity, construction, performance, breach
or termination of this Agreement shall be settled by binding arbitration to the
extent permitted by law to be held in Santa ▇▇▇▇▇ County, California, in
accordance with the National Rules for the Resolution of Employment Disputes, of
the American Arbitration Association as then in effect (the "Rules"). The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court of competent jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to conflicts of law rules. Shareholder
hereby consents to the personal jurisdiction of the state and federal courts
located in California for any action or proceeding arising from or relating to
this Agreement or relating to any arbitration in which the parties are
participants.
(c) The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgment of the powers of the arbitrator.
(d) SHAREHOLDER HAS READ AND UNDERSTANDS SECTION 6, WHICH
DISCUSSES ARBITRATION. SHAREHOLDER UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
SHAREHOLDER AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING ARBITRATION, EXCEPT AS
PROVIDED IN SECTION 6(c) AND ONLY TO THE EXTENT PERMITTED BY LAW, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF SHAREHOLDER'S RIGHT TO A JURY TRIAL
AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
RELATIONSHIP BETWEEN THE PARTIES.
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73
7. Miscellaneous.
(a) Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the laws of the State of California
without regard to the conflict of laws principles of California.
(b) Amendments. This Agreement may not be changed or modified in
whole or in part except by an instrument in writing signed by each party hereto.
(c) Notices. Any notice, consent or other communication under this
Agreement will be in writing and will be delivered personally, telexed, sent by
facsimile transmission or overnight courier (regularly providing proof of
delivery) or sent by registered, certified, or express mail and will be deemed
given when so delivered personally, telexed, sent by facsimile transmission or
overnight courier, or if mailed, two days after the date of deposit in the
United States mail as follows: to the parties at the following addresses (or at
such other address as a party may specify by notice in accordance with the
provisions hereof to the other):
To 8x8 8x8, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Shareholder ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇-▇▇-▇▇-▇▇
(d) Attorneys' Fees. In the event of any legal action or
proceeding to enforce or interpret the provisions hereof, the provisions hereof,
the prevailing party will be entitled to reasonable attorneys' fees, whether or
not the proceeding results in a final judgment.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement will not affect the validity or
enforceability of any other provision hereof, which will remain in full force
and effect.
(f) Entire Agreement. This Agreement will supersede and replace
all prior agreements or understandings relating to the subject matter hereof,
and no agreement, representations or understandings (whether oral or written or
whether express or implied) which are not expressly set forth in these
agreements have been made or entered into by either party with respect to the
relevant matter hereof.
(g) Counterparts. This Agreement may be executed in several
counterparts, each of which will be an original, but all of which together will
constitute one and the same agreement.
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74
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
8X8, INC.
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SHAREHOLDER
---------------------------------
Print Name
---------------------------------
Sign Name
75
EMPLOYMENT AGREEMENT
BETWEEN
ODISEI, a French company having its registered office at ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ Antipolis, hereafter referred to as the "Company",
represented by ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
PARTY OF THE FIRST PART
AND
▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇, a French citizen, social security no. ▇ ▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇, residing at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, hereafter referred to as the
"Executive",
PARTY OF THE SECOND PART
RECITALS
The Company, 8x8 and the other parties thereto have entered into a Stock
Exchange Agreement dated as of May 13, 1999 (the "Exchange Agreement"), pursuant
to which 8x8 purchased all but six shares of the outstanding capital stock of
the Company, and which required, among other things, that Executive enter into
this Agreement.
Executive has been employed as an employee of Company.
The Executive is an executive of the Company and has been actively involved in
the development and marketing of the Company's business. 8x8 intends to continue
the business of the Company after the acquisition by 8x8 of the Company. To
preserve and protect the assets of the Company, including the Company's goodwill
and business interests of which the Executive has, and will have, in his role as
an employee of the Company, Executive has agreed to enter into this Agreement.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
ARTICLE 1
EMPLOYMENT
(a) This Agreement will become effective as of May 24, 1999.
(b) This Agreement is governed by French law and the national collective
agreement applicable to the Company, which is currently the agreement for
"Bureaux d'Etudes Techniques" (hereafter the "Collective Agreement").
76
-2-
(c) The Company agrees that Executive will be employed as Vice-President
Engineering (Directeur Technique), category cadre, coefficient 270, position
3-3.
Executive's length of service for all purposes will be computed as from February
10, 1998, date on which Executive was hired by the Company.
ARTICLE 2
TERM
This Agreement is entered into for an indefinite term. Either of the parties may
terminate this Agreement in accordance with terms set forth by law and the
Collective Agreement, with an advance notice of three months except in case of
serious or egregious wrongdoing (faute grave ou lourde).
ARTICLE 3
DUTIES
Executive agrees to perform such reasonable responsibilities and duties as may
be required of him by the Company consistent with his position as Vice
President, Engineering of the Company. In particular, Executive shall be
responsible for the management of the Company's team of engineers, whom he shall
hire, manage, control and supervise. Executive shall also be responsible for any
inventive mission which may be reasonably assigned to him from time to time.
Executive shall carry out his duties and responsibilities as Vice President,
Engineering of the Company in a diligent and competent manner and will devote
all of his business time, attention and energy thereto.
Executive shall report to the General Manager of the Company and to any relevant
executive of 8x8.
ARTICLE 4
PLACE OF WORK - MOBILITY
(a) Executive shall perform his duties mainly at the main office of the Company.
Executive agrees that he may be required to travel on a regular basis, in France
or abroad, depending on job requirements.
(b) It is agreed that the Company may modify Executive's place of work within
the borders of France depending upon its business or managerial needs, without
such modification being considered as a change in the employment agreement.
77
-3-
(c) If required by 8x8 in consideration of its business or managerial needs,
Executive shall relocate to one of 8x8's offices in the United States, without
such modification being considered as a change in the employment agreement.
Executive agrees that, in such a case, he shall become an employee of 8x8
pursuant to an employment agreement substantially similar to this Agreement. 8x8
will adjust Executive's title and salary commensurate with other 8x8 employees
in the same facilities with similar job descriptions and qualifications.
The Company shall inform Executive of such relocation a reasonable time before
its date of effect. Executive's relocation expenses shall be reimbursed by the
Company or 8x8 according to the Collective Agreement and 8x8's standard
relocation policy. In the event this Agreement is terminated by the Company
other than for serious or egregious wrongdoing, 8x8 will reimburse Executive for
reasonable relocation expenses back to France provided such relocation occurs
within 30 days after termination.
ARTICLE 5
WORKING TIME
Given the broad responsibilities and the degree of initiative entrusted to him,
Executive is not held to perform a specific number of working hours, but must
devote the time necessary to the proper exercise of his duties.
ARTICLE 6
REMUNERATION
Executive shall receive a gross annual salary amounting to FF 720.000 payable in
twelve installments. This base salary, together with any increases in such
compensation that the Company may, in its sole discretion, decide from time to
time, is referred to in this Agreement as the Executive's "Base Compensation."
Given the nature of Executive's duties and responsibilities within the Company,
it is expressly agreed that Executive's Base Compensation is an overall and
all-inclusive amount, independent of the working hours actually spent by
Executive for the performance of his duties and including any compensation for
overtime.
Executive agrees that any decision regarding the possible grant of bonuses, the
adoption, modification or termination of any bonus plan or the determination of
goals and objectives pursuant to such plan will be made in the sole discretion
of the Company, considering that only his Base Compensation constitute a
material provision of this Agreement.
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ARTICLE 7
FRINGE BENEFITS
During Executive's employment with the Company, Executive shall be permitted to
participate in any group life, medical, hospitalization, dental, disability and
retirement plans of the Company, to the extent that Executive is eligible under
the provisions of such plans, and in any other plans and benefits, if any,
generally maintained by the Company for executives of the stature and rank of
Executive during Executive's employment with the Company, each in accordance
with the terms and conditions of such plans. The Company reserves the right to
cancel or change the benefit plans and programs it offers to its employees at
any time.
ARTICLE 8
PROFESSIONAL EXPENSES
Executive is entitled to reimbursement of professional expenses actually
incurred for the performance of his duties upon presentation of the appropriate
receipts and in accordance with the Company's policies.
ARTICLE 9
PAID VACATIONS
Executive is entitled to paid vacations under the terms provided for by
applicable legislation and the Collective Agreement.
The reference period for paid vacations runs from June 1 to May 31 of the
following year. The paid vacation dates are to be agreed between the Company and
Executive, taking into account the contingencies of the activity.
ARTICLE 10
PATENTS - INTELLECTUAL PROPERTY
The Executive shall promptly disclose to the Company any invention, discovery,
development or improvement which can be the subject of patent rights or
intellectual property rights (hereafter an "Invention") of which he is the
author or co-author, with all documents necessary for its understanding.
The attribution or transfer of industrial property rights pertaining to
patentable Inventions shall be made in accordance with the relevant legislation.
All rights pertaining to non-patentable Inventions made in the course of the
Executive's employment shall be transferred to the Company without any formality
or any other compensation than the Executive's remuneration, the amount of which
has been set in consideration of such transfers.
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ARTICLE 11
PROFESSIONAL OBLIGATIONS
11.1 CONFLICTS OF INTERESTS
Executive agrees that, during the term of Executive's employment with the
Company, Executive will not engage in any other employment, occupation,
consulting or other business activity, nor will Executive engage in any other
activities that conflict with Executive's obligations to the Company or 8x8.
Executive represents that his performance of all the terms of this Agreement
will not breach any agreement to keep in confidence proprietary information
acquired by him in confidence or in trust prior to his employment by the
Company. Executive has not entered into, and Executive agrees he will not enter
into, any oral or written agreement in conflict herewith.
11.2 PROFESSIONAL DISCRETION AND CONFIDENTIALITY
Executive formally undertakes not to use or disclose to anyone whomsoever,
directly or indirectly, any confidential information that he may obtain in the
course of his functions or by virtue of his presence at the Company, both during
performance of this Agreement as well as after its termination. Executive agrees
that concurrently with the execution of this Agreement, Executive will execute
the 8x8 standard form of confidentiality agreement.
11.3 RESTITUTION
Executive shall return, on the date his duties end, for any reason whatsoever,
without need for a prior notice by the Company, all property placed at his
disposal by the Company, as well as all written or recorded materials containing
confidential information.
11.4 NON-SOLICITATION
Executive undertakes, throughout his employment with the Company and for 24
months thereafter, not to incite any of the Company's or the 8x8's employees or
agents to resign with the intent to work, as employee or otherwise, on behalf of
any individual or legal entity.
11.5 NON-COMPETITION
Executive agrees that during the six months following the effective termination
of his employment with the Company or 8x8, Executive will not directly or
indirectly engage in (whether as an employee, consultant, proprietor, partner,
director or otherwise), or have a ownership interest in, or participate in the
financing, operation, management or control of, any person, firm, corporation or
business that engages in a "Restricted Business" in a "Restricted Territory," as
such terms are defined below. It is agreed that ownership of (i) no more than 1%
of the outstanding voting stock of a publicly traded corporation, or (ii) any
stock presently owned by Executive as of the date hereof, will not constitute a
violation of this provision.
As used in this Agreement:
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"Restricted Business" means any business that is primarily engaged in
or (to Executive's knowledge after due inquiry) preparing to engage
in the design, production, marketing, sale, servicing or distribution
of products or services of a type sold, reasonably anticipated to be
sold, or competitive with any product or service of 8x8 or the
Company, or the providing of consulting services therefor.
"Restricted Territory" means Europe and the United States.
In addition, Executive agrees during the same period not to undertake any
employment or activity competitive with the Company's business in which the
loyal and complete fulfillment of the duties of the competitive employment or
activity would call on Executive to reveal, to make judgments on, or otherwise
to use any confidential business information or trade secrets of the Company's
business to which Executive had access by reason of the Company's business.
Executive agrees that during the six months following the effective termination
of his employment with the Company or 8x8, Executive will cease any professional
relation with any of the Company's or 8x8's clients which he had known in the
course of his employment at the date of termination thereof.
In consideration for Executive's performance of this non-competition covenant
and during the term thereof, Executive shall receive a gross monthly indemnity
amounting to 30% of the average Base Compensation paid to Executive during the
six months preceding the effective termination of his employment.
If Executive breaches this non-competition covenant, Executive shall be liable
for a penalty equal to the net amount of compensation paid to Executive during
the six months preceding the termination of his employment, for each breach
evidenced by a bailiff. Payment of this penalty shall not prevent the Company
from introducing any lawsuit against the Executive or the Executive's new
employer for compensatory damages or for an injunction against continuing the
restricted activity.
Executive acknowledges that this non-competition covenant, which is limited in
its scope and duration, does not prevent him from finding new employment
compatible with his professional abilities and experience.
This non-competition covenant being stipulated in the sole interest of the
Company, the Company reserves the right to release Executive from the above
restrictions, which would release the Company from the payment of the above
indemnity, provided that such decision is notified to Executive by registered
mail during the 15 days following the effective receipt of the termination or
resignation notice.
ARTICLE 12
ENTIRE AGREEMENT
This Agreement will supersede and replace all prior agreements or understandings
relating to the subject matter hereof, and no agreement, representations or
understandings (whether oral or written or whether express or implied) which are
not expressly set forth in these agreements have been made or entered into by
either party with respect to the relevant matter hereof.
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Done in , in two original copies, on
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For the Company ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇
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EMPLOYMENT AGREEMENT
BETWEEN
ODISEI, a French company having its registered office at ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ Antipolis, hereafter referred to as the "Company",
represented by ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇, duly empowered to enter into this
agreement,
PARTY OF THE FIRST PART
AND
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, a French citizen, residing at ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, hereafter referred to as the "Executive",
PARTY OF THE SECOND PART
RECITALS
The Company, 8x8 and the other parties thereto have entered into a Stock
Exchange Agreement dated as of May 13, 1999 (the "Exchange Agreement"), pursuant
to which 8x8 purchased all but six shares of the outstanding capital stock of
the Company, and which required, among other things, that Executive enter into
this Agreement.
The Executive has been a manager of the Company and has been actively involved
in the development and marketing of the Company's business. 8x8 intends to
continue the business of the Company after the acquisition by 8x8 of the
Company. To preserve and protect the assets of the Company, including the
Company's goodwill and business interests of which the Executive had, and will
have, Executive has agreed to enter into this Agreement.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
ARTICLE 1
EMPLOYMENT
(a) This Agreement will become effective as of May 24, 1999.
This Agreement is governed by French law and the national collective agreement
applicable to the Company, which is currently the agreement for "Bureaux
d'Etudes Techniques" (hereafter the "Collective Agreement").
(b) The Company agrees that Executive will be employed as General Manager
(Directeur General), category cadre, coefficient 300, position 3-3.
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ARTICLE 2
TERM
(a) This Agreement is entered into for an indefinite term. Either of the
parties may terminate this Agreement in accordance with terms set forth by law
and the Collective Agreement, with an advance notice of three months except in
case of serious or egregious wrongdoing (faute grave ou lourde).
(b) The Company acknowledges that, due to the circumstances in which this
Agreement is entered into and Executive's responsibilities and rank, the control
of 8x8, as the Company's parent company, by its current shareholders is a
material condition of employment for Executive.
Accordingly, any "Change of Control" as defined below, shall constitute a
material modification of this Agreement and shall justify the constructive
termination of this Agreement, unless Executive agrees to such modification.
Consequently, if, during the six months following a Change of Control,
Executive's employment is terminated for any reason or Executive voluntarily
terminates his employment for any reason, Executive shall be entitled to receive
an indemnity equal to one year of Base Compensation then in effect for
Executive, payable in one lump sum promptly after the termination date. This
indemnity shall be subject to applicable withholdings and shall comprise the
amount of the payment in lieu of notice, the severance payment and termination
indemnities, if any, provided for by French law or the Collective Agreement;
provided however, that if the indemnity provided under French law or the
Collective Agreement would provide a greater indemnity, then Executive shall be
entitled to such indemnity.
As used herein, Change of Control shall mean a transaction or series of
transactions, including by merger or consolidation of 8x8 into or with any other
entity or corporation or the merger or consolidation of any other corporation
into or with 8x8, in which any person, entity or group of persons and/or
entities acquire(s) shares of 8x8 stock representing 35% or more of the
outstanding voting power of 8x8, including voting shares issued or issuable upon
conversion of any convertible security outstanding on the date of such
transaction including without limitation stock options.
ARTICLE 3
DUTIES
Executive agrees to perform such reasonable responsibilities and duties as may
be required of him by the Company consistent with his position as General
Manager of the Company.
Executive shall carry out his duties and responsibilities as General Manager of
the Company in a diligent and competent manner and will devote all of his
business time, attention and energy thereto.
Executive shall report to the Chairman of the Board of the Company and to any
relevant executive of 8x8.
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ARTICLE 4
PLACE OF WORK - MOBILITY
(a) Executive shall perform his duties mainly at the main office of the
Company. Executive agrees that he may be required to travel on a regular basis,
in France or abroad, depending on job requirements.
(b) It is agreed that the Company may modify Executive's place of work
within the borders of France depending upon its business or managerial needs,
without such modification being considered as a change in the employment
agreement.
(c) If required by 8x8 in consideration of its business or managerial needs,
Executive shall relocate to one of 8x8's offices in the United States, without
such modification being considered as a change in the employment agreement.
Executive agrees that, in such a case, he shall become an employee of 8x8
pursuant to an employment agreement substantially similar to this Agreement. 8x8
will adjust Executive's title and salary commensurate with other 8x8 employees
in the same facilities with similar job descriptions and qualifications.
The Company shall inform Executive of such relocation a reasonable time before
its date of effect. Executive's relocation expenses shall be reimbursed by the
Company or 8x8 for (i) one round trip airplane ticket for Executive and his
spouse, (ii) one one-way ticket for Executive and each of his family members and
(iii) up to $10,000 in relocation expenses based on receipts. In the event this
Agreement is terminated by the Company other than for serious or egregious
wrongdoing, 8x8 will reimburse Executive for reasonable relocation expenses back
to France provided such relocation occurs within 60 days after termination.
ARTICLE 5
WORKING TIME
Given the broad responsibilities and the degree of initiative entrusted to him,
Executive is not held to perform a specific number of working hours, but must
devote the time necessary to the proper exercise of his duties.
ARTICLE 6
REMUNERATION
Executive shall receive a gross annual salary amounting to FF 900.000 payable in
twelve installments. This base salary, together with any increases in such
compensation that the Company may, in its sole discretion, decide from time to
time, is referred to in this Agreement as the Executive's "Base Compensation."
Given the nature of Executive's duties and responsibilities within the Company,
it is expressly agreed that Executive's Base Compensation is an overall and
all-inclusive amount, independent of the working hours actually spent by
Executive for the performance of his duties and including any compensation for
overtime.
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Executive agrees that any decision regarding the possible grant of bonuses, the
adoption, modification or termination of any bonus plan or the determination of
goals and objectives pursuant to such plan will be made in the sole discretion
of the Company, considering that only his Base Compensation constitute a
material provision of this Agreement.
ARTICLE 7
FRINGE BENEFITS
During Executive's employment with the Company, Executive shall be permitted to
participate in any group life, medical, hospitalization, dental, disability and
retirement plans of the Company, to the extent that Executive is eligible under
the provisions of such plans, and in any other plans and benefits, if any,
generally maintained by the Company for executives of the stature and rank of
Executive during Executive's employment with the Company, each in accordance
with the terms and conditions of such plans. The Company reserves the right to
cancel or change the benefit plans and programs it offers to its employees at
any time.
ARTICLE 8
PROFESSIONAL EXPENSES
Executive is entitled to reimbursement of professional expenses actually
incurred for the performance of his duties upon presentation of the appropriate
receipts and in accordance with the Company's policies.
ARTICLE 9
PAID VACATIONS
Executive is entitled to paid vacations under the terms provided for by
applicable legislation and the Collective Agreement.
The reference period for paid vacations runs from June 1 to May 31 of the
following year. The paid vacation dates are to be agreed between the Company and
Executive, taking into account the contingencies of the activity.
ARTICLE 10
PATENTS - INTELLECTUAL PROPERTY
The Executive shall promptly disclose to the Company any invention, discovery,
development or improvement which can be the subject of patent rights or
intellectual property rights (hereafter an "Invention") of which he is the
author or co-author, with all documents necessary for its understanding.
The attribution or transfer of industrial property rights pertaining to
patentable Inventions shall be made in accordance with the relevant legislation.
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All rights pertaining to non-patentable Inventions made in the course of the
Executive's employment shall be transferred to the Company without any formality
or any other compensation than the Executive's remuneration, the amount of which
has been set in consideration of such transfers.
ARTICLE 11
PROFESSIONAL OBLIGATIONS
11.1 CONFLICTS OF INTERESTS
Executive agrees that, during the term of Executive's employment with the
Company, Executive will not engage in any other employment, occupation,
consulting or other business activity, nor will Executive engage in any other
activities that conflict with Executive's obligations to the Company or 8x8.
Executive represents that his performance of all the terms of this Agreement
will not breach any agreement to keep in confidence proprietary information
acquired by him in confidence or in trust prior to his employment by the
Company. Executive has not entered into, and Executive agrees he will not enter
into, any oral or written agreement in conflict herewith.
11.2 PROFESSIONAL DISCRETION AND CONFIDENTIALITY
Executive formally undertakes not to use or disclose to anyone whomsoever,
directly or indirectly, any confidential information that he may obtain in the
course of his functions or by virtue of his presence at the Company, both during
performance of this Agreement as well as after its termination. Executive agrees
that concurrently with the execution of this Agreement, Executive will execute
the 8x8 standard form of confidentiality agreement.
11.3 RESTITUTION
Executive shall return, on the date his duties end, for any reason whatsoever,
without need for a prior notice by the Company, all property placed at his
disposal by the Company, as well as all written or recorded materials containing
confidential information.
11.4 NON-SOLICITATION
Executive undertakes, throughout his employment with the Company and for 24
months thereafter, not to incite any of the Company's or the 8x8's employees or
agents to resign with the intent to work, as employee or otherwise, on behalf of
any individual or legal entity.
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11.5 NON-COMPETITION
Executive agrees that during the six months following the effective termination
of his employment with the Company or 8x8, Executive will not directly or
indirectly engage in (whether as an employee, consultant, proprietor, partner,
director or otherwise), or have a ownership interest in, or participate in the
financing, operation, management or control of, any person, firm, corporation or
business that engages in a "Restricted Business" in a "Restricted Territory," as
such terms are defined below. It is agreed that ownership of (i) no more than 1%
of the outstanding voting stock of a publicly traded corporation, or (ii) any
stock presently owned by Executive as of the date hereof, will not constitute a
violation of this provision.
As used in this Agreement:
"Restricted Business" means any business that is primarily engaged in or
(to Executive's knowledge after due inquiry) preparing to engage in the
design, production, marketing, sale, servicing or distribution of
products or services of a type sold, reasonably anticipated to be sold,
or competitive with any product or service of 8x8 or the Company, or the
providing of consulting services therefor.
"Restricted Territory" means Europe and the United States.
In addition, Executive agrees not to undertake during the same period any
employment or activity competitive with the Company's business in which the
loyal and complete fulfillment of the duties of the competitive employment or
activity would call on Executive to reveal, to make judgments on, or otherwise
to use any confidential business information or trade secrets of the Company's
business to which Executive had access by reason of the Company's business.
Executive agrees that during the six months following the effective termination
of his employment with the Company or 8x8, Executive will cease any professional
relation with any of the Company's or 8x8's clients which he had known in the
course of his employment at the date of termination thereof.
In consideration for Executive's performance of this non-competition covenant
and during the term thereof, Executive shall receive a gross monthly indemnity
amounting to 30% of the average Base Compensation paid to Executive during the
six months preceding the effective termination of his employment.
If Executive breaches this non-competition covenant, Executive shall be liable
for a penalty equal to the net amount of compensation paid to Executive during
the six months preceding the termination of his employment, for each breach
evidenced by a bailiff. Payment of this penalty shall not prevent the Company
from introducing any lawsuit against the Executive or the Executive's new
employer for compensatory damages or for an injunction against continuing the
restricted activity.
Executive acknowledges that this non-competition covenant, which is limited in
its scope and duration, does not prevent him from finding new employment
compatible with his professional abilities and experience.
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This non-competition covenant being stipulated in the sole interest of the
Company, the Company reserves the right to release Executive from the above
restrictions, which would release the Company from the payment of the above
indemnity, provided that such decision is notified to Executive by registered
mail during the 15 days following the effective receipt of the termination or
resignation notice.
ARTICLE 12
ENTIRE AGREEMENT
This Agreement will supersede and replace all prior agreements or understandings
relating to the subject matter hereof, and no agreement, representations or
understandings (whether oral or written or whether express or implied) which are
not expressly set forth in these agreements have been made or entered into by
either party with respect to the relevant matter hereof.
Done in ______, in two original copies, on ________
For the Company ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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89
EMPLOYMENT AND STOCK RESTRICTION AGREEMENT
This Employment and Stock Restriction Agreement (the "Agreement") is
made as of May 24, 1999 (the "Effective Date"), by and between 8x8, Inc., a
Delaware corporation ("8x8") and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Executive").
RECITALS
A. 8x8, Odisei, S.A. (the "Company"), and the other parties thereto
have entered into a Stock Exchange Agreement dated as of May 13, 1999 (the
"Exchange Agreement"), pursuant to which 8x8 purchased all but seven shares of
the outstanding capital stock of the Company, and which required, among other
things, that Executive enter into this Agreement;
B. Executive is receiving a significant number of 8x8 Shares
pursuant to the terms of the Exchange Agreement and Executive acknowledges that
a portion of the consideration paid by 8x8 in connection with the Exchange
Agreement is based on Executive entering into and performing the obligations of
this Section 5 of this Agreement; and
C. The Executive has been actively involved in the development and
marketing of the Company's business. 8x8 intends to continue the business of the
Company after the acquisition by 8x8 of the Company. To preserve and protect the
assets of the Company, including the Company's goodwill, of which the Executive
has, and will have, in his role as an employee of 8x8 or its subsidiaries, and
to preserve and protect the Company's goodwill and business interests going
forward, and in consideration for 8x8 entering into and performing under the
Exchange Agreement, Executive has agreed to enter into this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Employment.
(a) Effectiveness of Agreement. This Agreement will become
effective as of the Effective Date. In the event that the transactions
contemplated by the Exchange Agreement are not consummated, this Agreement will
be null and void.
(b) Duties. 8x8 agrees that Executive will be employed as
Vice President, Marketing, of 8x8, and Executive agrees to perform such
reasonable responsibilities and duties as may be required of him by 8x8
consistent with such position. Executive shall carry out his duties and
responsibilities as Vice President, Marketing in a diligent and competent manner
and will devote all of his business time, attention and energy thereto.
Executive shall report to the Vice President, Sales and Marketing, of 8x8.
(c) Employment At-Will. Executive's employment is for an
unspecified duration and constitutes "at-will" employment. The employment
relationship may be terminated at any time, with
90
or without cause, as defined herein, and with or without notice at the option of
either 8x8 or Executive.
2. Compensation.
(a) Base Compensation. Subject to continued employment,
Executive's base salary will be U.S. $165,000 less applicable withholding per
annum, subject to continued employment. Upon recommendation of the CEO of 8x8,
the Board of Directors of 8x8 (the "Board") or the Compensation Committee may,
in its discretion, increase Executive's salary. Such base salary will be paid
periodically in accordance with normal 8x8 payroll practices. The base salary
specified in this Section 2, together with any increases in such base salary
that the Board or the Compensation Committee of the Board may, in its sole
discretion, grant from time to time, is referred to in this Agreement as the
Executive's "Base Compensation."
(b) Bonus. All fiscal year bonus amounts will be determined
by and awarded in the sole discretion of the Compensation Committee or by the
Board commensurate with Executive's performance and the overall performance of
8x8, or pursuant to a plan which may be adopted by 8x8 making payment of bonuses
contingent upon achievement of goals and objectives set by the Board for the
fiscal period.
(c) Option. An initial option (the "Option") to purchase
75,000 shares of Common Stock ("Common Shares") of 8x8 will be granted to
Executive pursuant to 8x8's stock plan and standard form of stock option
agreement in the forms attached as Exhibit A. The Option exercise price will be
the current market value of the Common Shares on the effective date of approval
for the grant of the Option by the Board (the "Grant Date"). Twenty-five (25%)
of the Common Shares underlying the Option will vest on the first anniversary of
the Grant Date. One forty-eighth (1/48th) of the Common Shares underlying the
Option will vest on each monthly anniversary thereafter.
3. Executive Benefits.
(a) Fringe Benefits. During Executive's employment with 8x8,
Executive shall be permitted to participate in any group life, medical,
hospitalization, dental and disability plans, to the extent that Executive is
eligible under the provisions of such plans, and in any other plans and
benefits, if any, generally maintained by 8x8 for executives of the stature and
rank of Executive during Executive's employment with 8x8, each in accordance
with the terms and conditions of such plans (collectively referred to herein as
"Fringe Benefits"). 8x8 reserves the right to cancel or change the benefit plans
and programs it offers to its employees at any time.
(b) PTO. Executive shall have the right during each year to
take an aggregate of 120 hours of personal time off ("PTO") per year which may
be used for absences due to vacation, sickness or personal reasons.
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(c) Expenses. 8x8 shall reimburse Executive for actual and
necessary travel and accommodation costs, entertainment and other business
expenses incurred as a necessary part of discharging the Executive's duties
hereunder, subject to submission of reasonable and appropriate documentation for
approval by the CEO of 8x8 or his designee.
4. Termination of Employment
(a) By Death. The Employment Period shall terminate
automatically upon the death of the Executive. In such event, 8x8 shall pay to
Executive's beneficiaries or his estate, as the case may be, any accrued Base
Compensation, any vested deferred compensation (other than pension plan or
profit-sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plan of 8x8 in which Executive is a
participant to the full extent of Executive's rights under such plan, any
accrued vacation pay and any appropriate business expenses incurred by Executive
in connection with his duties hereunder, all to the date of termination
(collectively "Accrued Compensation"), but no other compensation or
reimbursement of any kind, including, without limitation, severance
compensation, and thereafter, 8x8's obligations hereunder shall terminate.
(b) By Disability. If the Executive is prevented from
properly performing his duties hereunder by reason of any physical or mental
incapacity for a period of three consecutive months or shorter periods
aggregating to four months in any 365-day period, then, to the extent permitted
by law, 8x8 may, at any time thereafter, by 30 days written notice to the
Executive, terminate the Executive's employment. In such event, 8x8 shall pay to
Executive all Accrued Compensation, but no other compensation or reimbursement
of any kind, including without limitation, severance compensation, and
thereafter 8x8's obligations hereunder shall terminate. Nothing in this Section
shall affect Executive's rights under any disability plan in which he is a
participant.
(c) By Resignation or By 8x8 for Cause. If Executive's
employment terminates due to his voluntary resignation or if 8x8 terminates
Executive's employment for Cause (as defined in Section 5(a) below), 8x8 shall
pay Executive all Accrued Compensation, but no other compensation or
reimbursement of any kind, including without limitation, severance compensation,
and thereafter 8x8's obligations hereunder shall terminate.
(d) Termination after Change of Control. If, after a "Change
of Control," as defined below, Executive's employment is terminated for any
reason or Executive voluntarily terminates his employment for any reason,
Executive shall be entitled to receive one year of Base Compensation then in
effect for Executive, payable in one lump sum promptly after the termination
date. As used herein, Change of Control shall mean a transaction or series of
transactions, including by merger or consolidation of 8x8 into or with any other
entity or corporation or the merger or consolidation of any other corporation
into or with 8x8, in which any person, entity or group of persons and/or
entities acquire(s) shares of 8x8 stock representing 35% or more of the
outstanding voting power of 8x8, including voting shares issued or issuable upon
conversion of any convertible security outstanding on the date of such
transaction including without limitation stock options. In addition,
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92
all options granted to Executive shall become immediately exercisable and shall
be fully vested immediately prior to the closing of the Change of Control
transaction.
5. 8x8's Repurchase Option. In connection with Share Exchange
Agreement, Executive received ____ shares of 8x8 Common Stock (the "Shares").
8x8 has the option to repurchase all or a portion of the "Unvested Shares" (as
defined below) on the terms and conditions set forth in this Section (the
"Repurchase Option") if Executive ceases to be employed by 8x8 for any reason,
or no reason; provided however, that notwithstanding anything to the contrary
herein, such Repurchase Option shall terminate (i) upon the termination of the
Executive by 8x8 without Cause (as such term is defined herein), (ii) upon the
resignation of the Executive based upon a Constructive Termination (as such term
is defined herein) by 8x8 or (iii) upon the death or disability of Executive.
(a) Definition of "Cause." For purposes of this Agreement,
"Cause" for Executive's termination will exist at any time after the happening
of one or more of the following events: (i) Executive's conviction of a felony
or any other crime involving moral turpitude; (ii) a material and willful
violation of a federal or state law or regulation applicable to the business of
8x8, (iii) any willful act or acts of dishonesty or gross misconduct undertaken
by Executive; (iv) willful failure by the Executive to substantially perform his
duties hereunder, other than a failure resulting from the Executive's complete
or partial incapacity due to physical or mental illness or impairment, and such
failure to perform has not been cured within 15 days after written notice to
Executive from 8x8 or (v) any willful disregard or disobedience to direct orders
from the Board of Directors of 8x8. No act, or failure to act, by Executive
shall be considered "willful" if done, or omitted to be done, by him in good
faith and in the reasonable belief that his act or omission was in the best
interest of 8x8 and/or required by applicable law.
(b) Definition of "Constructive Termination." For purposes
of this Agreement "constructive termination" shall mean any of the following
unless any of the following occurred to all other employees at Executive's
level: (i) a material reduction in Executive's salary or benefits not agreed to
by Executive other than a reduction ordered by the Board of Directors of 8x8 due
to poor performance by Executive; or (ii) a material change in Executive's
responsibilities not agreed to by Executive other than a reduction ordered by
the Board of Directors of 8x8 in accordance with 8x8's standard policies due to
poor performance by Executive.
(c) Unvested and Vested Shares. Shares that are not Unvested
Shares (as defined in this Section) are "Vested Shares". On the Effective Date
50% of the Shares will be Unvested Shares. Thereafter, for so long (and only for
so long) as Executive remains continuously employed by 8x8 at all times an
additional 1/24th of the Unvested Shares will become Vested Shares upon the
expiration of each full month elapsed after the Effective Date. No Unvested
Shares will become Vested Shares after the Termination Date
(d) Acceleration of Vesting of Unvested Shares;
Notwithstanding anything to the contrary herein:
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93
(i) The vesting of all Unvested Shares shall
immediately accelerate if the Executive is terminated without Cause by 8x8 or
resigns as a result of a Constructive Termination, and all such Unvested Shares
shall become Vested Shares as of the Termination Date.
(ii) The vesting of all Unvested Shares shall
immediately accelerate upon the closing of a transaction relating to a Change of
Control, as defined in Section 4(e), and all such Unvested Shares shall become
Vested Shares as of the date of such closing.
(e) Adjustments. The number of Shares that are Vested Shares
or Unvested Shares will be proportionally adjusted to reflect any stock
dividend, stock split, reverse stock split or recapitalization of the Common
Stock of 8x8 occurring after the Effective Date.
(f) Exercise of Repurchase Option. At any time within ninety
(90) days after the Termination Date, 8x8 may elect, or designate any third
party, to repurchase any or all of the Unvested Shares by giving Executive
written notice of exercise of the Repurchase Option. 8x8 and/or its designee(s)
will then have the option to repurchase from Executive (or from Executive's
personal representative as the case may be) any or all of the Unvested Shares at
$0.25 per share (as adjusted to reflect any stock dividend, stock split, reverse
stock split or recapitalization of the Common Stock of 8x8 occurring after the
Effective Date).
(g) Payment of Repurchase Price. The repurchase price
payable to purchase Unvested Shares upon exercise of the Repurchase Option will
be payable, at the option of 8x8 or its assignee(s), by check or by cancellation
of all or a portion of any outstanding indebtedness of Executive to 8x8 (or to
such assignee) or by any combination thereof. The repurchase price will be paid
without interest within ninety (90) days after the Termination Date.
6. Confidential Information. Executive agrees that concurrently
with the execution of this Agreement, Executive will execute 8x8's standard form
of employee confidentiality and inventions assignment agreement, a copy of which
is attached hereto as Exhibit B.
7. Conflicting Employment. Executive agrees that, during the term
of Executive's employment with 8x8, Executive will not engage in any other
employment, occupation, consulting or other business activity during the term of
Executive's employment, nor will Executive engage in any other activities that
conflict with Executive's obligations to 8x8.
8. Representations. Executive agrees to execute any proper oath or
verify any proper document required to carry out the terms of this Agreement.
Executive represents that his performance of all the terms of this Agreement
will not breach any agreement to keep in confidence proprietary information
acquired by him in confidence or in trust prior to his employment by 8x8.
Executive has not entered into, and Executive agrees he will not enter into, any
oral or written agreement in conflict herewith.
9. Arbitration and Equitable Relief.
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(a) Except as provided in Section 9(d) below, 8x8 and
Executive agree that any dispute or controversy arising out of, relating to or
in connection with the interpretation, validity, construction, performance,
breach or termination of this Agreement shall be settled by binding arbitration
to the extent permitted by law to be held in Santa ▇▇▇▇▇ County, California, in
accordance with the National Rules for the Resolution of Employment Disputes, of
the American Arbitration Association as then in effect (the "Rules"). The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court of competent jurisdiction.
(b) The arbitrator(s) shall apply California law to the
merits of any dispute or claim, without reference to conflicts of law rules.
Executive hereby consents to the personal jurisdiction of the state and federal
courts located in California for any action or proceeding arising from or
relating to this Agreement or relating to any arbitration in which the parties
are participants.
(c) The parties may apply to any court of competent
jurisdiction for a temporary restraining order, preliminary injunction, or other
interim or conservatory relief, as necessary, without breach of this arbitration
agreement and without abridgment of the powers of the arbitrator.
(d) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 9, WHICH
DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF, TO BINDING ARBITRATION TO THE EXTENT
PERMITTED BY LAW, EXCEPT AS PROVIDED IN SECTION 9(c), AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE RELATIONSHIP
BETWEEN THE PARTIES.
10. Miscellaneous.
(a) Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the laws of the State of California
without regard to the conflict of laws principles of California.
(b) Amendments. This Agreement may not be changed or
modified in whole or in part except by an instrument in writing signed by each
party hereto.
(c) Notices. Any notice, consent or other communication
under this Agreement will be in writing and will be delivered personally,
telexed, sent by facsimile transmission or overnight courier (regularly
providing proof of delivery) or sent by registered, certified, or express mail
and will be deemed given when so delivered personally, telexed, sent by
facsimile transmission or
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95
overnight courier, or if mailed, two days after the date of deposit in the
United States mail as follows: to the parties at the following addresses (or at
such other address as a party may specify by notice in accordance with the
provisions hereof to the other):
To Company or 8x8 8x8, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Executive: [Address]
[Fax]
(d) Attorneys' Fees. In the event of any legal action or
proceeding to enforce or interpret the provisions hereof, the provisions hereof,
the prevailing party will be entitled to reasonable attorneys' fees, whether or
not the proceeding results in a final judgment.
(e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement will not affect the validity or
enforceability of any other provision hereof, which will remain in full force
and effect.
(f) Entire Agreement. This Agreement will supersede and
replace all prior agreements or understandings relating to the subject matter
hereof, and no agreement, representations or understandings (whether oral or
written or whether express or implied) which are not expressly set forth in
these agreements have been made or entered into by either party with respect to
the relevant matter hereof.
(g) Counterparts. This Agreement may be executed in several
counterparts, each of which will be an original, but all of which together will
constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment and
Non-Competition Agreement as of the date first written above.
8X8, INC.
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EXECUTIVE
----------------------------------------
Print Name
----------------------------------------
Sign Name
97
CONSENT OF SPOUSE
I, ____________, spouse of _____, have read and approve the foregoing
Agreement. In consideration of the agreements contained herein and in the Stock
Exchange Agreement, I hereby appoint my spouse as my attorney-in-fact in respect
to the exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws of
France or similar laws relating to marital property in effect in the
jurisdiction of our residence as of the date of the signing of the foregoing
Agreement.
Dated: _______________, 1999.
98
EXHIBIT A
STOCK OPTION PLAN AND STOCK OPTION AGREEMENT
B-1
99
EXHIBIT B
EMPLOYEE CONFIDENTIALITY AND INVENTIONS ASSIGNMENT AGREEMENT
C-1
100
STOCK RESTRICTION AGREEMENT
THIS AGREEMENT is made this 24th day of May, 1999, between, 8x8, Inc., a
Delaware corporation (the "8x8") and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Shareholder").
WHEREAS Shareholder is a shareholder and officer of Odisei S.A.
("Odisei") whose continued affiliation with Odisei is considered to be important
for Odisei's continued growth; and
WHEREAS, Shareholder is a party to that certain Stock Exchange
Agreement, dated as of May 13, 1999 (the "Share Exchange Agreement") pursuant to
which Shareholder exchanged 187,797 shares of Odisei stock for 751,188 shares of
8x8 Common Stock (the "Shares"); and
WHEREAS as an inducement by Shareholder to 8x8 to enter into the
transactions contemplated by the Share Exchange Agreement, and in order for 8x8
to provide an incentive for Shareholder to participate in the affairs of 8x8,
8x8 and Shareholder have agreed to enter into this Agreement.
THEREFORE, the parties agree as follows:
1. 8x8's Repurchase Option. In connection with Share Exchange Agreement,
Shareholder received 751,188 shares of 8x8 Common Stock (the "Shares"). 8x8 has
the option to repurchase all or a portion of the "Unvested Shares" (as defined
below) on the terms and conditions set forth in this Section (the "Repurchase
Option") if Shareholder ceases to be employed by 8x8 or Odisei for any reason,
or no reason; provided however, that notwithstanding anything to the contrary
herein, such Repurchase Option shall terminate upon (i) the termination of the
Shareholder by Odisei without Cause (as such term is defined herein), (ii) upon
the resignation of the Shareholder based upon a Constructive Termination (as
such term is defined herein) by Odisei or (iii) upon the death or disability of
Shareholder.
(a) Definition of "Cause." For purposes of this Agreement,
"Cause" for Shareholder's termination will exist at any time after the happening
of one or more of the following events: (i) Shareholder's conviction of a felony
or any other crime involving moral turpitude; (ii) a material and willful
violation of a federal or state law or regulation applicable to the business of
8x8 or Odisei, (iii) any willful act or acts of dishonesty or gross misconduct
undertaken by Shareholder; (iv) willful failure by the Shareholder to
substantially perform his duties to 8x8 or Odisei, other than a failure
resulting from the Shareholder's complete or partial incapacity due to physical
or mental illness or impairment, and such failure to perform has not been cured
within 15 days after written notice to Shareholder from 8x8 or Odisei or (v) any
willful disregard or disobedience to direct orders from the Board of Directors
of 8x8 or Odisei. No act, or failure to act, by Shareholder shall be considered
"willful" if done, or omitted to be done, by him in good faith and in the
reasonable belief that his act or omission was in the best interest of 8x8 and
Odisei and/or required by applicable law.
(b) Definition of "Constructive Termination." For purposes of
this Agreement "constructive termination" shall mean any of the following unless
any of the following occurred to all other employees at Shareholder's level: (i)
a material reduction in Shareholder's salary or benefits not agreed to by
Shareholder other than a reduction ordered by the Board due to poor performance
by Shareholder; or (ii) a material
101
change in Shareholder's responsibilities not agreed to by Shareholder other than
a reduction ordered by the Board in accordance with 8x8's standard policies due
to poor performance by Shareholder.
(c) Unvested and Vested Shares. Shares that are not Unvested
Shares (as defined in this Section) are "Vested Shares". On the Effective Date
50% of the Shares will be Unvested Shares. Thereafter, for so long (and only for
so long) as Shareholder remains continuously employed by Odisei at all times an
additional 1/36th of the Unvested Shares will become Vested Shares upon the
expiration of each full month elapsed after the Effective Date. No Unvested
Shares will become Vested Shares after the date of any termination of employment
(the "Termination Date").
(d) Acceleration of Vesting of Unvested Shares; Notwithstanding
anything to the contrary herein:
(i) The vesting of all Unvested Shares shall
immediately accelerate if the Shareholder is terminated without Cause by Odisei
or resigns as a result of a Constructive Termination, and all such Unvested
Shares shall become Vested Shares as of the Termination Date.
(ii) The vesting of all Unvested Shares shall
immediately accelerate upon the closing of a transaction relating to a Change of
Control, as defined below, and all such Unvested Shares shall become Vested
Shares as of the date of such closing. As used herein, Change of Control shall
mean a transaction or series of transactions, including by merger or
consolidation of 8x8 into or with any other entity or corporation or the merger
or consolidation of any other corporation into or with 8x8, in which any person,
entity or group of persons and/or entities acquire(s) shares of 8x8 stock
representing 35% or more of the outstanding voting power of 8x8, including
voting shares issued or issuable upon conversion of any convertible security
outstanding on the date of such transaction including without limitation stock
options.
(e) Adjustments. The number of Shares that are Vested Shares or
Unvested Shares will be proportionally adjusted to reflect any stock dividend,
stock split, reverse stock split or recapitalization of the Common Stock of 8x8
occurring after the Effective Date.
(f) Exercise of Repurchase Option. At any time within ninety
(90) days after the Termination Date, 8x8 may elect, or designate any third
party, to repurchase any or all of the Unvested Shares by giving Shareholder
written notice of exercise of the Repurchase Option. 8x8 and/or its designee(s)
will then have the option to repurchase from Shareholder (or from Shareholder's
personal representative as the case may be) any or all of the Unvested Shares at
a price per share equal to Shareholder's French tax liability (the "Tax
Liability"), which is $___ per share, assessed in connection with the exchange
of Odisei shares for 8x8 Shares pursuant to the Exchange Agreement. Shareholder
shall provide 8x8 with evidence reasonably satisfactory to 8x8 of the amount of
the Tax Liability as soon as practicable after available. If no such evidence is
available upon expiration of the Repurchase Period, as defined in Section 1(g)
below, such Repurchase Period shall automatically be extended until 30 days
after receipt of such evidence.
(g) Payment of Repurchase Price. The repurchase price payable to
purchase Unvested Shares upon exercise of the Repurchase Option will be payable,
at the option of 8x8 or its assignee(s), by check or by cancellation of all or a
portion of any outstanding indebtedness of Shareholder to 8x8 (or to such
assignee) or by any combination thereof. The repurchase price will be paid
without interest within ninety (90) days after the employment termination date
(the "Repurchase Period").
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102
2. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. The share certificate evidencing the Shares
issued hereunder shall be endorsed with the following legends (in addition to
any legends required under applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO ODISEI
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN ODISEI
AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF ODISEI."
(b) STOP-TRANSFER NOTICES. Shareholder agrees that, in order
to ensure compliance with the restrictions referred to herein, 8x8 may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if 8x8 transfers its own securities, it may make appropriate notations to
the same effect in its own records.
(c) REFUSAL TO TRANSFER. 8x8 shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
3. MISCELLANEOUS.
(a) The parties agree to execute such further instruments
and to take such further action as may reasonably be necessary to carry out the
intent of this Agreement.
(b) Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States Post Office, by registered or certified mail
with postage and fees prepaid, addressed to Shareholder at his address shown on
Odisei's employment records and to 8x8 at the address of its principal corporate
offices (attention: President) or at such other address as such party may
designate by ten (10) days' advance written notice to the other party hereto.
(c) 8x8 may assign its rights and delegate its duties under
this Agreement. This Agreement shall inure to the benefit of the successors and
assigns of 8x8 and, subject to the restrictions on transfer herein set forth, be
binding upon Shareholder, his heirs, executors, administrators, successors and
assigns.
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103
(d) This Agreement represents the entire agreement between
the parties with respect to the purchase of the Shares by Shareholder, may only
be modified or amended in writing signed by both parties and satisfies all of
8x8t's obligations to Shareholder with regard to the issuance or sale of
securities.
4. GOVERNING LAW. This Agreement shall be governed and construed by the
laws of the State of California as applied to agreements made and performed in
California by residents of the State of California.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
ODISEI
8X8, INC.,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
SHAREHOLDER
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
105
CONSENT OF SPOUSE
I, ____________, spouse of _____, have read and approve the foregoing
Agreement. In consideration of the agreements contained herein and in the Stock
Exchange Agreement, I hereby appoint my spouse as my attorney-in-fact in respect
to the exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws of
France or similar laws relating to marital property in effect in the
jurisdiction of our residence as of the date of the signing of the foregoing
Agreement.
Dated: _______________, 1999.
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106
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "AGREEMENT") is made and entered into as of
May 24, 1999 by and among 8x8, Inc., a Delaware corporation ("8X8"), ▇▇▇▇▇▇▇▇
▇▇▇▇▇, as agent (the "SECURITY HOLDERS' AGENT") for the shareholders (the
"SHAREHOLDERS") of Odisei S.A. (the "COMPANY"), and Greater Bay Trust, as the
escrow agent (the "ESCROW AGENT").
RECITALS
A. 8x8, the Shareholders and the other parties named therein have
entered into a Stock Exchange Agreement, dated as of May 13, 1999 (together with
the Exhibits and Schedules thereto, the "STOCK EXCHANGE AGREEMENT"), pursuant to
which the Company became a majority-owned subsidiary of 8x8. Capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the
Stock Exchange Agreement.
B. The Shareholders have agreed to provide certain indemnities to
8x8 in connection with the Acquisition.
C. Pursuant to the Stock Exchange Agreement, 8x8 shall deposit with
the Escrow Agent the Indemnification Shares (consisting of 286,798 shares of 8x8
Common Stock) (the "ESCROW FUND"), to be released pursuant to the terms and
conditions of the Stock Exchange Agreement and this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties and
covenants set forth herein and in the Stock Exchange Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto and Escrow Agent agree as follows:
1. Escrow Amount. 8x8 has delivered directly to the Escrow Agent,
as provided by the Stock Exchange Agreement, certificates, registered in the
name of Greater Bay Trust, as escrow agent, representing the Indemnification
Escrow Shares. The Shareholders shall have voting rights with respect to the
Indemnification Escrow Shares.
2. Disbursement for Indemnification.
(a) Notices of Claims. 8x8 shall give written notice (the
"CLAIM NOTICE") to the Security Holders' Agent and the Escrow Agent of any claim
or event for which notice is received or is otherwise known to it which gives
rise or may give rise to a claim for indemnification under Article X of the
Stock Exchange Agreement. The Claim Notice shall be delivered promptly, and in
any event within 30 days after such event or claim is received by or becomes
known to 8x8. The Claim Notice shall specify the nature and estimated amount of
Damages (the "CLAIMED AMOUNT"). In the case of any claim for indemnification
hereunder arising out of a claim, action, suit or proceeding brought by any
person who is not a party to this Agreement (a "THIRD-PARTY CLAIM"), 8x8 also
shall give the Security Holders' Agent copies of any written claims, process or
legal pleadings with respect to such Third-Party Claim promptly after such
documents are received by 8x8.
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107
(b) Objections to Claims. Within 30 days after delivery of a
Claim Notice, the Security Holders' Agent shall provide written notice (the
"CERTIFICATE OF OBJECTION") to 8x8 and the Escrow Agent of his objections, if
any, to the Claim Notice.
(i) If the Security Holders' Agent fails to deliver
the Certificate of Objection to 8x8 and the Escrow Agent within such time
period, 8x8 shall be entitled to receive the Claimed Amount, or if such Claimed
Amount relates to a third party claim, the Damages paid to such third party
offset or reduced by the amount of any insurance proceeds or tax benefits
actually received by 8x8 in connection with the Damages from the Escrow Fund in
accordance herewith.
(ii) If the Security Holders' Agent delivers a
Certificate of Objection to 8x8 and the Escrow Agent (it being understood that
Escrow Agent may rely on such Certificate of Objection for the purposes of
refusing to make any disbursement), the amounts shall not be released from the
Escrow Fund until such time as (A) joint written instructions (the "JOINT
INSTRUCTIONS"), executed by the Security Holders' Agent and 8x8, are delivered
to the Escrow Agent directing the Escrow Agent to the manner and amount of any
disbursement to be made, (B) a written order from an arbitrator or arbitrators
issued pursuant to 2(b)(iii) below or (C) a certified copy of a final
unappealable order or judgment of a court of competent jurisdiction determining
that an amount is due to 8x8 is delivered to the Escrow Agent. As used in this
Agreement, a Claim Notice for which no Certificate of Objection from the
Security Holders' Agent is received, Joint Instructions, arbitrator's order or
court judgment are referred to collectively as the "APPLICABLE RELEASE
DOCUMENT." As used in this Agreement, the Claimed Amount in a Claim Notice for
which no Certificate of Objection from the Security Holders' Agent is received,
or the amount specified in such Joint Instructions, arbitrator's order, or court
judgment, as the case may be, is the "INDEMNITY AMOUNT" with respect to such
claim.
(iii) Resolution of Conflicts; Arbitration.
(1) In case the Security Holders' Agent has
delivered a Certificate of Objection, the Security Holders' Agent and 8x8 shall
attempt in good faith to agree upon the rights of the respective parties with
respect to each of such claims. If the Security Holders' Agent and 8x8 should so
agree, Joint Written Instructions indicating such agreement shall be prepared
and signed by both parties and shall be furnished to the Escrow Agent.
(2) If no such agreement can be reached
after good faith negotiation, either 8x8 or the Security Holders' Agent may
demand arbitration of the matter unless the amount of the damage or loss is at
issue in pending litigation with a third party, in which event arbitration shall
not be commenced until such amount is ascertained or both parties agree to
arbitration; and in either such event the matter shall be settled by arbitration
conducted by one arbitrator mutually agreeable to 8x8 and the Security Holders'
Agent. In the event that within forty-five (45) days after submission of any
dispute to arbitration, 8x8 and the Security Holders' Agent cannot mutually
agree on one arbitrator, 8x8 and the Security Holders' Agent shall each select
one arbitrator, and the two arbitrators so selected shall select a third
arbitrator. The arbitrator or arbitrators, as the case may be, shall set a
limited time period and establish procedures designed to
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108
reduce the cost and time for discovery while allowing the parties an
opportunity, adequate in the sole judgement of the arbitrator or majority of the
three arbitrators, as the case may be, to discover relevant information from the
opposing parties about the subject matter of the dispute. The arbitrator or a
majority of the three arbitrators, as the case may be, shall rule upon motions
to compel or limit discovery and shall have the authority to impose sanctions,
including attorneys' fees and costs, to the extent as a court of competent law
or equity, should the arbitrator or a majority of the three arbitrators, as the
case may be, determine that discovery was sought without substantial
justification or that discovery was refused or objected to without substantial
justification. The decision of the arbitrator or a majority of the three
arbitrators, as the case may be, as to the validity and amount of any claim in
such Claim Notice shall be binding and conclusive upon the parties to this
Agreement, and the Escrow Agent shall be entitled to act in accordance with such
decision and make or withhold payments out of the Escrow Fund in accordance
therewith. Such decision shall be written and shall be supported by written
findings of fact and conclusions which shall set forth the award, judgment,
decree or order awarded by the arbitrator(s).
(3) Judgment upon any award rendered by the
arbitrator(s) may be entered in any court having jurisdiction. Any such
arbitration shall be held in Santa Clara, California under the rules then in
effect of the American Arbitration Association. The arbitrator(s) shall
determine how all expenses relating to the arbitration shall be paid, including
without limitation, the respective expenses of each party, the fees of each
arbitrator and the administrative fee of the American Arbitration Association.
(c) Release of Escrow. Distributions to 8x8 with respect to
Indemnity Amounts shall be made as provided in this Section 2(c). The Escrow
Agent shall deliver to 8x8 a number of Indemnification Shares equal to the
Indemnity Amount divided by the Average Closing Price determined pursuant to and
as of the date provided in Section 2.3 of the Stock Exchange Agreement. 8x8 and
the Security Holders' Agent shall certify the number of shares to be released
from escrow to 8x8 in a certificate and shall deliver such certificate to the
Escrow Agent.
3. Interim Distributions to Shareholders; Termination of Escrow.
(a) Disbursement of Escrow Fund Upon Termination. Subject to
Section 3(b) below, if, at the close of business on the one year anniversary of
the Closing Date (the "FINAL RELEASE DATE"), any amounts still remain in the
Escrow Fund, and 8x8 has not delivered a Claim Notice as provided in Section
2(a), then any of the Escrow Fund, together with any interest thereon, remaining
in the Escrow Account shall be disbursed as provided on Exhibit A hereto
pursuant to joint written instructions of 8x8 and the Security Holders' Agent.
(b) Escrow Reserve. In the event that, at the Final Release
Date (i) if Security Holders' Agent shall have failed to object to a Claim
Notice based on a third party claim and Damages have not yet been finally
determined or (ii) unresolved claims for indemnification shall have been made by
8x8 pursuant to a Claim Notice, Escrow Agent shall set aside and retain (to the
extent available in the then-remaining Escrow Account) as a reserve to cover
such claim or claims (such amount so set aside and reserved, as reduced from
time to time pursuant to the provisions of
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this Agreement, being herein called the "ESCROW ACCOUNT RESERVED AMOUNT") such
number of Indemnification Shares (valued at the Average Closing Price of 8x8 as
provided in Section 2(c)), to satisfy the Claimed Amount of all unresolved
claims. After resolution of any pending claim, any Escrow Account Reserved
Amount remaining shall be distributed in accordance with the provision of
Section 3(a) above.
4. Protection of Escrow Fund. The Escrow Agent shall hold and
safeguard the Escrow Fund during the Escrow Period, shall treat such funds as a
trust fund in accordance with the terms of this Agreement and shall hold and
dispose of the Escrow Fund only in accordance with the terms hereof.
5. Escrow Agent's Duties.
(a) The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely and
shall be protected in relying on any instrument reasonably believed to be
genuine (or to be a genuine copy or facsimile of such instrument) and to have
been signed or presented by the proper party or parties. The Escrow Agent shall
not be liable for any act done or omitted hereunder as Escrow Agent while acting
in good faith and in the exercise of reasonable judgment, and any act done or
omitted pursuant to the advice of counsel shall be conclusive evidence of such
good faith.
(b) The Escrow Agent is hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case the
Escrow Agent obeys or complies with any such order, judgment or decree of any
court, the Escrow Agent shall not be liable to any of the parties or to any
other person by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on
account of the identity, authority or rights of the parties executing or
delivering or purporting to execute or deliver this Agreement or any documents
or papers deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration
of any rights under any statute of limitations with respect to this Agreement or
any documents deposited with the Escrow Agent.
(e) The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein, and as set
forth in any additional written escrow instructions which the Escrow Agent may
receive after the date of this Agreement which are signed by an officer of 8x8
and the Security Holders' Agent, and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed to be genuine
and to have been signed or presented by the proper party or parties. The Escrow
Agent shall not be liable for any act done or omitted hereunder as Escrow Agent
while acting in good faith and in the exercise of reasonable
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judgment, and any act done or omitted pursuant to the advice of counsel shall be
conclusive evidence of such good faith.
(f) If any controversy arises between the parties to this
Agreement, or with any other party, concerning the subject matter of this
Agreement, its terms or conditions, the Escrow Agent will not be required to
determine the controversy or to take any action regarding it. The Escrow Agent
may hold all documents and the Escrow Amount and may wait for settlement of any
such controversy by final appropriate legal proceedings or other means as, in
the Escrow Agent's discretion, may be required of the Escrow Agent. Furthermore,
the Escrow Agent may at its option file an action of interpleader requiring the
parties to answer and litigate any claims and rights among themselves. The
Escrow Agent is authorized to deposit with the clerk of the court all documents
and the Escrow Amount. Upon initiating such action, the Escrow Agent shall be
fully released and discharged of and from all obligations and liability imposed
by the terms of this Agreement.
(g) 8x8 shall pay the Escrow Agent its fees. Except in the
case of gross negligence or willful misconduct on the part of the Escrow Agent,
the parties and their respective successors and assigns agree jointly and
severally to indemnify and hold Escrow Agent harmless against any and all
losses, claims, damages, liabilities, and expenses, including reasonable costs
of investigation, counsel fees and disbursements that may be imposed on Escrow
Agent or incurred by Escrow Agent in connection with the performance of its
duties under this Agreement, including but not limited to any litigation arising
from this Agreement or involving its subject matter.
(h) The Escrow Agent may resign at any time upon giving at
least fifteen (15) days written notice to the parties; provided, however, that
no such resignation shall become effective until the appointment of a successor
Escrow Agent which shall be accomplished as follows: The parties shall use their
best efforts to mutually agree on a successor Escrow Agent within fifteen (15)
days after receiving such notice. If the parties fail to agree upon a successor
Escrow Agent within such time, the Escrow Agent shall have the right to appoint
a successor Escrow Agent which regularly serves as an escrow agent in connection
with commercial transactions of similar size to that related to the Escrow Fund.
The successor Escrow Agent shall execute and deliver an instrument accepting
such appointment and it shall, without further acts, be vested with all the
estates, properties, rights, powers, and duties of the predecessor Escrow Agent
as if originally named as Escrow Agent. The Escrow Agent shall be discharged
from any further duties and liability under this Agreement.
(i) The Escrow Agent is not a party to, or is not bound by,
any provisions which may be evidenced by, or arise out of, any agreement other
than as therein set forth under the express provisions of this Escrow Agreement.
(j) The Escrow Agent shall not be required to take notice of
any default or to take any action with respect to such default involving any
expense or liability, unless notice in writing of such default is formally given
to the Escrow Agent and unless it is indemnified, in a manner satisfactory to
it, against such expense or liability.
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(k) The Escrow Agent may seek the advice of legal counsel in
the event of any question or dispute as to the construction of any of the
provisions hereof or its duties hereunder, and it shall incur no liability and
shall be fully protected in acting in accordance with the opinion and
instructions of such legal counsel.
6. General Provisions.
(a) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given only if delivered personally or by
commercial delivery service, or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice), with signature
required:
(i) if to 8x8 to:
8x8, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Security Holders' Agent
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
with a copy to:
Ropers, Majeski, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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(iii) if to Escrow Agent:
Greater Bay Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice sent by mail shall be deemed given ten (10) days
after deposited with the U.S. Postal Service; any notice sent by overnight
delivery service shall be deemed given three (3) days after deposit.
(b) Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(c) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and the Escrow Agent and delivered to the other party and
Escrow Agent, it being understood that all parties and the Escrow Agent need not
sign the same counterpart.
(d) Entire Agreement. This Agreement among the parties
hereto and the Escrow Agent, together with the Stock Exchange Agreement: (i)
constitutes the entire agreement among the parties and the Escrow Agent with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among the parties and the Escrow Agent
with respect to the subject matter hereof; (ii) except as expressly provided
herein, is not intended to confer upon any other person any rights or remedies
hereunder; and (iii) shall not be assigned by operation of law or otherwise,
except as otherwise specifically provided in writing by the parties and the
Escrow Agent hereto; provided that 8x8 may assign its rights and obligations
hereunder to any of its subsidiaries, or affiliates or any successor in interest
to the business of 8x8.
(e) Severability. In the event that any part of this
Agreement is declared by any court or other judicial or administrative body to
be null, void, or unenforceable, said provision shall survive to the extent it
is not so declared, and all of the other provisions of this Agreement shall
remain in full force and effect.
(f) Amendment; Waivers. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties, or
conditions hereof may be waived, only by a written instrument executed by the
parties and the Escrow Agent, or in the case of a waiver, by the party or Escrow
Agent waiving compliance. Any waiver by any party or Escrow Agent of any
condition, or of the breach of any provision, term, covenant, representation, or
warranty contained in this Agreement, in any one or more instances, shall not be
deemed to be nor construed as further or
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continuing waiver of any such condition, or of the breach of any other
provision, term, covenant, representation, or warranty of this Agreement.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
(h) Rules of Construction. The parties hereto and the Escrow
Agent agree that they each have been represented by counsel during the
negotiation and execution of this Agreement and acknowledge that they each
understand all provisions of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
(i) Automatic Succession. Notwithstanding anything in this
Agreement to the contrary, any company into which the Escrow Agent may be merged
or with which it may be consolidated, or any company to whom the Escrow Agent
may transfer a substantial amount of its global escrow business, shall be the
successor to the Escrow Agent without the execution or filing of any paper or
any further act on the part of any of the Parties, provided, however, the Escrow
Agent shall at no time during the term of this Agreement have a substantial
financial relationship with either the 8x8 or Company.
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IN WITNESS WHEREOF, 8x8, Company, Security Holders' Agent, the
Shareholders, and the Escrow Agent have caused this Agreement to be signed by
them or their respective duly authorized officers, all as of the date first
written above.
8X8, INC.
By:
-------------------------------------
Name:
Title:
SECURITY HOLDERS' AGENT
----------------------------------------
Print Name
----------------------------------------
Sign Name
ESCROW AGENT
----------------------------------------
as Escrow Agent
By:
-------------------------------------
Name:
Title:
SHAREHOLDERS
By:
-------------------------------------
Name:
Title:
SIGNATURE PAGE TO ESCROW AGREEMENT
115
EXHIBIT A
% OF INDEMNIFICATION SHARES
NAME TO RECEIVE UPON RELEASE OF ESCROW
---- ---------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 33.24
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 6.99
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 5.47
▇▇▇▇▇▇▇ ▇▇▇▇▇ 5.47
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3.13
▇▇▇▇▇▇ ▇▇▇▇▇ 3.13
▇▇▇▇▇ ▇▇▇▇▇ 3.13
▇▇▇▇▇▇ ▇▇▇▇▇▇ 2.59
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Novel 2.50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2.08
▇▇▇▇▇▇ Novel 1.88
Philippe Dewost 0.94
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 0.80
▇▇▇▇▇▇ ▇▇▇▇▇ 0.63
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 0.63
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 0.02
▇▇▇▇▇▇ ▇▇▇▇▇ 0.02
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 11.85
▇▇▇▇ ▇▇ ▇▇▇▇ 1.85
▇▇▇▇▇▇ ▇▇▇▇▇ 5.19
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 3.30
Binaca Finance 5.19
A-1
116
TAX ESCROW AGREEMENT
This TAX ESCROW AGREEMENT (this "Agreement") is made and entered into as
of May 24, 1999 by and between 8x8, Inc., a Delaware corporation ("8x8"), the
Shareholders listed in Exhibit A attached thereto (individually, a "Shareholder"
and collectively, the "Shareholders"), and Greater Bay Trust Company as escrow
agent (the "Escrow Agent").
WHEREAS, the Shareholders entered into a Stock Exchange Agreement, dated
as of May 13, 1999 (the "Share Exchange Agreement"), with 8x8 pursuant to which
such Shareholders received shares of 8x8 Common Stock ("8x8 Shares") in exchange
("the Share Exchange") for their shares of Odisei S.A. stock ("Odisei Shares");
WHEREAS, as a result of the Share Exchange, the Shareholders may be
required to pay French capital taxes (the "Incurred Taxes");
WHEREAS, 8x8 has agreed to file a Registration Statement Form S-3 ("Form
S-3") registering the 8x8 Shares subject to the terms and conditions set forth
in the Registration Rights Agreement, date May 24, 1999, by and between 8x8 and
the Shareholders; and
WHEREAS, 8x8 has agreed to deposit into escrow an amount of cash (the
"Tax Escrow Fund") which shall be used to satisfy the Incurred Taxes under
certain circumstances including if the Form S-3 is not effective such that the
Shareholders are not able to sell their 8x8 Shares in order pay the Incurred
Taxes.
NOW, THEREFORE, in consideration of the representations, warranties and
covenants set forth herein and in the Stock Exchange Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto and Escrow Agent agree as follows:
1. Escrow Amount. 8x8 has delivered directly to the Escrow Agent,
as provided by the Stock Exchange Agreement, $2,692,211 (the "Escrow Amount") as
the Tax Escrow Fund.
2. Release Conditions.
(a) If the date on which the Form S-3 has been declared
effective by the SEC or is otherwise freely tradable (the "Trading Commencement
Date") on the Nasdaq National Market System ("NMS") is prior to the to the date
the Incurred Taxes are due (the "Tax Assessment Date"), and the Average Closing
Price, as defined below, as of the Trading Commencement Date is below the
Minimum Price applicable to a Shareholder as set forth on Exhibit A, then an
amount (the "Tax Indemnity") equal to the Minimum Price applicable to a
Shareholder multiplied by the number of 8x8 Shares owned by such Shareholder as
set forth on Exhibit A shall be released to such Shareholder from the Tax Escrow
Fund. The Tax Indemnity shall be released to the Shareholders pursuant to joint
written instructions (the "Joint Instructions") to the Escrow Agent.
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(b) If the Average Closing Price is greater than the Minimum
Price applicable to a Shareholder, each Shareholder's Tax Indemnity amount shall
be released from the Tax Escrow Fund and delivered to 8x8 pursuant to Joint
Instructions to the Escrow Agent.
(c) As used herein, "Average Closing Price" means the
average of the closing prices of 8x8's Common Stock as quoted on the Nasdaq
National Market System for the ten trading days immediately preceding a
specified date.
3. Security Holders' Agent of the Shareholders; Power of Attorney
(a) As of the date hereof, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be
constituted and appointed as Security Holders' Agent to serve as agent and
attorney-in-fact for each Shareholder for purposes of this Tax Escrow Agreement
to give and receive notices and communications, to execute Joint Instructions,
to agree to, negotiate, enter into settlements and compromises of, and demand
dispute resolution pursuant to this Agreement and comply with orders of courts
with respect to such claims, and to take all actions necessary or appropriate in
the judgment of the Security Holders' Agent for the accomplishment of the
foregoing. No bond shall be required of the Security Holders' Agent, and the
Security Holders' Agent shall receive no compensation for his services. Notices
or communications to or from the Security Holders' Agent shall constitute notice
to or from each of the Shareholders. If ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall die or otherwise
become incapable of fulfilling his obligations as Security Holders' Agent
hereunder, a successor Security Holders' Agent shall be appointed by the
Majority Shareholders.
(b) The Security Holders' Agent shall not be liable for any
act done or omitted hereunder as Security Holders' Agent while acting in good
faith and in the exercise of reasonable judgment. The Shareholders shall jointly
and severally indemnify the Security Holders' Agent and hold the Security
Holders' Agent harmless against any loss, liability or expense incurred without
negligence or bad faith on the part of the Security Holders' Agent and arising
out of or in connection with the acceptance or administration of the Security
Holders' Agents duties hereunder, including the reasonable fees and expenses of
any legal counsel retained by the Security Holders' Agent.
(c) A decision, act, consent or instruction of the Security
Holders' Agent with regard to this Agreement shall constitute a decision of all
the Shareholders, and shall be final, binding and conclusive upon each of the
Shareholders, and the Escrow Agent and 8x8 may rely upon any decision, act,
consent or instruction of Security Holders' Agent as being the decision, act,
consent or instruction of each and all of the Shareholders. The Escrow Agent and
8x8 are hereby relieved from any liability to any person for any acts done by
them in accordance with such decision, act, consent or instruction of the
Security Holders' Agent.
4. Resolution of Conflicts; Arbitration.
(a) In case of any dispute as to the Tax Escrow Fund, the
Security Holders' Agent and 8x8 shall attempt in good faith to agree upon the
rights of the respective parties with respect to
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each of such claims. If the Security Holders' Agent and 8x8 should so agree,
Joint Instructions indicating such agreement shall be prepared and signed by
both parties and shall be furnished to the Escrow Agent.
(b) If no such agreement can be reached after good faith
negotiation, either 8x8 or the Security Holders' Agent may demand arbitration of
the matter unless the amount of the damage or loss is at issue in pending
litigation with a third party, in which event arbitration shall not be commenced
until such amount is ascertained or both parties agree to arbitration; and in
either such event the matter shall be settled by arbitration conducted by one
arbitrator mutually agreeable to 8x8 and the Security Holders' Agent. In the
event that within forty-five (45) days after submission of any dispute to
arbitration, 8x8 and the Security Holders' Agent cannot mutually agree on one
arbitrator, 8x8 and the Security Holders' Agent shall each select one
arbitrator, and the two arbitrators so selected shall select a third arbitrator.
The arbitrator or arbitrators, as the case may be, shall set a limited time
period and establish procedures designed to reduce the cost and time for
discovery while allowing the parties an opportunity, adequate in the sole
judgement of the arbitrator or majority of the three arbitrators, as the case
may be, to discover relevant information from the opposing parties about the
subject matter of the dispute. The arbitrator or a majority of the three
arbitrators, as the case may be, shall rule upon motions to compel or limit
discovery and shall have the authority to impose sanctions, including attorneys'
fees and costs, to the extent as a court of competent law or equity, should the
arbitrator or a majority of the three arbitrators, as the case may be, determine
that discovery was sought without substantial justification or that discovery
was refused or objected to without substantial justification. The decision of
the arbitrator or a majority of the three arbitrators, as the case may be, as to
the validity and amount of any claim in such Claim Notice shall be binding and
conclusive upon the parties to this Agreement, and the Escrow Agent shall be
entitled to act in accordance with such decision and make or withhold payments
out of the Tax Escrow Fund in accordance therewith. Such decision shall be
written and shall be supported by written findings of fact and conclusions which
shall set forth the award, judgment, decree or order awarded by the
arbitrator(s).
(c) Judgment upon any award rendered by the arbitrator(s)
may be entered in any court having jurisdiction. Any such arbitration shall be
held in Santa Clara, California under the rules then in effect of the American
Arbitration Association. The arbitrator(s) shall determine how all expenses
relating to the arbitration shall be paid, including without limitation, the
respective expenses of each party, the fees of each arbitrator and the
administrative fee of the American Arbitration Association.
5. Termination of Escrow. The Tax Escrow Fund shall terminate on
such date as all amounts have been released.
6. Protection of Tax Escrow Fund. The Escrow Agent shall hold and
safeguard the Tax Escrow Fund, shall treat such funds as a trust fund in
accordance with the terms of this Agreement and shall hold and dispose of the
Tax Escrow Fund only in accordance with the terms hereof.
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7. Escrow Agent's Duties.
(a) The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely and
shall be protected in relying on any instrument reasonably believed to be
genuine (or to be a genuine copy or facsimile of such instrument) and to have
been signed or presented by the proper party or parties. The Escrow Agent shall
not be liable for any act done or omitted hereunder as Escrow Agent while acting
in good faith and in the exercise of reasonable judgment, and any act done or
omitted pursuant to the advice of counsel shall be conclusive evidence of such
good faith.
(b) The Escrow Agent is hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court. In case the
Escrow Agent obeys or complies with any such order, judgment or decree of any
court, the Escrow Agent shall not be liable to any of the parties or to any
other person by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on
account of the identity, authority or rights of the parties executing or
delivering or purporting to execute or deliver this Agreement or any documents
or papers deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration
of any rights under any statute of limitations with respect to this Agreement or
any documents deposited with the Escrow Agent.
(e) The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein, and as set
forth in any additional written escrow instructions which the Escrow Agent may
receive after the date of this Agreement which are signed by an officer of 8x8
and the Security Holders Representative, and may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed to be
genuine and to have been signed or presented by the proper party or parties. The
Escrow Agent shall not be liable for any act done or omitted hereunder as Escrow
Agent while acting in good faith and in the exercise of reasonable judgment, and
any act done or omitted pursuant to the advice of counsel shall be conclusive
evidence of such good faith.
(f) If any controversy arises between the parties to this
Agreement, or with any other party, concerning the subject matter of this
Agreement, its terms or conditions, the Escrow Agent will not be required to
determine the controversy or to take any action regarding it. The Escrow Agent
may hold all documents and the Escrow Amount and may wait for settlement of any
such controversy by final appropriate legal proceedings or other means as, in
the Escrow Agent's discretion, may be required of the Escrow Agent. Furthermore,
the Escrow Agent may at its option file an action of interpleader requiring the
parties to answer and litigate any claims and rights among themselves. The
Escrow Agent is authorized to deposit with the clerk of the court all documents
and
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the Escrow Amount. Upon initiating such action, the Escrow Agent shall be fully
released and discharged of and from all obligations and liability imposed by the
terms of this Agreement.
(g) 8x8 shall pay the Escrow Agent its fees. Except in the
case of gross negligence or willful misconduct on the part of the Escrow Agent,
the parties and their respective successors and assigns agree jointly and
severally to indemnify and hold Escrow Agent harmless against any and all
losses, claims, damages, liabilities, and expenses, including reasonable costs
of investigation, counsel fees and disbursements that may be imposed on Escrow
Agent or incurred by Escrow Agent in connection with the performance of its
duties under this Agreement, including but not limited to any litigation arising
from this Agreement or involving its subject matter.
(h) The Escrow Agent may resign at any time upon giving at
least fifteen (15) days written notice to the parties; provided, however, that
no such resignation shall become effective until the appointment of a successor
Escrow Agent which shall be accomplished as follows: The parties shall use their
best efforts to mutually agree on a successor Escrow Agent within fifteen (15)
days after receiving such notice. If the parties fail to agree upon a successor
Escrow Agent within such time, the Escrow Agent shall have the right to appoint
a successor Escrow Agent which regularly serves as an escrow agent in connection
with commercial transactions of similar size to that related to the Tax Escrow
Fund. The successor Escrow Agent shall execute and deliver an instrument
accepting such appointment and it shall, without further acts, be vested with
all the estates, properties, rights, powers, and duties of the predecessor
Escrow Agent as if originally named as Escrow Agent. The Escrow Agent shall be
discharged from any further duties and liability under this Agreement.
(i) The Escrow Agent is not a party to, or is not bound by,
any provisions which may be evidenced by, or arise out of, any agreement other
than as therein set forth under the express provisions of this Escrow Agreement.
(j) The Escrow Agent shall not be required to take notice of
any default or to take any action with respect to such default involving any
expense or liability, unless notice in writing of such default is formally given
to the Escrow Agent and unless it is indemnified, in a manner satisfactory to
it, against such expense or liability.
(k) The Escrow Agent may seek the advice of legal counsel in
the event of any question or dispute as to the construction of any of the
provisions hereof or its duties hereunder, and it shall incur no liability and
shall be fully protected in acting in accordance with the opinion and
instructions of such legal counsel.
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8. General Provisions.
(a) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
commercial delivery service, or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(i) if to 8x8 to:
8x8, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Security Holders Representative:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
with a copy to:
Ropers, Majeski, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to Escrow Agent:
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Greater Bay Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice sent by mail shall be deemed given ten days after
deposited with the U.S. Postal Service; any notice sent by overnight delivery
service shall be deemed given three days after deposit.
(b) Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(c) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and the Escrow Agent and delivered to the other party and
Escrow Agent, it being understood that all parties and the Escrow Agent need not
sign the same counterpart.
(d) Entire Agreement. This Agreement among the parties
hereto and the Escrow Agent, together with the Stock Exchange Agreement: (i)
constitutes the entire agreement among the parties and the Escrow Agent with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among the parties and the Escrow Agent
with respect to the subject matter hereof; (ii) except as expressly provided
herein, is not intended to confer upon any other person any rights or remedies
hereunder; and (iii) shall not be assigned by operation of law or otherwise,
except as otherwise specifically provided in writing by the parties and the
Escrow Agent hereto; provided that 8x8 may assign its rights and obligations
hereunder to any of its subsidiaries, or affiliates or any successor in interest
to the business of 8x8.
(e) Severability. In the event that any part of this
Agreement is declared by any court or other judicial or administrative body to
be null, void, or unenforceable, said provision shall survive to the extent it
is not so declared, and all of the other provisions of this Agreement shall
remain in full force and effect.
(f) Amendment; Waivers. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties, or
conditions hereof may be waived, only by a written instrument executed by the
parties and the Escrow Agent, or in the case of a waiver, by the party or Escrow
Agent waiving compliance. Any waiver by any party or Escrow Agent of any
condition, or of the breach of any provision, term, covenant, representation, or
warranty contained in this Agreement, in any one or more instances, shall not be
deemed to be nor construed as further or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
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123
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
(h) Rules of Construction. The parties hereto and the Escrow
Agent agree that they each have been represented by counsel during the
negotiation and execution of this Agreement and acknowledge that they each
understand all provisions of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
(i) Automatic Succession. Notwithstanding anything in this
Agreement to the contrary, any company into which the Escrow Agent may be merged
or with which it may be consolidated, or any company to whom the Escrow Agent
may transfer a substantial amount of its global escrow business, shall be the
successor to the Escrow Agent without the execution or filing of any paper or
any further act on the part of any of the Parties, provided, however, the Escrow
Agent shall at no time during the term of this Agreement have a substantial
financial relationship with either the 8x8 or Company.
124
IN WITNESS WHEREOF, 8x8, Company, Security Holders' Agent, the
Shareholders, and the Escrow Agent have caused this Agreement to be signed by
them or their respective duly authorized officers, all as of the date first
written above.
8X8, INC.
By:
-------------------------------------
Name:
Title:
SECURITY HOLDERS' AGENT
----------------------------------------
Print Name
----------------------------------------
Sign Name
ESCROW AGENT
----------------------------------------
as Escrow Agent
By:
-------------------------------------
Name:
Title:
SHAREHOLDERS
By:
-------------------------------------
Name:
Title:
125
EXHIBIT A
Name Minimum Price($) Number of 8x8 Shares Owned After the Share Exchange
---- ---------------- ---------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 1.15
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
Marc Sounigo 1.15
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1.15
▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1.15
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Novel 1.15
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1.15
▇▇▇▇▇▇ Novel 1.15
Philippe Dewost 1.15
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇ ▇▇▇▇▇ 1.15
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1.78
▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇ 1.78
▇▇▇▇▇▇ ▇▇▇▇▇ 1.78
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇ 1.78
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 1.78
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1.78
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1.78
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1.78
Olivier Chicha 1.78
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1.78
A-1
126
8X8, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("AGREEMENT") is made as of May 24,
1999, between 8x8, Inc., a Delaware corporation ("8X8"), and the Shareholders of
Odisei S.A. ("ODISEI") listed on Exhibit A hereto, pursuant to that certain
Stock Exchange Agreement, dated as of May 13, 1999 among 8x8, Odisei (the
"COMPANY"), and the Security Holders named therein (the "SHARE EXCHANGE
AGREEMENT").
1. DEFINITIONS. As used in this Agreement:
(a) "CLOSING DATE" means the Closing Date as defined in
Section 2.2 of the Share Exchange Agreement.
(b) "FORM S-3" means such form under the Securities Act as
in effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which similarly permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the commission.
(c) "MATERIAL EVENT" means the happening of any event during
the period that the registration statement described in Section 2 hereof is
required to be effective as a result of which, in the reasonable judgment of
8x8, such registration statement or the related prospectus contains or may
contain any untrue statement of a material fact or omits or may omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(d) "REGISTRABLE SECURITIES" means the 8x8 Shares issued to
the Shareholders including the Indemnification Shares), which are eligible for
registration by 8x8.
(e) "SEC" means the Securities and Exchange Commission.
(f) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
Terms not otherwise defined herein have the meanings given to
them in the Share Exchange Agreement.
2. REGISTRATION.
(a) Initial Registration. 8x8 shall use commercially
reasonable efforts to cause the Registrable Securities issued to the
Shareholders to be registered under the Securities Act no later than 15 days
after the Closing Date, so as to permit the resale thereof, and in connection
therewith shall prepare and file with the SEC and shall use commercially
reasonable efforts to cause to become effective, a Form S-3 covering the
Registrable Securities; provided, however, that the Shareholders shall provide
all such information and materials relating to the Shareholders, as applicable,
and take all such action as may be required in order to permit 8x8 to comply
with all the applicable requirements of the SEC and to obtain any desired
acceleration of the effective date of such Form S-3, such provision of
127
information and materials to be a condition precedent to the obligations of 8x8
pursuant to this Agreement and the Share Exchange Agreement. The offerings made
pursuant to such registrations shall not be underwritten. Notwithstanding the
foregoing, 8x8 shall not be required to cause the Registrable Securities to be
registered if 8x8's legal counsel delivers a legal opinion to the Shareholder
seeking to sell all of its Registrable Securities that such sale may be effected
in a single three-month period without registration under the Securities Act
pursuant to Rule 144 under the Securities Act.
(b) Subsequent Registration. By March 15, 2000, 8x8 shall
use commercially reasonable efforts to cause the Registrable Securities issued
to the Shareholders on March 1, 2000 pursuant to Section 2.4 of the Share
Exchange Agreement, to be registered under the Securities Act, so as to permit
the resale thereof, and in connection therewith shall prepare and file with the
SEC and shall use commercially reasonable efforts to cause to become effective,
a Form S-3 covering the Registrable Securities; provided, however, that such
Shareholders shall provide all such information and materials relating to such
Shareholders, as applicable, and take all such action as may be required in
order to permit 8x8 to comply with all the applicable requirements of the SEC
and to obtain any desired acceleration of the effective date of such Form S-3,
such provision of information and materials to be a condition precedent to the
obligations of 8x8 pursuant to this Agreement and the Share Exchange Agreement.
The offerings made pursuant to such registrations shall not be underwritten.
Notwithstanding the foregoing, 8x8 shall not be required to cause the
Registrable Securities to be registered if 8x8's legal counsel delivers a legal
opinion to the Shareholder seeking to sell all of its Registrable Securities
that such sale may be effected in a single three-month period without
registration under the Securities Act pursuant to Rule 144 under the Securities
Act.
3. POSTPONEMENT OF REGISTRATION.
(a) Registration. Notwithstanding Section 2 above, 8x8 shall
be entitled to postpone the declaration of effectiveness of any Form S-3
prepared and filed pursuant to Section 2 for a reasonable period of time, but
not in excess of 60 calendar days after the applicable deadline, if the Board of
Directors of 8x8, acting in good faith, determines that there exists material
non-public information about 8x8.
(b) Material Event. The Shareholders agree that, upon
receipt of any notice from 8x8 of the happening of a Material Event, the
Shareholders will forthwith discontinue disposition of the Registrable
Securities pursuant to any Form S-3 described in Section 2 until the
Shareholders' receipt of copies of supplemented or amended prospectuses prepared
by 8x8 (which 8x8 will use its commercially reasonable efforts to prepare and
file promptly), and, if so directed by 8x8, the Shareholders will deliver to 8x8
all copies in their possession, other than permanent file copies then in the
Shareholders' possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In no event shall 8x8 delay
causing to be effective a supplement or post-effective amendment to any Form S-3
pursuant to Section 2 or the related prospectus, for more than 90 consecutive
days or 120 days during any 365 consecutive calendar day period.
4. OBLIGATIONS OF 8X8. Except as set forth in Sections 2 and 3, 8x8
shall (i) prepare and file with the SEC the Form S-3 in accordance with Section
2 hereof with respect to the shares of Registrable Securities and shall use
commercially reasonable efforts to cause such Form S-3 to become effective as
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128
provided in Section 2 and to keep such Form S-3 continuously effective until the
earlier to occur of (A) the sale of all of the Registrable Securities so
registered and (B) the first anniversary of the Effective Time; (ii) furnish to
the Shareholders such number of copies of any prospectus (including any
preliminary prospectus and any amended or supplemented prospectus), as the
Shareholders may reasonably request in order to effect the offering and sale of
the shares of the Registrable Securities to be offered and sold, but only while
8x8 shall be required under the provisions hereof to cause such Form S-3 to
remain current; (iii) use its commercially reasonable efforts to register or
qualify the shares of the Registrable Securities covered by such Form S-3 under
the securities or blue sky laws of such jurisdictions as the Shareholders shall
reasonably request (provided that 8x8 shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdiction where it has not
been qualified), and do any and all other acts or things which may be reasonably
necessary or advisable to enable the Shareholders to consummate the public sale
or other disposition of the Registrable Securities in such jurisdictions; (iv)
cause all such Registrable Securities to be listed on each securities exchange
or National Association of Securities Dealers, Inc. Automated Quotation System
on which similar securities issued by 8x8 are then listed; (v) notify the
Shareholders upon the happening of any event as a result of which the prospectus
included in such Form S-3, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; (vi) so long as the Form S-3 remains effective,
promptly prepare, file and furnish to the Shareholders a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of the Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing; (vii) notify the Shareholders promptly after it shall receive
notice thereof, of the date and time any Form S-3 and each post-effective
amendment thereto has become effective or a supplement to any prospectus forming
a part of such Form S-3 has been filed; (viii) notify the Shareholders promptly
of any request by the SEC for the amending or supplementing of such Form S-3 or
prospectus or for additional information; and (ix) advise the Shareholders
promptly after it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the SEC suspending the effectiveness of any Form
S-3 or the initiation or threatening of any proceeding for that purpose and
promptly use commercially reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be issued.
5. EXPENSES. 8x8 shall pay the expenses incurred by 8x8 in
connection with any registration of Registrable Securities pursuant to this
Agreement including all SEC, NASD and blue sky registration and filing fees,
printing expenses, transfer agents' and registrars' fees, and the reasonable
fees and disbursements of 8x8's outside counsel and independent accountants. The
Shareholders shall be responsible for all commissions and transfer taxes, as
well as any other expenses incurred by the Shareholders, other than the fees and
disbursements of counsel to the Shareholders not exceeding $1,000, which shall
be paid by 8x8.
6. INDEMNIFICATION. In the event of any offering registered
pursuant to this Agreement:
(a) 8x8 will indemnify each Shareholder with respect to any
registration effected pursuant to this Agreement, against all expenses, claims,
losses, damages and liabilities (or actions in
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129
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, or any amendment or supplement thereto, or prospectus
related thereto, incident to any such registration, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they are made, not misleading, or any violation by 8x8 of any rule or
regulation promulgated under the Securities Act, or state securities laws, or
common law, applicable to 8x8 in connection with any such registration, and will
reimburse such Shareholder, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that 8x8 will not be liable
in any such case (i) to the extent that any such claim, loss, damage, liability
or expense arises out of or is based in any untrue statement or omission or
alleged untrue statement or omission, made in reliance upon and in conformity
with written information furnished to 8x8 by an instrument duly executed by such
Shareholder and stated to be specifically for use therein or (ii) if a copy of
the final prospectus relating to any registration statement (as then amended or
supplemented if 8x8 shall have furnished any amendments or supplements thereto)
(the "FINAL PROSPECTUS") was not sent or given by or on behalf of such
Shareholder to a purchaser of the Shareholder's Registrable Securities, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Registrable Securities to such purchaser, and if
the final prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
(b) Each Shareholder will severally indemnify 8x8, each of
its directors and officers, each person who controls 8x8 within the meaning of
Section 15 of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) or a material fact contained in
any registration statement, or any amendment or supplement thereto, or
prospectus related thereto, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement or prospectus in reliance upon and in
conformity with written information furnished to 8x8 by an instrument duly
executed by such Shareholder and stated to be specifically for use therein and
will reimburse 8x8, the remaining Shareholders, such directors, officers, or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement or prospectus, in reliance upon and in conformity with
written information furnished to 8x8 by an instrument duly executed by such
Shareholder and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this
Section 6 (the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has notice of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, and the Indemnified Party may participate
in such defense at such party's expense, and provided further that the failure
of any Indemnified Party to give notice as provided herein shall not
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130
relieve the Indemnifying Party of its obligations under this Agreement, except
to the extent, but only to the extent, that the Indemnifying Party's ability to
defend against such claim or litigation is impaired as a result of such failure
to give notice. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Whether or not the defense of any claim or action is assumed by the
Indemnifying Party, such Indemnifying Party will not be subject to any liability
for any settlement without its consent.
(d) The obligations of 8x8 and the Shareholders under this
Section 6 shall survive the completion of any offering of stock in a
registration statement under this Agreement.
7. NON-ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause 8x8
to register Registrable Securities pursuant to this Agreement may not be
assigned by the Shareholders to any person or entity; provided, however, that
upon the death of any Shareholder, the rights to cause 8x8 to register
Registrable Securities pursuant to this Agreement shall inure to such
Shareholder's devisee, legatee or other designee; and provided, further, that a
Shareholder that is a corporation may assign the rights to cause 8x8 to register
Registrable Securities pursuant to this Agreement to any wholly owned subsidiary
of such Shareholder.
8. AMENDMENT OF REGISTRATION RIGHTS. This Agreement may be amended
by the holders of a majority of the Registrable Securities and 8x8 at any time
by execution of an instrument in writing signed on behalf of each of the
parties.
9. TERMINATION. The registration rights set forth in this Agreement
shall terminate as to any Shareholder at such time as all of the Registrable
Securities then held by such Shareholder can be sold by such Shareholder in a
single 3-month period in accordance with Rule 144 under the Securities Act.
10. GRANT OF ADDITIONAL REGISTRATION RIGHTS. The Shareholders
acknowledge that 8x8 may acquire other companies and in the course of such
acquisitions may grant the equity owners thereof registration rights with
respect to their shares of 8x8 on terms which would be negotiated at such time
and may be materially different than the terms of this Agreement.
11. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person or by courier service or
five days after deposit with the United States mail, postage prepaid, addressed
(a) if to the Shareholders, at the Shareholders' addresses as set forth in the
securities register of 8x8 as the case may be or (b) if to 8x8 at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President.
12. GOVERNING LAW; INTERPRETATION. This Agreement shall be construed
in accordance and governed for all purposes by the laws of the State of
California regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
-5-
131
13. SEVERABILITY; SURVIVAL. If any portion of this Agreement is held
by a court of competent jurisdiction to conflict with any federal, state or
local law, or to be otherwise invalid or unenforceable, such portion of this
Agreement shall be of no force or effect, and this Agreement shall otherwise
remain in full force and effect and be construed as if such portion had not been
included in this Agreement.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding of the parties and supersedes all prior discussions, agreement
and understandings relating to the subject matter hereof.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
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132
IN WITNESS WHEREOF, 8x8 and the Shareholders have caused this Agreement
to be executed as of the date first above written.
8X8, INC.
By:
-------------------------------------
Name:
Title:
SHAREHOLDERS
----------------------------------------
Print Name
----------------------------------------
Signature
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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133
EXHIBIT A
Shareholders of Odisei S.A.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ Sounigo
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
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Philippe Dewost
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