EXHIBIT 2.1
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STOCK ACQUISITION AND EXCHANGE AGREEMENT
BY AND AMONG
PINNACLE SYSTEMS, INC.
AVID SPORTS, INC.
THE STOCKHOLDERS OF AVID SPORTS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇, as Stockholders' Representative
AND
BRENDAN CORP.
Dated
as of
June 29, 2000
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STOCK ACQUISITION AND EXCHANGE AGREEMENT
Table of Contents
ARTICLE I - PRE-ACQUISITION AND EXCHANGE TRANSACTIONS..........................1
1.1 TRANSFER OF TEAM SPORTS BUSINESS ASSETS...............................2
1.2 ASSUMPTION OF LIABILITIES.............................................2
1.3 DISTRIBUTION OF BRENDAN STOCK.........................................2
1.4 REFERENCES TO THE COMPANY.............................................2
ARTICLE II - ACQUISITION AND EXCHANGE TRANSACTIONS.............................2
2.1 ACQUISITION OF COMPANY SHARES.........................................2
2.2 DELIVERY OF BUYER COMMON STOCK........................................2
2.3 NO FURTHER OWNERSHIP RIGHTS IN COMPANY SHARES.........................5
ARTICLE III - THE CLOSING......................................................5
3.1 CLOSING...............................................................5
3.2 DELIVERIES BY THE COMPANY.............................................5
3.3 DELIVERIES BY BRENDAN.................................................6
3.4 DELIVERIES BY THE STOCKHOLDERS........................................6
3.5 DELIVERIES BY THE BUYER...............................................7
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................7
4.1 ORGANIZATION OF THE COMPANY AND BRENDAN...............................8
4.2 SUBSIDIARIES..........................................................8
4.3 CAPITAL STRUCTURE.....................................................8
4.4 AUTHORITY.............................................................9
4.5 NO CONFLICT...........................................................9
4.6 CONSENTS..............................................................9
4.7 COMPANY FINANCIAL STATEMENTS.........................................10
4.8 ABSENCE OF UNDISCLOSED LIABILITIES...................................10
4.9 NO CHANGES...........................................................10
4.10 TAX MATTERS.......................................................11
4.11 RESTRICTIONS ON BUSINESS ACTIVITIES...............................13
4.12 TITLE OF PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES;
CONDITION OF EQUIPMENT.........................................14
4.13 INTELLECTUAL PROPERTY.............................................15
4.14 AGREEMENTS, CONTRACTS AND COMMITMENTS.............................17
4.15 INTERESTED PARTY TRANSACTIONS.....................................19
4.16 LITIGATION........................................................19
4.17 BROKERS' AND FINDERS' FEES........................................19
4.18 EMPLOYEE BENEFIT MATTERS..........................................19
4.19 INSOLVENCY........................................................23
4.20 INSURANCE.........................................................23
4.21 COMPLIANCE WITH LAWS..............................................23
4.22 ENVIRONMENTAL MATTERS.............................................23
4.23 WARRANTIES; INDEMNITIES...........................................24
4.24 REPRESENTATIONS COMPLETE..........................................24
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS................24
5.1 OWNERSHIP OF COMPANY SHARES..........................................24
5.2 PURCHASER QUESTIONNAIRE..............................................25
5.3 TAX MATTERS..........................................................25
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5.4 ABSENCE OF CLAIMS BY STOCKHOLDERS....................................25
5.5 AUTHORITY............................................................25
5.6 NO CONFLICT..........................................................25
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF THE BUYER......................25
6.1 ORGANIZATION, STANDING AND POWER.....................................26
6.2 AUTHORITY............................................................26
6.3 NO CONFLICT..........................................................26
6.4 CONSENTS.............................................................26
6.5 BUYER'S SHARES.......................................................27
6.6 CAPITAL STRUCTURE....................................................27
6.7 SEC DOCUMENTS; BUYER FINANCIAL STATEMENTS............................27
6.8 NO MATERIAL ADVERSE CHANGE...........................................27
6.9 ELIGIBILITY TO USE FORM S-3..........................................28
6.10 REPRESENTATIONS COMPLETE..........................................28
6.11 BROKERS' AND FINDERS' FEES........................................28
ARTICLE VII - THE BUYER'S SHARES..............................................28
7.1 SECURITIES ACT EXEMPTION.............................................28
7.2 LEGENDS..............................................................28
7.3 REPRESENTATIONS REGARDING SECURITIES LAW MATTERS.....................29
ARTICLE VIII - COVENANTS OF THE COMPANY.......................................29
8.1 INTERIM CONDUCT OF BUSINESS..........................................29
8.2 ACCESS...............................................................30
8.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ FILINGS............................................31
8.4 AUTHORIZATION FROM OTHERS............................................31
8.5 CONSUMMATION OF AGREEMENT............................................31
8.6 SPIN-OUT AND TERMINATION OF THE 401(K) PLAN..........................31
8.7 EMPLOYEE MATTERS....................................................31
8.8 SUPPLEMENTAL DISCLOSURES.............................................32
ARTICLE VIIIA.................................................................32
8A.1 AUTHORIZATION FROM OTHERS.........................................32
8A.2 CONSUMMATION OF AGREEMENT.........................................32
8A.3 NO TRANSFER OR ENCUMBRANCE OF SHARES..............................32
ARTICLE IX - COVENANTS OF BUYER...............................................32
9.1 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ FILINGS............................................33
9.2 AUTHORIZATION FROM OTHERS............................................33
9.3 CONSUMMATION OF AGREEMENT............................................33
9.4 TRANSITION SERVICES AND ARBITRATION COOPERATION......................33
9.5 401(K) PLAN MATTERS..................................................33
9.5 SUPPLEMENTAL DISCLOSURES.............................................34
ARTICLE X - CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER..................34
10.1 ACCURACY OF WARRANTIES; PERFORMANCE OF COVENANTS..................34
10.2 NO PENDING ACTION.................................................34
10.3 HSR ACT...........................................................35
10.4 OTHER AGREEMENTS AND CONSENTS.....................................35
10.5 REVENUE BACKLOG...................................................35
10.7 SECURITIES LAW COMPLIANCE.........................................35
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ARTICLE XI - CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
COMPANY AND THE STOCKHOLDERS...................................35
11.1 ACCURACY OF WARRANTIES; PERFORMANCE OF COVENANTS..................35
11.2 NO PENDING ACTION.................................................36
11.3 HSR ACT...........................................................36
11.4 OTHER AGREEMENTS AND CONSENTS.....................................36
ARTICLE XII - TERMINATION OF AGREEMENT........................................36
12.1 TERMINATION.......................................................36
12.2 EFFECT OF TERMINATION.............................................37
12.3 RIGHT TO PROCEED..................................................37
ARTICLE XIII - INDEMNIFICATION................................................37
13.1 JOINT AND SEVERAL INDEMNIFICATION BY THE STOCKHOLDERS.............38
13.1A SEVERAL INDEMNIFICATION BY THE STOCKHOLDERS.......................38
13.1B INDEMNIFICATION BY THE COMPANY....................................38
13.1C INDEMNIFICATION BY BRENDAN........................................38
13.2 INDEMNIFICATION BY BUYER..........................................38
13.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.............39
13.4 LIMITATIONS OF LIABILITY FOR LOSSES...............................39
13.5 CLAIMS............................................................41
13.6 REQUEST FOR INDEMNIFICATION.......................................41
13.7 EXCLUSIVE REMEDY..................................................42
ARTICLE XIV - REGISTRATION....................................................42
14.1 REGISTRATION......................................................42
14.2 COVENANTS OF THE STOCKHOLDERS.....................................43
14.3 EXPENSES..........................................................43
14.4 EXCLUSIVE OBLIGATION TO REGISTER..................................43
14.5 STATE SECURITIES LAWS.............................................43
14.6 INDEMNIFICATION AND CONTRIBUTION..................................43
14.7 MISCELLANEOUS PROVISIONS REGARDING REGISTRATION...................45
14.8 REPORTS UNDER THE EXCHANGE ACT....................................46
14.9 TRANSFER OF REGISTRATION RIGHTS...................................47
ARTICLE XV STOCKHOLDER REPRESENTATIVE..................................47
15.1 STOCKHOLDER REPRESENTATIVE........................................47
ARTICLE XVI - GENERAL PROVISIONS..............................................49
16.1 FURTHER ACTION....................................................49
16.2 SURVIVAL..........................................................49
16.3 AMENDMENT, WAIVER AND CONSENT.....................................49
16.4 NOTICES...........................................................50
16.5 PUBLICITY AND DISCLOSURES.........................................51
16.6 COUNTERPARTS AND EFFECTIVENESS....................................51
16.7 PARTIES IN INTEREST...............................................51
16.8 ENTIRE TRANSACTION................................................52
16.9 GOVERNING LAW.....................................................52
16.10 ARBITRATION.......................................................52
16.11 HEADINGS..........................................................53
16.12 RULES OF CONSTRUCTION.............................................53
16.13 EXPENSES..........................................................53
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SCHEDULES
Schedule 1 Stockholders
Schedule 1.1 Excluded Assets
Schedule 1.2 Assumed Liabilities
Schedule 2.2(a) Buyer's Shares
Schedule 3.3 Stockholders Parties to Non-Competition Agreement
Schedule 4.1 Team Sports Related Names
Schedule 4.2 Subsidiaries
Schedule 4.3(a) Unauthorized Invalid Outstanding Shares
Schedule 4.3(b) Stock Option Plans; Options Outstanding
Schedule 4.5 Conflicts
Schedule 4.6 Consents
Schedule 4.7 Financial Statements
Schedule 4.8 Liabilities
Schedule 4.9 Changes
Schedule 4.10(b) Tax Returns and Delinquencies; Tax Exempt Use Property
Schedule 4.10(c) Executive Compensation Tax
Schedule 4.11 Restrictions on Business Activities
Schedule 4.12(a) Leased Properties
Schedule 4.12(b) Liens
Schedule 4.12(c) Equipment
Schedule 4.12(d) Customer Information
Schedule 4.13(b) Registered Intellectual Property
Schedule 4.13(c) Permitted Liens
Schedule 4.13(g) End-user Licenses
Schedule 4.13(i) Maintenance of Intellectual Property
Schedule 4.13(j) Intellectual Property Disputes
Schedule 4.13(k) Intellectual Property Infringement
Schedule 4.13(m) Confidential Information
Schedule 4.14(a) Contracts
Schedule 4.14(b) Consents
Schedule 4.15 Interested Party Transactions
Schedule 4.16 Litigation
Schedule 4.18(b) Employee Plans
Schedule 4.18(d) Employee Plan Compliance
Schedule 4.18(g) Post-Employment Obligations
Schedule 4.18(i) Effect of Transaction
Schedule 4.18(k) Labor
Schedule 4.20 Insurance
Schedule 4.23 Warranties; Indemnities
Schedule 5.1 Restrictions on Stock Transfer
Schedule 8.1 Interim Conduct of Business
Schedule 8.6 Employees
EXHIBITS
Exhibit A Form of Escrow Agreement
Exhibit B Form of License Agreement
Exhibit C Form of Legal Opinion of Counsel to the Company
Exhibit D Form of Non-Competition Agreement
Exhibit E Form of Brendan License Agreement
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Exhibit F Form of Sublease Agreement
Exhibit G Form of Legal Opinion of Counsel to Buyer
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STOCK ACQUISITION AND EXCHANGE AGREEMENT
THIS STOCK ACQUISITION AND EXCHANGE AGREEMENT is made and entered into
as of this 29th day of June, 2000 by and among PINNACLE SYSTEMS, INC., a
California corporation ("Buyer"), AVID SPORTS, INC., a Delaware corporation (the
"Company"), each of those stockholders of the Company listed on Schedule 1
hereto (each of such stockholders being referred to herein individually as a
Stockholder" and collectively as the "Stockholders), ▇▇▇▇▇ ▇▇▇▇▇▇▇, as the
Stockholders' Representative (the "Stockholders' Representative") and BRENDAN
CORP., a Delaware corporation ("Brendan").
WHEREAS, each Stockholder holds of record and beneficially those shares
of the capital stock of the Company listed opposite his or its name on Schedule
1 hereto, which shares of capital stock constitute all of the issued and
outstanding shares of the capital stock of the Company (such shares being
referred to collectively as the "Company Shares");
WHEREAS, the Company operates a new media division of its business
which provides a fully automated process for real-time collection and
distribution of sports statistics and other information on the internet (the
"New Media Business");
WHEREAS, the Company will contribute to Brendan all of the Excluded
Assets (as defined in Section 1.1 below) which are currently used by the Company
in connection with the New Media Business, subject to certain Assumed
Liabilities (also as defined in Section 1.2) which shall be assumed by Brendan;
WHEREAS, the Company will then distribute the issued and outstanding
capital stock of Brendan to the Stockholders; and
WHEREAS, subject to and immediately following the contribution of the
Excluded Assets and the distribution of Brendan capital stock, the Buyer is
prepared to acquire, and the Stockholders are prepared to exchange, all of the
Company Shares in consideration for shares of the Buyer's common stock, having
no par value (the "Buyer's Common Stock"), subject to the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
ARTICLE I
PRE-ACQUISITION AND EXCHANGE TRANSACTIONS
On or prior to the Closing Date (as defined in Section 3.1 hereof), the
following transactions shall have been effected:
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Section 1.1 Transfer of New Media Business Assets. The Company shall
have duly and validly contributed to Brendan all of the Company's rights, title
and interest in and to all of the properties, assets and business of the Company
used in or associated with the Company's New Media Business, including, without
limitation, the accounts receivable listed on Schedule 1.1 hereto (the "Excluded
Assets").
Section 1.2 Assumption of Liabilities. In connection with the
contribution of the Excluded Assets to Brendan, Brendan shall have assumed and
agreed to satisfy or perform when due the liabilities of the Company set forth
on Schedule 1.2 hereto and those liabilities relating to employees described in
Section 8.7 hereof (the "Assumed Liabilities").
Section 1.3 Distribution of Brendan Stock. Immediately following
effecting the transactions set forth in Section 1.1 and 1.2 hereof, the Company
shall have duly and validly distributed all of the issued and outstanding shares
of capital stock of Brendan to the Stockholders.
Section 1.4 References to the Company. It is acknowledged that all
references to the Company set forth in this Agreement or in any schedule or
exhibit hereto or agreement, certificate, instrument or other document delivered
pursuant to the terms of this Agreement shall refer to the Company exclusive of
the New Media Business, the Excluded Assets and Assumed Liabilities.
Notwithstanding anything expressed or implied in this Agreement to the contrary,
none of the representations, warranties, covenants or agreements made by the
Company, Brendan or the Stockholders pursuant to this Agreement (i) pertaining
to the Company shall refer to or include the New Media Business, the Excluded
Assets or the Assumed Liabilities, (ii) pertaining to the Company's business
shall refer to or include the New Media Business, (iii) pertaining to the
Company's assets shall refer to or include the Excluded Assets, and (iv)
pertaining to the Company's liabilities shall refer to or include the Assumed
Liabilities.
ARTICLE II
ACQUISITION AND EXCHANGE TRANSACTIONS
Section 2.1 Acquisition of Company Shares. Subject to the terms and
conditions set forth in this Agreement, the Buyer hereby agrees to acquire at
the Closing (as defined in Section 3.1 hereof), and each of the Stockholders
hereby agrees to exchange at the Closing, those Company Shares listed opposite
the name of such Stockholder on Schedule 1 hereto, in each case free and clear
of any and all liens, pledges, security interest, claims, charges, restrictions
and encumbrances of any kind or nature whatsoever (collectively, "Liens"), other
than restrictions on transfer arising under federal and state securities laws.
Section 2.2 Delivery of Buyer Common Stock.
(a) In consideration of the acquisition of the Company Shares,
the Buyer hereby agrees to issue, against delivery of the Company Shares, an
aggregate of 944,213 shares of the Buyer's Common Stock (the "Buyer's Shares")
of which 755,351 Buyer's Shares shall be delivered to the Stockholders at the
Closing, with each Stockholder to receive that number of
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Buyer's Shares set forth opposite his or its name set forth on Schedule 2.2(a)
hereto and of which 188,862 Buyer's Shares (the "Escrow Shares") shall be
delivered to State Street Bank and Trust Company, as escrow agent (the "Escrow
Agent"), such Buyer's Shares to be held by the Escrow Agent pursuant to an
Escrow Agreement substantially in the form of Exhibit A annexed hereto (the
"Escrow Agreement"). The Escrow Agreement shall provide that Escrow Shares in
excess of Escrow Shares having an aggregate fair market value (as set forth in
Section 3(g) of the Escrow Agreement) of $2,300,000, if any, shall be released
from escrow upon the first anniversary of the Closing Date and that the then
remaining Escrow Shares shall be released from escrow upon the second
anniversary of the Closing Date, in each case in accordance with the terms and
conditions of the Escrow Agreement. The number of Buyer's Shares to be issued as
consideration for each Company Share shall be equal to the "Applicable Fraction"
(as defined in Section 2.2(b) hereof).
(b) Definitions.
(i) Applicable Fraction. The "Applicable Fraction"
shall be equal to the Per Share Amount divided by the Average Closing Price. In
the event that the Buyer changes the number of shares of Buyer's Common Stock or
securities convertible or exchangeable into or exercisable for shares of Buyer's
Common Stock issued and outstanding prior to the Closing Date as a result of a
reclassification, stock split, reverse stock split, stock dividend or
distribution, recapitalization, subdivision or other similar transaction, the
Applicable Fraction shall be proportionately and equitably adjusted.
(ii) Per Share Amount. The "Per Share Amount" is
$3.49, which is the quotient (rounded to the second decimal place) of (A)
$23,000,000 plus $605,143 (which is the aggregate per share exercise price of
all outstanding Vested Company Stock Options) divided by (B) the Diluted Shares.
(iii) Average Closing Price. The "Average Closing
Price" is $22.51875, which is the average of the last sales prices of the Buyer
Common Stock as reported on the Nasdaq National Market for the 10 consecutive
trading days ending on June 23, 2000.
(iv) Diluted Shares. The "Diluted Shares" shall mean
that number equal to the sum of (A) the number of Company Shares issued and
outstanding immediately prior to the Closing Date (regardless of whether such
shares are unvested, subject to any right of repurchase, risk of forfeiture or
other condition in favor of the Company at such time) plus (B) the number of
Company Shares for which the Vested Company Stock Options may be exercised
immediately prior to or upon the Closing.
(v) Vested Company Stock Options. The "Vested Company
Stock Options" refers to vested Company Stock Options (as defined in paragraph
(c) below) that may be exercised immediately prior to or upon the Closing.
(c) Stock Options. On the Closing Date, each outstanding
option to purchase Company Shares (each, a "Company Stock Option" and
collectively, "Common Stock Options") under the Company's 1999 Stock Option Plan
and 2000 Stock Option Plan (collectively, the
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"Option Plans" and each individually, an "Option Plan"), whether or not vested,
shall by virtue of the transactions contemplated by Article II hereof be assumed
by Buyer (the "Assumed Company Options"). Each Assumed Company Option so assumed
by Buyer under this Agreement will be subject to the terms and conditions of the
relevant Option Plan, except that (i) each Assumed Company Option will be
exercisable (or will become exercisable in accordance with its terms) for that
number of whole shares of Buyer's Common Stock equal to the product of the
number of Company Shares that were issuable upon exercise of such Assumed
Company Option immediately prior to the Closing Date multiplied by the
Applicable Fraction, rounded down to the nearest whole number of shares of
Buyer's Common Stock and (ii) the per share exercise price for the shares of
Buyer's Common Stock issuable upon exercise of the Assumed Company Option will
be equal to the quotient determined by dividing the exercise price per share of
Company Shares at which such Assumed Company Option was exercisable immediately
prior to the Closing Date by the Applicable Fraction, rounded up to the nearest
tenth of a cent. Company Stock Options shall be assumed by the Buyer in such
manner that Buyer (i) is a corporation "assuming a stock option in a transaction
to which Section 424(a) applies" within the meaning of Section 424 of the Code
(as such term is defined below) or (ii) to the extent that Section 424 of the
Code does not apply to any such Assumed Company Options, would be such a
corporation were Section 424 of the Code applicable to such Assumed Company
Options. From and after the Closing Date, all references to the Company in the
Option Plans and the applicable stock option agreements issued thereunder shall
be deemed to refer to the Buyer. Each Assumed Company Option shall be
exercisable upon the same terms and conditions as under the applicable Option
Plan and the applicable option agreement issued thereunder, except as set forth
above in this paragraph (c).
(d) Filing of Registration Statement. In respect of each
Assumed Company Option, and the shares of Buyer's Common Stock underlying such
Assumed Company Option, Buyer shall file, promptly, but in any event within
thirty (30) days after the Closing Date, and keep current, a registration
statement on Form S-8 or other appropriate registration statement for as long as
the Assumed Company Options remain outstanding.
(e) Reservation of Shares. Buyer shall (i) on or prior to the
Closing Date, reserve for issuance that number of shares of Buyer's Common Stock
that will become subject to Assumed Company Options and (ii) from and after the
Closing Date, upon exercise of Assumed Company Options in accordance with the
terms thereof, make available for issuance all shares of Buyer's Common Stock
covered thereby.
(f) Incentive Stock Options. It is the intention of the
parties that the Assumed Stock Options qualify following the Closing Date as
incentive stock options as defined in Section 422 of the Code to the extent that
the Assumed Stock Options qualified as incentive stock options prior to the
Closing Date.
(g) No Fractional Shares. Notwithstanding any other provision
of this Agreement to the contrary, each holder of Company Shares exchanged for
Buyer's Shares pursuant to the terms of this Agreement who would otherwise have
been entitled to receive a
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fraction of a share of Buyer's Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, a whole
share of Buyer's Common Stock.
(h) Lost Certificates. If any certificate representing Company
Shares shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact, in form and substance reasonably satisfactory to the
Buyer, by the person claiming such certificate to be lost, stolen or destroyed,
Buyer shall issue in exchange for such lost, stolen or destroyed certificate the
shares of Buyer's Common Stock.
Section 2.3 No Further Ownership Rights in Company Shares. All Buyer's
Shares paid in exchange of the Company Shares in accordance with the terms
hereof shall be deemed to be full satisfaction of each Stockholder's rights
pertaining to the Company Shares.
ARTICLE III
THE CLOSING
Section 3.1 Closing. The closing of the transactions contemplated by
Article II of this Agreement (the "Closing") shall occur at the offices of
Brown, Rudnick, Freed & Gesmer, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ at 10:00 A.M. on June 29, 2000 or such other date and time upon which the
Buyer and the Company may agree (the "Closing Date").
Section 3.2 Deliveries by the Company. At the Closing, the Company
shall deliver or cause to be delivered the following documents and instruments:
(a) a copy of the Certificate of Incorporation of the Company
with all amendments thereto, certified by the Secretary of State of the State of
Delaware as of a recent date;
(b) a certificate of legal existence and good standing of the
Company (in long form indicating date of filing of the Certificate of
Incorporation and all amendments) issued by the Secretary of State of the State
of Delaware as of a recent date;
(c) a certificate of the Secretary of the Company as to (i)
the By-laws of the Company, (ii) the adoption of resolutions by the board of
directors and, to the extent required, Stockholders of the Company authorizing
the transactions contemplated hereby and (iii) the incumbency of each of the
officers of the Company who will execute any of the documents to be delivered in
connection with the transactions contemplated hereby;
(d) resignations of each of the officers and directors of the
Company, effective as of the Closing Date;
(e) the Escrow Agreement;
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(f) a License Agreement substantially in form of Exhibit B
annexed hereto (the "License Agreement") between the Company and Avid
Technology, Inc.;
(g) an opinion of ▇▇▇▇▇▇▇, ▇▇▇▇, LLP, counsel to the Company,
addressed to the Buyer and in substantially the form annexed hereto as Exhibit
C; and
(h) such other documents as may reasonably be required to
effect any of the transactions contemplated by this Agreement.
Section 3.3 Deliveries by Brendan. At the Closing, Brendan shall
deliver or cause to be delivered the following documents and instruments:
(a) a copy of the Certificate of Incorporation of Brendan,
with all amendments thereto, certified by the Secretary of State of the State of
Delaware as of a recent date;
(b) a certificate of legal existence and good standing of
Brendan (in long form indicating date of filing of the Certificate of
Incorporation and all amendments) issued by the Secretary of State of the State
of Delaware as of a recent date;
(c) a certificate of the Secretary of Brendan as to (i) the
By-Laws of Brendan, (ii) the adoption of resolutions by the board of directors
and, to the extent required, stockholder of Brendan authorizing the transactions
contemplated hereby and (iii) the incumbency of each of the officers of Brendan
who will execute any of the documents to be delivered in connection with the
transactions contemplated hereby;
(d) a Non-Competition Agreement substantially in the form of
Exhibit D annexed hereto (the "Non-Competition Agreement") under which Brendan
and its management and those Stockholders listed on Schedule 3.3 hereto shall
agree to refrain from engaging in certain activities which are competitive with
the Company's Team Sports business.
(e) a License Agreement between the Buyer and Brendan in the
form of Exhibit E annexed hereto (the "Brendan License Agreement");
(f) a Sublease Agreement substantially in the form of Exhibit
F annexed hereto (the "Sublease") under which the Company shall sublease a
portion of its facility at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ to Brendan
for the operation of the New Media Business; and
(g) such other documents as may reasonably be required to
effect any of the transactions contemplated by this Agreement.
Section 3.4 Deliveries by the Stockholders. At the Closing, the
Stockholders shall deliver or cause to be delivered the following documents and
instruments:
(a) certificates representing all of the Company Shares duly
endorsed in blank or accompanied by a stock power duly endorsed in blank or, if
applicable, an affidavit of lost certificate in form and substance reasonably
satisfactory to the Buyer;
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(b) the Escrow Agreement;
(c) the Non-Competition Agreement duly executed by those
Stockholders listed on Schedule 3.3 hereto; and
(d) such other documents as may reasonably be required to
effect any of the transactions contemplated by this Agreement.
Section 3.5 Deliveries by the Buyer. At the Closing, Buyer shall
deliver or cause to be delivered the following documents and instruments:
(a) a copy of the Certificate of Incorporation of the Buyer
with all amendments thereto, certified by the Secretary of State of the State of
California as of a recent date;
(b) a certificate of legal existence and good standing of
Buyer (in long form indicating date of filing of Certificate of Incorporation
and all amendments) issued by the Secretary of State of the State of California
as of a recent date;
(c) a certificate of the Secretary of the Buyer as to (i) the
By-laws of the Buyer, (ii) the adoption of resolutions by the board of directors
of the Buyer authorizing the transactions contemplated hereby and (iii) the
incumbency of each of the officers of the Buyer who will execute any of the
documents to be delivered in connection with the transactions contemplated
hereby;
(d) a duly executed letter of instruction to ChaseMellon
Shareholder Services, LLC, the Buyer's transfer agent, instructing the transfer
agent to issue the Buyer's Shares to the Stockholders in the names and amounts
set forth on Schedule 2.2(a) hereto and to issue the Escrow Shares to the Escrow
Agent;
(e) the Non-Competition Agreement;
(f) the Escrow Agreement;
(g) the Brendan License Agreement;
(h) an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Gesmer, counsel to
Buyer, addressed to the Stockholders and in substantially the form annexed
hereto as Exhibit G; and
(i) such other documents as may reasonably be required to
effect any of the transactions contemplated by this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Buyer to enter into this Agreement, the Company
hereby represents to Buyer:
Section 4.1 Organization of the Company and Brendan. Each of the
Company and Brendan is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of the Company and
Brendan has the corporate power to own its properties and to carry on its
business as now being conducted. Each of the Company and Brendan has delivered a
true and correct copy of their respective Certificates of Incorporation and
Bylaws, each as amended to date, to the Buyer. The Team Sports business now
being conducted by the Company have not been conducted under any name besides
those set forth on Schedule 4.1.
Section 4.2 Subsidiaries. Other than Brendan or as set forth on
Schedule 4.2, the Company does not have, and has never had, any subsidiaries and
does not otherwise own, and has not otherwise owned, directly or indirectly, any
shares in the capital stock of or any similar equity, partnership, or similar
ownership interest in, or control, any corporation, partnership, association,
joint venture or other business entity.
Section 4.3 Capital Structure.
(a) The authorized capital stock of the Company consists of
22,000,000 authorized shares of common stock, $0.01 par value per share, of
which (i) 5,196,492 shares of Common Stock are issued and outstanding as of the
date hereof and (ii) 905,030 shares of Series A Convertible Preferred Stock
("Preferred Stock") are issued and outstanding as of the date hereof. No shares
of capital stock are held in the treasury of the Company. Other than as set
forth on Schedule 4.3(a), all outstanding shares of the Company's Common Stock
and Preferred Stock are duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights created by statute, the
Certificate of Incorporation or the Bylaws of the Company, or any agreement to
which the Company is a party or by which it is bound, and have been issued in
compliance with federal and state securities laws. There are no declared or
accrued unpaid dividends with respect to any shares of the Company's Common
Stock or Preferred Stock. Other than the Company's Common Stock and Preferred
Stock, the Company has no other capital stock authorized, issued or outstanding.
(b) Except as listed on Schedule 4.3(b), the Company has never
adopted or maintained any stock option plan or other plan providing for equity
compensation of any person. Except as listed on Schedule 4.3(b), there are no
options, warrants, calls, rights, commitments or agreements of any character,
written or oral, to which the Company is a party or by which the Company is
bound obligating the Company to issue, deliver, sell, repurchase or redeem, or
cause to be issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Company or obligating the Company 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. Other than as
set forth on Schedule 4.3(b), there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or other similar rights with
respect to the
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Company. Except as set forth on Schedule 4.3(b), there are no voting trusts,
proxies, or other voting agreements or understandings with respect to the
capital stock of the Company.
Section 4.4 Authority. Each of the Company and Brendan has all
requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company and Brendan, and no further action is required on the part of either of
them to authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by each of the Company and
Brendan, and, assuming the due authorization, execution and delivery by the
other parties hereto, constitutes a legal, valid and binding obligation of each
of the Company and Brendan, enforceable against them in accordance with its
terms subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to creditors' rights generally and (ii) the
availability of injunctive relief and other equitable remedies.
Section 4.5 No Conflict. Except as set forth on Schedule 4.5, the
execution and delivery by each of the Company and Brendan of this Agreement and
the consummation of the transactions contemplated hereby will not conflict with
or result in any violation of, or default under (with or without notice or lapse
of time, or both), or give rise to a right of termination, cancellation,
modification or acceleration of any obligation or loss of any benefit under (any
such event, a "Conflict") (i) any provision of the Certificate of Incorporation
or the Bylaws of either the Company or Brendan, (ii) any mortgage, indenture,
lease, contract or other agreement or instrument, permit, concession, franchise
or license to which either the Company or Brendan or either of their respective
properties or assets is subject, or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to either the Company and Brendan
or its properties or assets, except with respect to clause (ii), as are not
reasonably likely to have a material adverse effect on the properties, assets,
financial condition, business or results of operation of the Company or that
would materially impair the ability of the Company, the Stockholders or Brendan
to perform their respective obligations hereunder (a "Material Adverse Effect").
Section 4.6 Consents. Other than such filings as may be required under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act") and the expiration or early termination of the waiting period thereunder
and such other consents, waivers, approvals, orders, authorizations,
registrations, declarations and filings as are listed on Schedule 4.6 hereto, 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 or other foreign governmental authority,
instrumentality, agency or commission ("Governmental Entity") or any third
party, including a party to any agreement with either the Company or Brendan (so
as not to trigger any Conflict), is required by or with respect to the Company
or Brendan in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
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Section 4.7 Company Financial Statements. Attached hereto as Schedule
4.7 are the following financial statements of the Company (collectively the
"Financial Statements"): unaudited balance sheet as of May [31], 2000 (the
"Current Balance Sheet") and audited statement of operations for the year ended
December 31, 1999. The Financial Statements are correct in all material respects
and present fairly the financial condition and operating results of the Company
as of the dates and during the periods indicated therein, subject to the absence
of footnotes and normal year-end adjustments.
Section 4.8 Absence of Undisclosed Liabilities . The Company has no
liability, indebtedness, obligation, expense, claim, deficiency, guaranty or
endorsement of any type, whether accrued, absolute, contingent, matured,
unmatured or other of any nature (collectively, the "Section 4.8 Liabilities"),
except any Section 4.8 Liabilities stated or adequately reserved against on the
Current Balance Sheet or as set forth on Schedule 4.8 hereto and except for any
Section 4.8 Liabilities not required under generally accepted accounting
principles consistently applied with past practice, to be disclosed as a
liability on a balance sheet of the Company.
Section 4.9 No Changes. Except as otherwise set forth in Schedule 4.9
or in connection with the transactions contemplated by this Agreement, since the
date of the Current Balance Sheet, there has not been, occurred or arisen with
respect to the Company any:
(a) transaction except in the ordinary course of business as
conducted on that date and consistent with past practices;
(b) amendments or changes to the Certificate of Incorporation
or the Bylaws of the Company;
(c) any single capital expenditure or commitment exceeding
$50,000;
(d) destruction of, damage to or loss of any material assets,
material business or material customer (whether or not covered by insurance);
(e) revaluation of any of the assets of the Company;
(f) declaration, setting aside or payment of a dividend or
other distribution with respect to the Company Common Stock or any direct or
indirect redemption, purchase or other acquisition by the Company of its capital
stock other than the distribution to Stockholders of capital stock of Brendan;
(g) increase in the salary or other compensation payable or to
become payable to any of the Company's employees or advisors, or the
declaration, payment or commitment or obligation of any kind for the payment, of
a bonus or other additional salary or compensation to any such person except in
each case in the ordinary course of business consistent with past practices;
(h) agreement, contract, covenant, instrument, lease, or
commitment to which the Company is a party or by which it or any of its assets
is bound and which is material to the
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Company or its business or any termination, extension, amendment or modification
of the terms of any such agreement, contract, covenant, instrument, lease, or
commitment to which the Company is a party or by which it or any of its assets
is bound, except in each case entered into in the ordinary course of business in
connection with sales of products;
(i) sale, lease, license or other disposition of any of the
material assets or properties of the Company or any creation of any security
interest in such assets or properties, in each case, other than in the ordinary
course of business, or in connection with any Permitted Liens (defined in
Section 4.12(b));
(j) loan to any person or entity, incurring of any
indebtedness, guaranteeing of any indebtedness, issuance or sale of any debt
securities or guaranteeing of any debt securities of others, except as set forth
on the Current Balance Sheet or Schedule 4.8;
(k) waiver or release of any material right or claim,
including any material write-off or other compromise of any account receivable;
(l) notice of any claim or potential claim of ownership by any
person other than the Company of any of "Company Intellectual Property" (as
defined in Section 4.13 hereof) owned by or developed or created by the Company
or of infringement by the Company of any other person's "Intellectual Property"
(as defined in Section 4.13 hereof);
(m) (i) sale of any Company Intellectual Property or the
entering into of any license agreement, security agreement, assignment or other
conveyance or option, with respect to Company Intellectual Property with any
person or entity (other than standard customer license or similar agreements
entered into in the ordinary course of business consistent with past practice),
or (ii) the purchase or other acquisition of any Intellectual Property or the
entering into of any license agreement, security agreement, assignment or other
conveyance or option with respect to the Intellectual Property of any person or
entity (other than off-the-shelf software), or (iii) the change in pricing or
royalties set or charged by the Company to its customers or licensees or in
pricing or royalties set or charged by persons who have licensed Intellectual
Property to the Company;
(n) any event or condition of any character that has had a
Material Adverse Effect; provided that none of the following shall be deemed,
either alone or in combination, to constitute a Material Adverse Effect: (i) a
change that results from conditions affecting the Company's industry generally
or (ii) a change that results from conditions affecting the U.S. or the world
economy generally; or
(o) agreement by the Company or Brendan or any of the officers
or employees thereof to do any of the things described in the preceding clauses
of this Section 4.9 (other than the transactions contemplated by this
Agreement).
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Section 4.10 Tax Matters
(a) Definition of Taxes. For the purposes of this Agreement,
"Tax" (including, with correlative meanings, the terms "Taxes" and "Taxable")
means (i) any and all federal, state, local and foreign taxes, assessments and
other similar governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts;
(ii) any liability for the payment of any amounts of the type described in
clause (i) as a result of being a member of an affiliated, consolidated,
combined or unitary group for any period; and (iii) any liability for the
payment of any amounts of the type described in clause (i) or (ii) as a result
of any express or implied obligation to indemnify any other person or as a
result of any obligations under any agreements or arrangements with any other
person with respect to such amounts and including any liability for taxes of a
predecessor entity.
(b) Tax Returns and Audits.
(i) Except as indicated on Schedule 4.10(b), the
Company as of the date hereof have prepared and timely filed all federal, state,
local and foreign returns, estimates, information statements and reports
("Returns") required to be filed prior to the date hereof relating to any and
all Taxes concerning or attributable to the Company, and such Returns are true
and correct, and have been completed, in all material respects, in accordance
with applicable law.
(ii) Except as indicated on Schedule 4.10(b), as of
the date hereof, the Company has paid the aggregate amount of Taxes it is
required to pay concerning or attributable to the Company or its business and
has withheld with respect to its employees all federal and state income taxes,
Federal Insurance Contribution Act ("FICA"), Federal Unemployment Tax Act
("FUTA") and other Taxes required to be withheld.
(iii) Except as indicated on Schedule 4.10(b), the
Company has not been delinquent in the payment of any Tax, nor is there any Tax
deficiency, assessed or proposed against the Company. The Company has not
executed any waiver of any statute of limitations on, or any waiver extending
the period for, the assessment or collection of any Tax.
(iv) No audit or other examination of any Return of
the Company is presently in progress, nor has the Company been notified of any
request for such an audit or other examination.
(v) The Company has no liabilities for unpaid
federal, state, local and foreign Taxes incurred prior to the date of the
Current Balance Sheet which have not been accrued or reserved on the Current
Balance Sheet, whether asserted or unasserted, contingent or otherwise, and the
Company has not incurred any liability for Taxes since the date of the Current
Balance Sheet other than in the ordinary course of business.
(vi) There are no Liens relating to or attributable
to Taxes other than Liens for Taxes not yet due and payable.
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(vii) There is, to the knowledge of the Company, no
basis for the assertion of any claim for Taxes that, if adversely determined,
would result in any Lien on the assets of the Company.
(viii) Except as indicated on Schedule 4.10(b), none
of the Company's assets is treated as "tax-exempt use property," within the
meaning of Section 168(h) of the Internal Revenue Code of 1986, as amended (the
"Code").
(ix) Except as indicated on Schedule 4.10(b), the
Company has not filed any consent agreement under Section 341(f) of the Code or
agreed to have Section 341(f)(4) of the Code apply to any disposition of a
subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by the
Company.
(x) The Company is not a party to any tax sharing,
indemnification or allocation agreement nor does the Company owe any amount
under any such agreement.
(xi) The Company's tax basis in its assets for
purposes of determining its future amortization, depreciation and other federal
income Tax deductions is accurately reflected on the Company's tax books and
records.
(xii) The Company is not currently, and has never at
any time been, a "United States Real Property Holding Corporation" within the
meaning of Section 897(c)(2) of the Code.
(xiii) No adjustment relating to any Return filed by
the Company has been proposed formally or informally by any tax authority to the
Company or any of its representative.
(c) Executive Compensation Tax. Except as set forth on
Schedule 4.10(c), there is no contract, agreement, plan or arrangement to which
the Company is a party as of the date hereof, including but not limited to the
provisions of this Agreement, covering any employee or former employee of the
Company, which, individually or collectively, could give rise to the payment of
any amount that would not be deductible pursuant to Sections 280G, 404 or 162(m)
of the Code.
(d) Offset of Gain on Distribution of Brendan Stock. The
Company has sufficient current-year net operating losses and/or net operating
loss carryforwards to fully offset any Taxable gain resulting from the
distribution of the stock of Brendan to the Stockholders as contemplated in
Article I hereof.
Section 4.11 Restrictions on Business Activities. Except as set forth
on Schedule 4.11, or in connection with this Agreement, the documents to be
executed pursuant hereto, or the transactions contemplated hereby or thereby,
there is no agreement (non-compete or otherwise), commitment, judgment,
injunction, order or decree to which the Company is a party or otherwise binding
upon the Company which has or may reasonably be expected to have the effect of
prohibiting or impairing in any material respect (i) any business practice of
the Company, (ii) any
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acquisition of property (tangible or intangible) by the Company, or (iii) the
conduct of business by the Company. Without limiting the foregoing, except as
set forth on Schedule 4.11 or in connection with this Agreement, the documents
to be executed pursuant hereto, or the transactions contemplated hereby or
thereby, the Company has not entered into any agreement under which the Company
is, or pursuant to which the Company reasonably could be, restricted from
selling, licensing or otherwise distributing any of its technology or products
to or providing services to, customers or potential customers or any class of
customers, in any geographic area, during any period of time or in any segment
of the market.
Section 4.12 Title of Properties; Absence of Liens and Encumbrances;
Condition of Equipment.
(a) The Company does not own any real property nor has it ever
owned any real property. Schedule 4.12(a) sets forth a list of all real property
currently leased by the Company. All such current leases are in full force and
effect, are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing material default or event
of default (or event which with notice or lapse of time, or both, would
constitute a material default) by the Company that would materially affect the
Company's business.
(b) The Company has good and valid title to, or, in the case
of leased properties and assets, valid leasehold interests in, all of its
tangible personal properties and assets, used or held for use in its Team Sports
business, free and clear of any Liens, except as reflected on Schedule 4.12(b)
and except for Permitted Liens and for such imperfections of title and
encumbrances, if any, which are not material in character, amount or extent, and
which do not materially detract from the value or interfere with the present use
of the property subject thereto or affected thereby. "Permitted Liens" means (i)
Liens for Taxes or governmental assessments, charges or claims the payment of
which is not yet due, or for Taxes the validity of which is being contested in
good faith by appropriate proceedings; (ii) statutory Liens of landlords and
Liens of carriers, warehousemen, mechanics, materialmen and other similar
persons and other Liens imposed by applicable law incurred in the ordinary
course of business for sums not yet delinquent or being contested in good faith;
(iii) Liens relating to deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security or to secure the performance of leases, trade contracts or other
similar arrangements; (iv) Liens reflected or reserved for on the Current
Balance Sheet; and (v) Liens securing executory obligations under any lease that
constitutes an "operating lease" under generally accepted accounting principles.
(c) Schedule 4.12(c) lists all material items of equipment
with a net book value in excess of $50,000 (the "Equipment") owned or leased by
the Company and such Equipment is (i) adequate for the conduct of the Company's
business as currently conducted, and (ii) in good operating condition, regularly
and properly maintained, subject to normal wear and tear.
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(d) Except as indicated on Schedule 4.12(d), the Company has
not sold or otherwise released for distribution any of the Company's customer
files and other customer information relating to the Company's current and
former customers (the "Customer Information") other than to Brendan. No person
other than the Company or Brendan possesses any claims or rights with respect to
use of the Customer Information.
Section 4.13 Intellectual Property. For the purposes of this Agreement,
the following terms have the following definitions:
(i) "Intellectual Property" shall mean any or all of
the following and all rights in, arising out of, or associated therewith: (i)
all United States and foreign patents and applications therefor and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefor and all other rights corresponding thereto throughout
the world; (iv) all mask works, mask work registrations and applications
therefor; (v) all industrial designs and any registrations and applications
therefor throughout the world; (vi) all trade names, logos, common law
trademarks and service marks; trademark and service ▇▇▇▇ registrations and
applications therefor and all goodwill associated therewith throughout the
world; (vii) all databases and data collections and all rights therein
throughout the world; (viii) all computer software including all source code,
object code, firmware, development tools, test suites, files, records and data,
all media on which any of the foregoing is recorded, all Web addresses, sites
and domain names; (ix) any similar, corresponding or equivalent rights to any of
the foregoing; and (x) all documentation related to any of the foregoing
irrespective of the media on which it is recorded.
(ii) "Company Intellectual Property" shall mean any
Intellectual Property that is owned by or exclusively licensed to the Company as
of the date hereof.
(iii) "Registered Intellectual Property" shall mean
all United States, international and foreign: (i) patents, patent applications
(including provisional applications); (ii) registered trademarks, applications
to register trademarks, intent-to-use applications, or other registrations or
applications related to trademarks; (iii) registered copyrights and applications
for copyright registration; (iv) any mask work registrations and applications to
register mask works; and (v) any other Company Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued by, filed with, or recorded by, any state, government or other public
legal authority.
(b) Schedule 4.13(b) lists all Registered Intellectual
Property owned by, or filed in the name of, the Company (the "Company Registered
Intellectual Property") and lists any commencement or notice or, to the
knowledge of the Company, threat of 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 Company Registered
Intellectual Property.
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(c) Each item of Company Intellectual Property, including all
Company Registered Intellectual Property that is owned by the Company is free
and clear of any Liens other than Permitted Liens or as otherwise set forth on
Schedule 4.13(c). Other than as set forth on Schedule 4.13(c), the Company (i)
is the exclusive owner of all trademarks and trade names used in connection with
the operation or conduct of the Company's business, including the sale of any
products or technology or the provision of any services by the Company, and (ii)
owns exclusively, and has good title to, all copyrighted works that the Company
purports to own.
(d) To the extent that any Company Intellectual Property
(other than "shrink-wrap" and similar widely available commercial end-user
licenses) has been developed or created by any person other than the Company for
which the Company has paid, the Company has a written agreement with such person
with respect thereto, and thereby has obtained ownership of, and is the
exclusive owner or licensee of, all such Company Intellectual Property by
operation of law or by valid assignment.
(e) The Company has not transferred ownership of or, except
pursuant to the contracts, licenses and agreements listed in Schedule 4.13(g) or
standard customer license or similar agreements entered into in the ordinary
course of business consistent with past practice, granted any license of or
right to use or authorized the retention of any rights to use any Intellectual
Property that is or was Company Intellectual Property, to any other person.
(f) The Company Intellectual Property (together with
"shrink-wrap" and similar widely available commercial end-user licenses)
constitutes all the Intellectual Property used in and/or necessary to the
conduct of the Company's business as it currently is conducted, including,
without limitation, the design, development, manufacture, use, import and sale
of the products, technology and services of the Company (including products,
technology or services currently under development).
(g) Other than "shrink-wrap" and similar widely available
commercial end-user licenses, the contracts, licenses and agreements listed in
Schedule 4.13(g) include all material contracts, licenses and agreements to
which the Company is a party with respect to any Intellectual Property. Except
as set forth in Schedule 4.13(g), no person who has licensed Company
Intellectual Property to the Company has ownership rights or license rights to
improvements made by the Company in such licensed Intellectual Property.
(h) To the knowledge of the Company, the operation of the
business of the Company as it currently is 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 development) of the Company does not infringe or misappropriate
the Intellectual Property 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 the Company has not
received any notice or threat in writing thereof from any person claiming that
such operation or any act, product, technology or service (including products,
technology or services currently under development) of the Company infringes or
misappropriates the Intellectual Property of any person or constitutes unfair
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competition or trade practices under the laws of any jurisdiction (nor is the
Company aware of any reasonable basis therefor).
(i) Except as set forth on Schedule 4.13(i), each item of
Company Registered Intellectual Property is valid and subsisting, all necessary
registration, maintenance and renewal fees in connection with such Company
Registered Intellectual Property have been paid and all necessary documents and
certificates in connection with such Company 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 Company Registered Intellectual Property.
Except as set forth on Schedule 4.13(i), in each case in which the Company has
purchased any Intellectual Property rights from any person (other than
"shrink-wrap" and similar widely available commercial end-user licenses), the
Company has obtained a valid and enforceable assignment sufficient to
irrevocably transfer all rights in such Intellectual Property (including the
right to seek past and future damages with respect to such Intellectual
Property) to the Company and, to the maximum extent provided for by, and in
accordance with, applicable laws and regulations, the Company, 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.
(j) Except as set forth on Schedule 4.13(j), there are no
contracts, licenses or agreements between the Company and any other person with
respect to Company Intellectual Property under which there is any dispute known
to the Company regarding the scope of such agreement, or performance under such
agreement including with respect to any payments to be made or received by the
Company thereunder.
(k) Except as set forth on Schedule 4.13(k), to the knowledge
of the Company, no person is infringing or misappropriating any Company
Intellectual Property.
(l) Except as otherwise set forth in Schedule 4.13(l), the
Company has taken all reasonable steps that are required to protect the
Company's rights in confidential information and trade secrets of the Company or
provided by any other person to the Company. Without limiting the foregoing, all
current and former employees, consultants and contractors of the Company who
have access to or have been provided access to confidential information of the
Company, other than the Company's outside accountants, attorneys and the like,
have executed a proprietary information, confidentiality and assignment
agreement substantially in the Company's standard form.
(m) No Company Intellectual Property or product, technology or
service of the Company is subject to any proceeding or outstanding decree,
order, judgment, agreement or stipulation issued by a Governmental Entity that
restricts in any manner the use, transfer or licensing thereof by the Company or
may affect the validity, use or enforceability of such Company Intellectual
Property.
Section 4.14 Agreements, Contracts and Commitments. Except as set forth
on Schedule 4.14(a), the Company is not a party to and is not bound by:
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(i) any employment or consulting agreement, contract
or commitment with an employee or individual consultant or salesperson or
consulting or sales agreement, contract or commitment with a firm or other
organization that is not terminable without penalty by the Company upon no more
than 90 days' prior notice;
(ii) any fidelity or surety bond or completion bond;
(iii) any lease of personal property having a value
in excess of $100,000 individually or $250,000 in the aggregate;
(iv) any agreement, contract or commitment relating
to capital expenditures and involving future payments in excess of $100,000 per
annum in the aggregate;
(v) any agreement, contract or commitment relating to
the leasing, licensing, disposition or acquisition of assets or any interest in
any business enterprise outside the ordinary course of the Company's business;
(vi) any mortgages, indentures, loans or credit
agreements, security agreements or other agreements or instruments relating to
the borrowing of money or extension of credit other than accounts receivable
incurred in the ordinary course of business;
(vii) any purchase order or contract for the purchase
of materials involving in excess of $100,000;
(viii) any dealer, distribution, joint marketing or
development agreement;
(ix) any sales representative, original equipment
manufacturer, value added, remarketer or other agreement for distribution of the
Company's products or services or the products or services of any person; or
(x) any other agreement, contract or commitment that
involves $100,000 or more or is not cancelable without penalty within thirty
(30) days.
(b) Except as set forth on Schedule 4.14(b), the Company is in
compliance in all material respects with and has not breached, violated or
defaulted under, in each case in any material respect, or received notice that
it has breached, violated or defaulted under, any of the terms or conditions of
any agreement, contract, covenant, instrument, lease, license or commitment
listed in Schedule 4.14(a) to which the Company, is a party or by which the
Company is bound (each, a "Contract"). Except as set forth on Schedule 4.14(b),
each Contract is in full force and effect and, to the knowledge of the Company,
is not subject to any material default thereunder by any party obligated to the
Company pursuant thereto. Except as set forth on Schedule 4.14(b), the Company
has obtained all necessary consents, waivers and approvals of parties to any
Contract as are required thereunder in connection with the transactions
contemplated hereby, in order for such Contracts to remain in effect without
modification after the date hereof. The Contracts under which any such consents,
waivers or approvals have been
-18-
obtained are listed in Schedule 4.14(b). Except as set forth on Schedule
4.14(b), following the date hereof, the Company will be permitted to exercise
all of its rights under the Contracts without the payment of any additional
amounts or consideration other than ongoing fees, royalties or payments which
the Company would otherwise be required to pay had the transactions contemplated
by this Agreement not occurred.
Section 4.15 Interested Party Transactions. To the knowledge of the
Company, no officer or director of the Company, nor any of the Stockholders (nor
any sibling, descendant or spouse of any of such persons, or any trust,
partnership or corporation in which any of such persons has or has had an
interest), has or has had, directly or indirectly, (i) a material interest in
any entity which furnished or sold, or furnishes or sells, services, products or
technology which is furnished or sold by the Company, or (ii) a material
interest in any entity that purchases from or sells or furnishes to the Company,
any goods or services or (iii) a material interest in any Contract; 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 Schedule 4.15.
Section 4.16 Litigation. Other than as set forth on Schedule 4.16,
there is no action, suit or proceeding of any nature pending, or, to the
knowledge of the Company, threatened, before any court or administrative agency
against the Company or its properties or any of the officers or directors of the
Company in such capacities. There is no investigation pending or, to the
knowledge of the Company, threatened, against the Company or its properties, or
any of the officers or directors of the Company in their capacities as such by
or before any Governmental Entity. No Governmental Entity has at any time
challenged or questioned the legal right of the Company to conduct its
operations as presently or previously conducted.
Section 4.17 Brokers' and Finders' Fees. Neither the Company nor the
Stockholders, has incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with the Agreement or any of the transactions contemplated
hereby.
Section 4.18 Employee Benefit Matters.
(a) Definitions. With the exception of the definition of
"Affiliate" set forth in Section 4.18(a)(i) below (which definition shall apply
only to this Section 4.18), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "Affiliate" shall mean any other person or entity
which is under common control with the Company within the meaning of Section
414(b), (c), (m) or (o) of the Code and the regulations issued thereunder;
(ii) "Code" shall mean the Internal Revenue Code of
1986, as amended;
(iii) "Company Employee Plan" shall mean any plan,
program, policy or practice, providing severance, termination pay, deferred
compensation, performance awards,
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stock or stock-related awards, fringe benefits or other employee benefits,
whether funded or unfunded, including without limitation, each "employee benefit
plan," within the meaning of Section 3(3) of ERISA which is maintained,
contributed to, or required to be contributed to, by the Company or any
Affiliate for the benefit of any Employee, or with respect to which the Company
or any Affiliate has or may have any liability or obligation;
(iv) "COBRA" shall mean the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended;
(v) "DOL" shall mean the Department of Labor;
(vi) "Employee" shall mean any current or former
employee, consultant or director of the Company or any Affiliate;
(vii) "Employee Agreement" shall mean each
management, employment, severance, consulting, relocation, repatriation,
expatriation or other agreement, contract or understanding in effect between the
Company or any Affiliate and any Employee;
(viii) "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended;
(ix) "FMLA" shall mean the Family Medical Leave Act
of 1993, as amended;
(x) "IRS" shall mean the Internal Revenue Service;
(xi) "Multiemployer Plan" shall mean any "Pension
Plan" (as defined below) which is a "multiemployer plan," as defined in Section
3(37) of ERISA;
(xii) "PBGC" shall mean the Pension Benefit Guaranty
Corporation; and
(xiii) "Pension Plan" shall mean each Company
Employee Plan which is an "employee pension benefit plan," within the meaning of
Section 3(2) of ERISA.
(b) Schedule. Schedule 4.18(b) contains an accurate and
complete list of each Company Employee Plan and each Employee Agreement. The
Company does not have any commitment to establish any new Company Employee Plan
or Employee Agreement, to modify any Company Employee Plan or Employee Agreement
(except to the extent required by law or to conform any such Company Employee
Plan or Employee Agreement to the requirements of any applicable law, or as
required by this Agreement), or to adopt or enter into any Company Employee Plan
or Employee Agreement.
(c) Documents. The Company has provided to the Buyer: (i)
correct and complete copies of all documents embodying each Company Employee
Plan and each Employee Agreement including (without limitation) all amendments
thereto and all related trust documents;
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(ii) the most recent annual actuarial valuations, if any, prepared for each
Company Employee Plan; (iii) the three most recent annual reports (Form Series
5500 and all schedules and financial statements attached thereto), if any,
required under ERISA or the Code in connection with each Company Employee Plan;
(iv) if Company Employee Plan is funded, the most recent periodic accounting of
Company Employee Plan assets; (v) the most recent summary plan description
together with the summary(ies) of material modifications thereto, if any,
required under ERISA with respect to each Company Employee Plan; (vi) all IRS
determination, opinion, notification and advisory letters; (vii) all material
written agreements and contracts relating to each Company Employee Plan,
including, but not limited to, administrative service agreements, group annuity
contracts and group insurance contracts; (viii) all written communications
material to any Employee or Employees relating to any Employee Plan and any
proposed Company Employee Plans, in each case, relating to any amendments,
terminations, any establishments not reflected in formal plan documents,
increases or decreases in benefits, acceleration of payments or vesting
schedules or other events which would result in any material liability to the
Company; (ix) all correspondence to or from any governmental agency relating to
any Company Employee Plan; (x) all current COBRA forms and related notices (or
such forms and notices as required under comparable law); and (xi) all policies
pertaining to fiduciary liability insurance covering the fiduciaries for each
Company Employee Plan.
(d) Employee Plan Compliance. Except as set forth in Schedule
4.18(d), (i) the Company has performed in all material respects all obligations
required to be performed by it under, is not in default or violation in any
material respects of, and has no knowledge of any material default or violation
by any other party to each Company Employee Plan, and each Company Employee Plan
has been established and maintained in all material respects in accordance with
its terms and in compliance with all applicable laws, statutes, orders, rules
and regulations, including but not limited to ERISA or the Code; (ii) each
Company Employee Plan intended to qualify under Section 401(a) of the Code and
each trust intended to qualify under Section 501(a) of the Code has either
received a favorable determination, opinion, notification or advisory letter
from the IRS with respect to each such Plan as to its qualified status under the
Code, or has remaining a period of time under applicable Treasury regulations or
IRS pronouncements in which to apply for such a letter and make any amendments
necessary to obtain a favorable determination as to the qualified status of each
such Company Employee Plan; (iii) to the knowledge of the Company, no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under Section 4975 or
Section 408 of ERISA (or any administrative class exemption issued thereunder),
has occurred with respect to any Company Employee Plan; (iv) there are no
actions, suits or claims pending, or, to the knowledge of the Company,
threatened (other than routine claims for benefits) against any Company Employee
Plan or against the assets of any Company Employee Plan; (v) there are no audits
or proceedings pending or, to the knowledge of the Company, threatened by the
IRS or DOL with respect to any Company Employee Plan; and (vi) neither the
Company nor any Affiliate is subject to any penalty or tax with respect to any
Company Employee Plan under Section 502(i) of ERISA or Sections 4975 through
4980 of the Code.
-21-
(e) Pension Plan. Neither the Company nor any Affiliate has
ever maintained, established, sponsored, participated in, or contributed to, any
Pension Plan that is subject to Title IV of ERISA or Section 412 of the Code.
(f) Multiemployer and Multiple Employer Plans. At no time has
the Company or any Affiliate contributed to or been obligated to contribute to
any Multiemployer Plan. Neither the Company, nor any Affiliate has at any time
ever maintained, established, sponsored, participated in, or contributed to any
multiple employer plan, as described in Section 413(c) of the Code.
(g) No Post-Employment Obligations. Except as set forth in
Schedule 4.18(g), no Company Employee Plan provides, or reflects or represents
any liability to provide retiree health to any person for any reason, except as
may be required by COBRA or other applicable statute, and the Company has never
represented, promised or contracted, in writing, to any Employee (either
individually or to Employees as a group) or any other person that such
Employee(s) or other person would be provided with retiree health, except to the
extent required by statute.
(h) Health Care Compliance. Neither the Company nor any
Affiliate has, prior to the date hereof and in any material respect, violated
any of the health care continuation requirements of COBRA, the requirements of
FMLA, the requirements of the Health Insurance Portability and Accountability
Act of 1996, the requirements of the Women's Health and Cancer Rights Act, the
requirements of the Newborns' and Mothers' Health Protection Act of 1996, or any
amendment to each such Act, or any similar provisions of state law applicable to
its Employees.
(i) Effect of Transaction. Except as set forth in Schedule
4.18(i), the execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Company
Employee Plan or Employee Agreement that will or may result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.
(j) Employment Matters. The Company: (i) is in compliance in
all material respects with all applicable foreign, federal, state and local
laws, rules and regulations respecting employment eligibility, employment,
employment practices, terms and conditions of employment and wages and hours, in
each case, with respect to Employees; (ii) has withheld and reported all amounts
required by law or by agreement to be withheld and reported with respect to
wages, salaries and other payments to Employees; (iii) is not liable for any
arrears of wages or any taxes or any penalty for failure to comply with any of
the foregoing; and (iv) is not liable for any payment to any trust or other fund
governed by or maintained by or on behalf of any governmental authority, with
respect to unemployment compensation benefits, social security or other benefits
or obligations for Employees (other than routine payments to be made in the
normal course of business and consistent with past practice). There are no
pending or threatened
-22-
claims or actions against the Company under any worker's compensation policy or
long-term disability policy.
(k) Labor. No work stoppage or labor strike against the
Company is pending or threatened. The Company has no knowledge of any activities
or proceedings of any labor union to organize any Employees. Except as set forth
in Schedule 4.18(k), there are no actions, suits, claims, labor disputes or
grievances pending, or, to the knowledge of the Company, threatened relating to
any labor, safety or discrimination matters involving any employee, including,
without limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in the
aggregate, result in any material liability to the Company. The Company has not
engaged in any unfair labor practices within the meaning of the National Labor
Relations Act. Except as set forth in Schedule 4.18(k), the Company is not
presently, nor has the Company been in the past, a party to, or bound by, any
collective bargaining agreement or union contract with respect to Employees and
no collective bargaining agreement is being negotiated by the Company.
Section 4.19 Insolvency. No insolvency proceedings of any character,
including bankruptcy, receivership, reorganization, composition or arrangement
with creditors, voluntary or involuntary are pending or, to the knowledge of the
Company, are threatened against the Company, and the Company has not made any
assignment for the benefit of creditors.
Section 4.20 Insurance. Schedule 4.20 lists all insurance policies and
fidelity bonds covering the assets, business, equipment, properties, operations,
employees, officers and directors of the Company. There is no claim by the
Company pending under any of such policies or bonds as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds. All premiums due and payable under all such policies and bonds have been
paid, and the Company is otherwise in material compliance with the terms of such
policies and bonds. The Company has not received verbal or written notice of any
threatened termination of, or premium increase outside the ordinary course with
respect to, any of such policies.
Section 4.21 Compliance with Laws. The Company has complied in all
material respects with, is not in violation in any material respect of, and has
not received any notices of violation with respect to, any foreign, federal,
state or local statute, law or regulation.
Section 4.22 Environmental Matters.
(a) Hazardous Material. The Company has not (i) operated any
underground storage tanks at any property that the Company has at any time
owned, operated, occupied or leased except in material compliance with
applicable law or (ii) illegally released any substance that has been designated
by any Governmental Entity or by applicable federal, state, local, or foreign
law to be radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including, without limitation, PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous substances pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, (a "Hazardous Material").
-23-
(b) Hazardous Materials Activities. The Company has not
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in material violation of any law, nor
has the Company disposed of, transported, sold, or manufactured any product
containing a Hazardous Material (any or all of the foregoing being collectively
referred to as "Hazardous Materials Activities") in material violation of any
rule, regulation, treaty or statute promulgated by any Governmental Entity to
prohibit, regulate, or control Hazardous Materials or any Hazardous Material
Activity.
(c) Permits. The Company currently holds all material
environmental approvals, permits, licenses, clearances, and consents (the
"Environmental Permits") necessary for the conduct of Hazardous Material
Activities and other businesses conducted by the Company as such activities and
businesses are currently being conducted.
(d) Environmental Liabilities. No action, proceeding,
revocation proceeding, amendment procedure, writ, injunction or claim is
pending, or to the knowledge, of the Company or the Stockholders, threatened
concerning any Environmental Permit, Hazardous Material or any Hazardous
Materials Activity of the Company.
Section 4.23 Warranties; Indemnities. Except for the warranties and
indemnities contained in those contracts and agreements set forth in Schedule
4.23 or in any other schedule to this Agreement, (ii) contained in contracts and
agreements entered into in the ordinary course of business, (iii) contained in
this Agreement or any other agreement entered into pursuant to the terms of this
Agreement, (iv) which, if the Company were required to perform or were to result
in liability to the Company, are not likely to cause a Material Adverse Effect,
or (v) statutory implied warranties, the Company has not given any warranties or
indemnities relating to products or technology sold or services rendered by the
Company.
Section 4.24 Representations Complete. None of the representations or
warranties made by the Company, nor any statement made in any Schedule or
certificate furnished by the Company pursuant to this Agreement contains any
untrue statement of a material fact or to their knowledge omits 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.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders severally represents and warrants to the Buyer
as follows:
Section 5.1 Ownership of Company Shares. Such Stockholder is the sole
record and beneficial owner of the Company Shares listed as being owned by such
Stockholder opposite such Stockholder's name on Schedule 1, and such Company
Shares are to be exchanged pursuant to this Agreement. Such Company Shares are
not subject to any Liens or to any rights of first refusal of any kind other
than restrictions on transfer by the securities laws or as set forth on Schedule
5.1, and such Stockholder has not granted any rights to purchase the Company
Shares
-24-
to any other person or entity. Such Stockholder has the sole right to transfer
such Company Shares to the Buyer. Such Company Shares constitute all of the
capital stock of the Company owned, beneficially or of record, by such
Stockholder, and such Stockholder has no options, warrants or other rights to
acquire common stock of the Company, except as set forth on Schedule 5.1. At the
Closing, the Buyer will receive good title to such Company Shares, subject to no
Liens retained, granted or permitted by such Stockholder or the Company.
Section 5.2 Purchaser Questionnaire. Such Stockholder has completed,
executed and delivered to the Company and the Buyer a Purchaser Questionnaire
and hereby represents and warrants that the information contained therein is
true, accurate and complete as of the Closing Date.
Section 5.3 Tax Matters. Such Stockholder has had an opportunity to
review with his or its own tax advisors the tax consequences to such Stockholder
of the transactions contemplated by this Agreement. Such Stockholder understands
that it must rely solely on his or its advisors and not on any statements or
representations by the Buyer, the Company, Brendan or any of their respective
agents. Such Stockholder understands that he or it (and not the Buyer, the
Company or Brendan) shall be responsible for his or its own tax liability that
may arise as a result of the transactions contemplated by this Agreement.
Section 5.4 Absence of Claims by Stockholders. Other than as set forth
on Schedule 5.4, such Stockholder does not have any claim against the Company,
contingent or unconditional, fixed or variable under any contract or on any
other basis whatsoever, whether in equity or at law (other than for accrued
compensation and other employee benefits and other than with respect to any
rights to indemnification that such Stockholder may now or hereafter be entitled
to under the Company's Certificate of Incorporation or Bylaws).
Section 5.5 Authority. Such Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by such
Stockholder, and, assuming the due authorization, execution and delivery by the
other parties hereto, constitute a valid and binding obligation of such
Stockholder, enforceable in accordance with its terms subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to creditors' rights generally and (ii) the availability of injunctive
relief and other equitable remedies.
Section 5.6 No Conflict. The execution and delivery by such Stockholder
of this Agreement does not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with (i) any mortgage,
indenture, lease, contract or other agreement or instrument, permit, concession,
franchise or license to which such Stockholder or any of his or its properties
or assets is subject, or (ii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to such Stockholder or his or its
properties or assets.
-25-
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER
In order to induce the Company, the Stockholders and Brendan to enter
into this Agreement, the Buyer hereby represents to the Company, the
Stockholders and Brendan as follows:
Section 6.1 Organization, Standing and Power. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the state of California. The Buyer has the corporate power to own its
properties and to carry on its business as now being conducted and is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the failure to be so qualified or licensed would have a
material adverse effect on the Buyer or on its ability to consummate the
transactions contemplated hereby.
Section 6.2 Authority. The Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Buyer and no
further action is required to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Buyer and constitutes a legal, valid and binding obligation of the Buyer,
enforceable in accordance with its terms subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
creditors' rights generally and (ii) the availability of injunctive relief and
other equitable remedies.
Section 6.3 No Conflict. The execution and delivery by the Buyer of
this Agreement and the consummation of the transactions contemplated hereby will
not conflict with or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation, modification or acceleration of any obligation or
loss of any benefit under (i) any provision of the Certificate of Incorporation
or the Bylaws of the Buyer, (ii) any mortgage, indenture, lease, contract or
other agreement or instrument, permit, concession, franchise or license to which
the Buyer or its properties or assets is subject, or (iii) any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Buyer or
its properties or assets, except, with respect to clause (ii) as are not
reasonably likely to have a material adverse effect on the properties, assets,
financial condition, business, results of operation or prospects of the Buyer or
that would materially impair the ability of the Buyer to perform its obligations
hereunder.
Section 6.4 Consents. Other than such filings as may be required under
HSR Act and the expiration or early termination of the waiting period thereunder
and compliance with and filings under the Securities Act of 1933, as amended
(the "Securities Act") and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), no consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or any third
party, including a party to any agreement with the Buyer is required by or with
respect to the Buyer in connection with the execution and delivery of the
Agreement or the consummation of the transactions contemplated hereby.
-26-
Section 6.5 Buyer's Shares. The Buyer's Shares to be issued pursuant to
this Agreement will, when issued and delivered in accordance with this
Agreement, be duly authorized, validly issued, fully paid, and non-assessable
and free from any preemptive right created by statute, the Buyer's Certificate
of Incorporation, or the Buyer's Bylaws or pursuant to any agreement; provided,
however, that the Buyer's Shares to be issued hereunder will be subject to
restrictions on transfer under applicable federal and state securities laws.
Section 6.6 Capital Structure. The authorized capital stock of Buyer
consists of (i) 120,000,000 shares of common stock, no par value, and (ii)
5,000,000 shares of preferred stock, no par value per share, 25,000 of which
have been designated as Series A Participating Preferred Stock. On March 31,
2000, 49,658,000 shares of Buyer Common Stock were issued and outstanding, and
(ii) no shares of Series A Participating Preferred Stock were issued or
outstanding.
Section 6.7 SEC Documents; Buyer Financial Statements. The Buyer has
filed all forms, reports, and documents required to be filed by it with the
Securities and Exchange Commission (the "SEC") and has furnished or made
available to the Company and the Stockholders true and complete copies of its
Annual Report on Form 10-K for the fiscal year ended June 30, 1999 and its
Quarterly Reports on Form 10-Q for the quarters ended September 30, 1999,
December 31, 1999 and March 31, 2000 (collectively, the "SEC Documents"), which
the Buyer has filed with the SEC under the Exchange Act. As of their respective
filing dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances in which they were made, not misleading, except to the
extent corrected by a publicly available document subsequently filed with the
SEC. The consolidated financial statements of Buyer, including the notes
thereto, included in the SEC Documents (the "Buyer Financial Statements") comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied (except as may be indicated in the notes thereto
or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC),
and fairly present the consolidated financial position of the Buyer and the
results of its operations and cash flows as of the respective dates and for the
periods indicated therein (subject, in the case of unaudited statements, to
normal audit adjustments). There has been no change in the Buyer's accounting
policies except as described in the notes to the Buyer Financial Statements.
Section 6.8 No Material Adverse Change. Since March 31, 2000 the Buyer
has conducted its business in the ordinary course of business, and there has not
occurred any event, occurrence, or condition that would result in a material
adverse effect on the Buyer; provided, however, that none of the following shall
be deemed, either alone or in combination, to constitute a material adverse
effect on Buyer: (i) a change that results from conditions affecting the digital
video editing industry generally, (ii) a change that results from conditions
affecting the U.S. or
-27-
the world economy generally, or (iii) a decline in the Buyer's Common Stock
price as quoted on Nasdaq.
Section 6.9 Eligibility to Use Form S-3. The Buyer represents that it
is eligible to use Form S-3 under the Securities Act to effect the registration
of the Buyer's Shares pursuant to the terms of Article XIV hereof.
Section 6.10 Representations Complete. None of the representations or
warranties made by the Buyer in the Agreement, nor any statement made in any
Schedule or certificate furnished by the Buyer pursuant to this Agreement
contains any untrue statement of a material fact or to its knowledge omits 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.
Section 6.11 Brokers' and Finders' Fees. Buyer has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
ARTICLE VII
THE BUYER'S SHARES
Section 7.1 Securities Act Exemption. The issuance of the Buyer's
Shares pursuant to this Agreement will not be registered under the Securities
Act in reliance on the exemptions from the registration requirements of Section
5 of the Securities Act set forth in Section 4(2) thereof.
Section 7.2 Legends. In addition to any legend imposed by applicable
state securities laws or by any contract which continues in effect after the
date hereof, the certificates representing the Buyer's Shares issued pursuant to
this Agreement shall bear restrictive legends (and stop transfer orders shall be
placed against the transfer thereof with Buyer's transfer agent), stating
substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH RULE 144
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO, OR AN OPINION OF COUNSEL, SATISFACTORY TO
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
ACT, OR A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION.
-28-
Section 7.3 Representations Regarding Securities Law Matters. Each of
the Stockholders shall be bound by the following provisions:
(a) Such Stockholder will not offer, sell, or otherwise
dispose of any of the Buyer's Shares except in compliance with the Securities
Act and the rules and regulations thereunder.
(b) Such Stockholder will not sell, transfer or otherwise
dispose of any of the Buyer's Shares unless (i) such sale, transfer or other
disposition is within the limitations of and in compliance with Rule 144
promulgated by the SEC under the Securities Act and such Stockholder furnishes
the Buyer with reasonable proof of compliance with such Rule, (ii) in the
opinion of counsel, reasonably satisfactory to the Buyer and its counsel, some
other exemption from registration under the Securities Act is available with
respect to any such proposed sale, transfer, or other disposition of the Buyer's
Shares, or (iii) the offer and sale of the Buyer's Shares is registered under
the Securities Act.
ARTICLE VIII
COVENANTS OF THE COMPANY
In order to induce the Buyer to enter into this Agreement, the Company
hereby covenants and agrees as follows:
Section 8.1 Interim Conduct of Business. From the date hereof until the
Closing, the Company shall operate its business only on a basis consistent with
prior practice and only in the ordinary course of business, without change in
the nature of such business from that conducted prior to the date hereof except
as otherwise contemplated by this Agreement or the transactions contemplated
hereby. Without limiting the generality of the foregoing, from the date hereof
until the Closing, except for transactions contemplated by this Agreement,
listed in Schedule 8.1 hereto, or expressly approved in writing by Buyer, the
Company shall not:
(i) enter into or amend any employment, bonus,
severance or retirement contract or arrangement, nor increase any salary or
other form of compensation payable or to become payable to any executives or
employees, other than in the ordinary course of business and consistent with
prior practice;
(ii) make any purchase, sale or disposition of any
asset or property other than purchases, sales or dispositions in the ordinary
course of business;
(iii) subject to a Lien, other than a Permitted Lien,
any of its properties or assets other than in the ordinary course of business or
pursuant to existing obligations of the Company;
-29-
(iv) incur any contingent liability as a guarantor or
otherwise with respect to the obligations of others, or incur any other
contingent or fixed obligations or liabilities except those that are usual and
normal in the ordinary course of business;
(v) merge or consolidate with or agree to merge or
consolidate with, or purchase or agree to purchase all or substantially all of
the assets of, nor otherwise acquire any corporation, partnership, or other
business organization;
(vi) authorize for issuance, issue, sell or deliver
any additional shares of the capital stock or any securities or obligations
convertible into shares of the capital stock, or issue or grant any option,
warrant or other right to purchase any shares of capital stock other than (a)
the issuance of capital stock or options, warrants or other rights to purchase
any shares of capital stock of the Company upon the exercise, termination,
exchange or cancellation of any outstanding options or warrants of the Company,
or (b) the issuance of Common Stock of the Company upon conversion of
convertible securities of the Company;
(vii) split, combine or reclassify any shares of
capital stock of any class or redeem or otherwise acquire, directly or
indirectly any shares of capital stock, other than repurchases by the Company at
cost of any unvested shares of capital stock of the Company upon the termination
of services of any employee, director or consultant;
(viii) make any change or incur any obligation to
make a change in its Certificate of Incorporation or By-laws, as amended and in
effect as of the date hereof;
(ix) fail to use commercially reasonable efforts to
keep intact the Company's business organization, to keep available the Company's
present employees or to preserve the goodwill of all suppliers, customers and
others having business relations with the Company;
(x) fail to have in effect and maintain at all times
all insurance of the kind, in the amount and with the insurers set forth in
Schedule 4.20 annexed hereto or equivalent insurance with any substitute
insurers reasonably approved by the Buyer; or
(xi) enter into any agreement or understanding that
would prohibit, restrict or interfere with the transactions contemplated hereby.
Section 8.2 Access. Following the date hereof and until the Closing
(the "Due Diligence Period") the Company shall give the Buyer and its
representatives, accountants, counsel, agents and employees and the
representatives of its lenders ("Representatives") full and free access to all
of its properties, books, contracts, commitments, records and financial
statements (the "Due Diligence Materials") during reasonable business hours and
upon reasonable notice and shall furnish the Buyer and its Representatives with
all financial and operating data and other information as to the operation,
finances, assets and conduct of the business conducted by the Company as the
Buyer or its Representatives may from time to time reasonably request. The Buyer
and its Representatives will be permitted to make extracts from and copies of
all such data and information. Any information furnished to the Buyer or its
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Representatives pursuant to this Section 8.2 shall not affect Buyer's right to
rely on any representations and warranties made in this Agreement or in
connection herewith or pursuant hereto. The provisions of this Section 8.2 are
subject to the provisions of, and the compliance by the Buyer with its
obligations under, that certain Mutual Nondisclosure Agreement between the Buyer
and the Company, dated as of June 15, 2000.
Section 8.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filings. In connection with the
transactions contemplated by this Agreement, the Company has previously made
certain filings as required under the HSR Act. The Company shall furnish to the
Buyer such information and commercially reasonable assistance as the Buyer may
reasonably request in connection with its preparation of any additional
necessary filings or submissions to any governmental agency, including, without
limitation, any additional filings necessary under the HSR Act. The Company
shall keep the Buyer informed of the status of any inquiries made of the Company
by the Federal Trade Commission, the Antitrust Division of the U. S. Department
of Justice or any other governmental agency or authority or members of their
respective staffs with respect to this Agreement or the transactions
contemplated hereby.
Section 8.4 Authorization from Others. Prior to the Closing, the
Company shall use its good faith commercially reasonable efforts to obtain, all
authorizations, consents and permits of others required to permit the
consummation of the transactions contemplated by this Agreement.
Section 8.5 Consummation of Agreement. The Company shall use its good
faith commercially reasonable efforts to perform and fulfill all conditions and
obligations on its part to be performed and fulfilled under this Agreement, to
the end that the transactions contemplated by this Agreement shall be fully
carried out. From the date hereof until the termination of this Agreement, the
Company shall not discuss or negotiate with any other party, or entertain or
consider any inquiries or proposals received from any other party, concerning
the possible disposition of the Company Shares, the Company's assets or the
Company's business.
Section 8.6 Spin-out and Termination of the 401(k) Plan. Prior to the
Closing, the Board of Directors of the Company will vote (i) to spin-out a
portion of the assets and liabilities of the Company's 401(k) Plan (the "Plan")
and the Company's Section 125 Cafeteria Plan related to the accounts of those
employees of Company who will be hired by Brendan subsequent to Closing to a
separate Internal Revenue Code Section 401(k) plan (the "Brendan Plan") and a
separate Section 125 Cafeteria Plan (the "Brendan Section 125 Plan"), and fully
vest all participants in the Plan and make elective matching contribution equal
to the aggregate forfeiture account balance, if any; and (ii) to terminate the
Plan effective the day prior to Closing as constituted after the spin-out. The
Buyer acknowledges and agrees that the taking of any of these actions in the
preceding sentence shall not constitute a breach of any representation or
covenant in this Agreement.
Section 8.7 Employee Matters. Brendan will extend offers of employment
to each employee listed on Schedule 8.7 hereto and will assume any severance or
other liability or obligation related to such employee's employment by the
Company payable from and after the
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Closing Date, including, without limitation, benefits and liabilities accruing
upon termination by the Company of such employee's employment.
Section 8.8 Supplemental Disclosures. From time to time before the
Closing, the Company shall be entitled to advise the Buyer in writing of any
matter that is necessary to correct any information in one or more schedules to
this Agreement that is or has become inaccurate. The fact that any supplemental
disclosure is made by the Company pursuant to this Section 8.8 shall in no way
diminish or in any way limit the Buyer's right to terminate this Agreement
pursuant to Article XII hereof prior to the Closing and to exercise any and all
of the rights and obtain any and all of the remedies that the Buyer shall
otherwise be entitled to exercise and obtain in connection with such termination
(including, without limitation, the right to commence legal proceedings against
the Company for breach of representation or warranty). If the Closing is
consummated, then for purposes of the indemnification provisions of this
Agreement, such supplemental disclosures pursuant to this Section 8.8 will be
deemed to have been made as of the date hereof, and no indemnification will be
payable or owed in respect thereof by reason of the fact that such disclosure
was not made on the date hereof.
ARTICLE VIIIA
COVENANTS OF THE STOCKHOLDERS
In order to induce the Buyer to enter into this Agreement, each
Stockholder hereby severally covenants and agrees as follows:
Section 8A.1 Authorization from Others. Prior to the Closing, such
Stockholder shall use his or its good faith commercially reasonable efforts to
obtain, all authorizations, consents and permits of others required to permit
the consummation by such Stockholder of the transactions contemplated by this
Agreement to be taken by such Stockholder.
Section 8A.2 Consummation of Agreement. Such Stockholder shall use his
or its good faith commercially reasonable efforts to perform and fulfill all
conditions and obligations on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement shall
be fully carried out. From the date hereof until the termination of this
Agreement, such Stockholder shall not discuss or negotiate with any other party,
or entertain or consider any inquiries or proposals received from any other
party, concerning the possible disposition of the Company Shares, the Company's
assets or the Company's business.
Section 8A.3 No Transfer or Encumbrance of Shares. Such Stockholder
will not at any time prior to the Closing assign, transfer, hypothecate or
otherwise encumber or create in favor of any other party any right or interest
in the Company Shares.
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ARTICLE IX
COVENANTS OF BUYER
In order to induce the Company, the Stockholders and Brendan to enter
into this Agreement, the Buyer hereby covenants and agrees as follows:
Section 9.1 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filings. In connection with the
transactions contemplated by this Agreement, the Buyer has previously made
certain filings as required under the HSR Act. The Buyer shall furnish to the
Company such information and commercially reasonable assistance as the Company
may reasonably request in connection with its preparation of any additional
necessary filings or submissions to any governmental agency, including, without
limitation, any additional filings necessary under the HSR Act. The Buyer shall
keep the Company informed of the status of any inquiries made of the Buyer by
the Federal Trade Commission, the Antitrust Division of the U. S. Department of
Justice or any other governmental agency or authority or members of their
respective staffs with respect to this Agreement or the transactions
contemplated hereby.
Section 9.2 Authorization from Others. Prior to the Closing, the Buyer
shall use good faith commercially reasonable efforts to obtain all
authorizations, consents, and permits of others required to permit the
consummation of the transactions contemplated by this Agreement.
Section 9.3 Consummation of Agreement. Buyer shall use best efforts to
perform and fulfill all conditions and obligations on its part to be performed
and fulfilled under this Agreement, to the end that the transactions
contemplated by this Agreement shall be fully carried out.
Section 9.4 Transition Services and Arbitration Cooperation. Following
the Closing, Buyer will provide Brendan with such transition services at Buyer's
cost as may be mutually agreed between the parties. Following the Closing,
Brendan will provide reasonable cooperation and assistance to the Company, at
the Company's cost, in connection with the pending arbitration proceeding
commenced against the Company by Knowledge, Inc., as may be mutually agreed
between the parties.
Section 9.5 401(k) Plan Matters. Following the Closing, no distribution
of Plan assets will occur, except with respect to employees who discontinue
employment with the Company, prior to the issuance by the Internal Revenue
Service of a determination letter that the distribution of assets from the
terminated Plan is in accordance with Internal Revenue Code Section 401(k)(10).
The Buyer or the Company shall file such determination letter request with the
Internal Revenue Service following the Closing. To the extent not reflected in
the transfer of assets pursuant to Section 1.1 hereof, the Company shall pay to
Brendan a sum in cash representing the total salary reduction contributions
under the Company Section 125 Plan and the Brendan Section 125 Plan, since
January 1, 2000 to the date the responsibility and liabilities for the Brendan
Section 125 Plan is transferred to Brendan, of employees of the Company prior to
the Closing Date hired by Brendan, less amounts paid out as benefits under the
Company Section 125 Plan and the Brendan Section 125 Plan for qualified
reimbursements in 2000 to such employees.
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Section 9.6 Supplemental Disclosures. From time to time before the
Closing, the Buyer shall be entitled to advise the Company in writing of any
matter that is necessary to correct any information in one or more schedules to
this Agreement that is or has become inaccurate. The fact that any supplemental
disclosure is made by the Buyer pursuant to this Section 9.6 shall in no way
diminish or in any way limit the right of the Company or Brendan to terminate
this Agreement pursuant to Article XII hereof prior to the Closing and to
exercise any and all of the rights and obtain any and all of the remedies that
the Company, Brendan or the Stockholders shall otherwise be entitled to exercise
and obtain in connection with such termination (including, without limitation,
the right to commence legal proceedings against the Buyer for breach of
representation or warranty). If the Closing is consummated, then for purposes of
the indemnification provisions of the Agreement, such supplemental disclosures
pursuant to this Section 9.6 will be deemed to have been made as of the date
hereof, and no indemnification will be payable or owed in respect thereof by
reason of the fact that such disclosures was not made on the date hereof.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER
Each and all of the obligations of the Buyer to consummate the
transactions contemplated by this Agreement are subject to fulfillment prior to
or at the Closing of the following conditions:
Section 10.1 Accuracy of Warranties; Performance of Covenants. The
representations and warranties of the Company and the Stockholders contained
herein shall be accurate in all material respects as if made on and as of the
Closing Date as well as on the date when made, other than with respect to
representations and warranties that refer to or speak as of a certain date,
except for changes occurring in the ordinary course of business since the date
hereof, and an officer of the Company shall have certified to such effect to the
Buyer in writing. The transactions set forth in Article I hereof shall have been
duly and validly effected and the Company, the Stockholders and Brendan shall
have performed in all material respects all of their respective obligations and
materially complied with each and all of the respective covenants required to be
performed or complied with by them on or prior to the Closing, and shall have
certified to such effect to the Buyer in writing.
Section 10.2 No Pending Action. No injunctive action or proceeding
before any court or governmental body will be pending wherein an unfavorable
judgment, decree or order would prevent the performance of this Agreement or the
consummation of any of the transactions contemplated hereby, declare unlawful
the transactions contemplated by this Agreement or cause such transactions to be
rescinded. There shall not have been any decree or order entered or any rule or
regulation promulgated or any law enacted by any Federal, State, local or other
governmental authority or by any court of competent jurisdiction, including the
entry of any injunction, which makes any of the transactions contemplated by
this Agreement illegal, or which otherwise prohibits restricts or delays the
consummation of any of the transactions
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contemplated by this Agreement and which was not the result of any act or
inaction by the Buyer.
Section 10.3 HSR Act. All filings required to be made under the HSR Act
shall have been made, and any applicable waiting period thereunder shall have
been terminated or shall have expired.
Section 10.4 Other Agreements and Consents. There shall have been
obtained at or prior to the Closing all consents to be obtained from and notices
to be given to any third party that may be necessary for the consummation of the
transactions contemplated by this Agreement pursuant to any Contract, license,
law, arrangement or understanding, except where the failure to obtain such
consent or give such notice would not have Material Adverse Effect or as
otherwise waived in writing by the Buyer.
Section 10.5 Revenue Backlog. On the Closing Date, the value of
products under sales orders in the Company's business that are not among the
Excluded Assets and which are recognizable as revenue under GAAP within sixty
(60) days following the Closing Date is at least $3,500,000 and the related
profit margins equal or exceed profit margins realized since January 1, 2000,
applying the same accounting methods applied by the Company since January 1,
2000.
Section 10.6 Securities Law Compliance. On or prior to the Closing
Date, (i) the Buyer shall have received evidence Buyer deems satisfactory that,
as of the Closing Date, there shall not be more than 35 Stockholders that are
not "accredited investors" (as defined in Rule 501 of Regulation D under the
Securities Act) and (ii) the Buyer shall have received from the Company
sufficient information relating to the Company to enable the Buyer to satisfy
the conditions in paragraph (b) of Rule 506 of Regulation D under the Securities
Act.
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS
Each and all of the obligations of the Company and the Stockholders to
consummate the transactions contemplated by this Agreement are subject to
fulfillment prior to or at the Closing of the following conditions:
Section 11.1 Accuracy of Warranties; Performance of Covenants. The
representations and warranties of the Buyer contained herein shall be accurate
in all material respects as if made on and as of the Closing Date, as well as on
the date when made, and an officer of the Buyer shall have certified to such
effect to the Company and the Stockholders in writing. The Buyer shall have
performed in all material respects all of the obligations and materially
complied with
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each and all of the covenants required to be performed or complied with on or
prior to the Closing and shall have certified to such effect in writing to the
Company and the Stockholders.
Section 11.2 No Pending Action. No injunctive action or proceeding
before any court or governmental body will be pending wherein an unfavorable
judgment, decree or order would prevent the performance of this Agreement or the
consummation of any of the transactions contemplated hereby, declare unlawful
the transactions contemplated by this Agreement or cause such transactions to be
rescinded. There shall not have been any decree or order entered or any rule or
regulation promulgated or any law enacted by any Federal, State, local or other
governmental authority or by any court of competent jurisdiction, including the
entry of any injunction, which makes any of the transactions contemplated by
this Agreement illegal, or which otherwise prohibits, restricts or delays the
consummation of any of the transactions contemplated by this Agreement and which
was not the result of any act or inaction by the Company, the Stockholders or
Brendan.
Section 11.3 HSR Act. All filings required to be made under the HSR Act
shall have been made, and any applicable waiting period thereunder shall have
been terminated or shall have expired.
Section 11.4 Other Agreements and Consents. There shall have been
obtained at or prior to the Closing all consents to be obtained from and notices
to be given to any third party that may be necessary for the consummation of the
transactions contemplated by this Agreement pursuant to any Contract, license
law, arrangement or understanding, except where the failure to obtain such
consent or give such notice would not have a Material Adverse Effect.
ARTICLE XII
TERMINATION OF AGREEMENT
Section 12.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written agreement of the Buyer and the Company;
(b) by the Buyer upon or in the event of any material breach
of the representations or warranties made by the Company, Brendan or the
Stockholders contained herein or failure by the Company, Brendan or any of the
Stockholders to perform and satisfy in any material respect any of their
respective covenants or obligations under this Agreement required to be
performed and satisfied by any of them on or prior to the Closing Date;
(c) by the Company upon or in the event of any material breach
of the representations or warranties made by the Buyer contained herein or
failure by the Buyer to perform and satisfy in any material respect any of its
covenants or obligations under this Agreement required to be performed and
satisfied by it on or prior to the Closing Date;
(d) by the Company or the Buyer if the Closing shall not have
occurred by July 31, 2000; provided, however, that the right to terminate this
Agreement pursuant to this
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paragraph (d) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of the failure of the Closing
to occur by July 31, 2000.
The party desiring to terminate this Agreement pursuant to any of
clauses (b) through (d) of this Section 12.1 shall give prior written notice of
such termination to the Buyer (in the case of the Company), the Company (in the
case of the Buyer) and the Stockholders' Representative.
Section 12.2 Effect of Termination. If this Agreement shall be
terminated as above provided, all obligations of the parties hereunder shall
terminate but any breaching party shall remain liable to the non-breaching
parties pursuant to and in accordance with Article XIII hereof.
Section 12.3 Right to Proceed. Anything in this Agreement to the
contrary notwithstanding, if any of the conditions specified in Article X hereof
have not been satisfied, the Buyer shall have the right to waive the
satisfaction of any such condition and to proceed with the transactions
contemplated hereby, and if any of the conditions specified in Article XI hereof
have not been satisfied, the Company shall have the right to waive the
satisfaction of any such condition and to proceed with the transactions
contemplated hereby.
ARTICLE XIII
INDEMNIFICATION
For purposes of this Article XIII, the following terms shall have the
following definitions:
"Buyer Indemnifying Party(ies)" shall mean the Buyer, and, if the
Closing takes place and the transactions contemplated by this Agreement are
consummated, the Company.
"Buyer's Indemnified Party(ies)" shall mean the Buyer and, if the
Closing takes place and the transactions contemplated by this Agreement are
consummated, the Company, and their respective officers, directors,
stockholders, employees and agents.
"Indemnified Party" shall mean any party asserting a claim for
indemnification under this Article XIII.
"Indemnifying Party" shall mean any party against whom a claim for
indemnification under this Article XIII has been asserted.
"Seller Indemnifying Party(ies)" shall mean the Stockholders, Brendan,
and, if the Closing does not take place and the transactions contemplated by
this Agreement are not consummated, the Company.
"Seller's Indemnified Party(ies)" shall mean Brendan, the Stockholders,
and, if the Closing does not take place and the transactions contemplated by
this Agreement are not consummated, the Company, and their respective officers,
directors, stockholders, employees and agents.
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Section 13.1 Joint and Several Indemnification by the Stockholders.
Subject to the limitations contained in this Article XIII, if the Closing takes
place and the transactions contemplated by this Agreement are consummated, the
Stockholders, jointly and severally, shall indemnify, defend, save and hold
harmless the Buyer's Indemnified Parties from and against any and all damage,
liability, loss, expense, assessment, judgment or deficiency of any nature
whatsoever, including, without limitation, reasonable attorneys' fees and other
costs and expenses incident to any suit, action or proceeding (a "Loss"),
incurred or sustained by any of the Buyer's Indemnified Parties, which shall
arise out of, result from, or constitute, a breach of any representation or
warranty set forth in Article IV of this Agreement or any covenant of the
Company or the Stockholders under this Agreement or any exhibit, schedule,
certificate or other document furnished at the Closing by the Company or the
Stockholders pursuant to this Agreement (except to the extent that such exhibit,
schedule, certificate or other document relates to the representations and
warranties made under Article V of this Agreement).
Section 13.1A Several Indemnification by the Stockholders Subject to
the limitations contained in this Article XIII, if the Closing takes place and
the transactions contemplated by this Agreement are consummated, each
Stockholder, severally, shall indemnify, defend, save and hold harmless the
Buyer's Indemnified Parties from and against any and all Loss incurred or
sustained by any of the Buyer's Indemnified Parties, which shall arise out of,
result from, or constitute, a breach of any representation or warranty of such
Stockholder set forth in Article V of this Agreement (or, any exhibit, schedule,
certificate or other document furnished at the Closing by such Stockholder
pursuant to this Agreement to the extent that such exhibit, schedule,
certificate or other document relates to the representations and warranties made
under Article V of this Agreement).
Section 13.1B Indemnification by the Company. Subject to the
limitations contained in this Article XIII, if the Closing does not take place
and the transactions contemplated by this Agreement are not consummated, the
Company shall indemnify, defend, save and hold harmless the Buyer's Indemnified
Parties from and against any and all Loss incurred or sustained by any of the
Buyer's Indemnified Parties, which shall arise out of, result from, or
constitute, a breach of any representation or warranty set forth in Article IV
or Article V of this Agreement or any covenant of the Company or the
Stockholders under this Agreement.
Section 13.1C Indemnification by Brendan. Subject to the limitations
contained in this Article XIII, if the Closing takes place and the transactions
contemplated by this Agreement are consummated, Brendan shall defend, save and
hold harmless the Buyer's Indemnified Parties from and against any and all Loss
incurred or sustained by any of the Buyer's Indemnified Parties, which (i) shall
arise out of, result from, or constitute, a breach of the representation set
forth in Section 4.10(d)of this Agreement or (ii) shall arise out of, or relate
to, any Assumed Liability. Notwithstanding anything expressed or implied in this
Agreement to the contrary, no Stockholder shall have any liability or obligation
of any kind or nature with respect to, or in connection with, any Assumed
Liability.
Section 13.2 Indemnification by Buyer. Subject to the limitations
contained in this Article XIII, the Buyer, and if the Closing takes place and
the transactions contemplated by this
-38-
Agreement are consummated, the Buyer and the Company, jointly and severally,
shall indemnify, defend, save and hold harmless the Seller's Indemnified Parties
from and against any and all Loss incurred or sustained by any of such Seller's
Indemnified Parties which shall arise out of, result from, or constitute, any
breach of, any representation or warranty set forth in Article VI of this
Agreement or any covenant of Buyer under this Agreement or any exhibit,
schedule, certificate or other document furnished at the Closing by the Buyer
pursuant to this Agreement.
Section 13.3 Survival of Representations, Warranties and Covenants.
(a) For the purposes of this Article XIII, the
representations, warranties and covenants of the parties hereto shall survive
the Closing until June 29, 2001 (the "Warranty Period"), and with respect to the
representation set forth in Section 4.10(d) of this Agreement, until June 29,
2002 (the "Spinoff Tax Warranty Period") provided, however, that the foregoing
limitation shall not apply to (i) any claim against Brendan for
indemnification(a arising out of or relating to any Assumed Liability (an
"Assumed Liability Claim") or (ii) any claim against a Stockholder for
indemnification arising out or relating to a breach of the representations and
warranties of such Stockholder set forth in Article V hereof (an "Article V
Claim").
(b) Any Indemnified Party asserting a claim for a breach of
any representation, warranty or covenant (other than an Assumed Liability Claim
or an Article V Claim) must give reasonably detailed notice of such claim to the
Indemnified Party within the Warranty Period, or for a claim for indemnification
arising out of or relating to a breach of the representation set forth in
Section 4.10(d) of this Agreement (a "Spinoff Tax Claim"), within the Spinoff
Tax Warranty Period, and such claim shall be deemed to have arisen, for the
purposes of this Article XIII, as of the date of such notice.
(c) The representations and warranties of the Stockholders set
forth in Article V hereof, and the obligation of Brendan to indemnify the
Buyer's Indemnified Parties with respect to any Assumed Liability, shall survive
the Closing for so long as any claim may be made in respect of such matters
under any applicable statute of limitations, as it may be extended (the
"Extended Warranty Period"). Any Assumed Liability Claim or Article V Claim must
be made by reasonably detailed notice to the Indemnifying Party within the
Extended Warranty Period and such claim shall be deemed to have arisen, for the
purposes of this Article XIII, as of the date of such notice.
Section 13.4 Limitations of Liability for Losses.
(a) Notwithstanding any other provision to the contrary in
this Agreement, all claims for indemnification by the Buyer's Indemnified
Parties under this Article XIII (other than Assumed Liability Claims or Article
V Claims) shall be satisfied solely from the Escrow Shares (valued as specified
in the Escrow Agreement), and no Seller Indemnifying Party shall otherwise have
any direct or indirect liability to any Buyer's Indemnified Party; provided,
however, that the Buyer's Indemnified Parties may proceed against Brendan to the
extent that a Spinoff Tax Claim cannot be satisfied in full by proceeding
against the Escrow Shares, subject to the limitations set
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forth below in this paragraph (a) and elsewhere in this Section 13.4. In no
event shall the aggregate indemnification obligation of Brendan exceed
$2,500,000.
(b) Notwithstanding any other provision to the contrary in
this Agreement, in no event shall any Stockholder individually be required to
indemnify the Buyer's Indemnified Parties for any Loss arising out of a breach
of the representations and warranties of the Stockholders set forth in Article V
hereof to the extent that the aggregate amount of Losses suffered by the Buyer's
Indemnified Parties exceeds the product of the Average Closing Price multiplied
by the number of Buyer's Shares received by such Stockholder at the Closing.
(c) Other than in respect of any Losses relating to or arising
out of Assumed Liability Claims or Article V Claims for which no Buyer
Deductible (defined herein) shall apply, no Seller Indemnifying Party shall be
required to indemnify any of the Buyer's Indemnified Parties under this Article
XIII except to the extent that the aggregate amount of all Losses (other than
Losses relating to or arising out of Assumed Liability Claims or Article V
Claims) for which the Buyer's Indemnified Parties are otherwise entitled to
indemnification hereunder exceed Five Hundred Thousand Dollars ($500,000) (the
"Buyer Deductible"), whereupon the Buyer's Indemnified Parties shall be entitled
to be paid each dollar of Losses in excess of the Buyer Deductible by the Seller
Indemnifying Party or Seller Indemnifying Parties required to provide
indemnification pursuant to this Article XIII, subject to the recourse
limitations and the limitations on maximum amount of recovery set forth above in
paragraph (a).
(d) No Buyer Indemnifying Party shall be required to indemnify
any of the Seller's Indemnified Parties under this Article XIII except to the
extent that the aggregate amount of all Losses for which the Seller's
Indemnified Parties are otherwise entitled to indemnification hereunder exceed
Five Hundred Thousand dollars ($500,000) (the "Seller Deductible"), whereupon
the Seller's Indemnified parties shall be entitled to be paid each dollar of
Losses in excess of the Seller Deductible by the Buyer Indemnifying Parties or
Buyer Indemnifying Parties required to provide indemnification pursuant to this
Article XIII, provided, that the maximum aggregate indemnification obligation of
the Buyer's Indemnifying Parties not exceed $4,600,000.
(e) Notwithstanding anything herein to the contrary, the
amount of any Loss of any of the Buyer's Indemnified Parties or the Seller's
Indemnified Parties shall be reduced by (i) the amount of any insurance proceeds
received by such party with respect to such Loss, and (ii) the amount of any tax
benefit realized or realizable on account of such Loss; and there shall be no
obligation hereunder to indemnify such party for that portion of the Loss.
(f) If any Indemnified Party recovers any amount from any
insurer after payment to such Indemnified Party by one or more Indemnifying
Parties of all Loss suffered or incurred by such Indemnified Party in respect of
the matters to which such insurance payment relates, then such Indemnified Party
will promptly pay over to such Indemnifying Parties the amount so recovered, to
the extent not in excess of the amount previously paid by such Indemnifying
Parties to such Indemnified Party in respect of such matter.
(g) Any Indemnifying Party which indemnifies any Indemnified
Party for any matter pursuant to this Article XIII shall, upon payment of the
amount owed with respect to such
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matter pursuant to this Article XIII, be subrogated to the rights of such
Indemnified Party against all other persons with respect to the matter for which
indemnification was provided and, in its own name or in the name of the
Indemnified Party, may assert any claim or counter-claim against any such person
which the Indemnified Party may have with respect thereto.
(h) The provisions of this Article XIII will not apply to
claims for indemnification or contribution arising under or in connection with
Article XIV hereof or any other transactions contemplated by Article XIV hereof.
Section 13.5 Claims. Promptly after an Indemnified Party has received
notice of or has knowledge of any claim (a "Claim") by a person not a party to
this Agreement (a "Third Person") or the commencement of any action or
proceeding by a Third Person, the Indemnified Party shall, as a condition
precedent to a Claim with respect thereto for indemnification under this Article
XIII, give the Indemnifying Party (or with respect to notice to any Stockholder,
to the Stockholders' Representative) reasonably detailed written notice of such
Claim or the commencement of such action or proceeding; provided, however, that
the failure to give such notice will not affect the Indemnified Party's right to
indemnification hereunder with respect to such Claim except to the extent that
the Indemnifying Party has been actually prejudiced as a result of such failure.
If the Indemnifying Party notifies the Indemnified Party within thirty (30) days
from the receipt of the foregoing notice that he or it wishes to defend against
the claim by the Third Person, the Indemnifying Party shall have the right to
assume and control the defense of the claim by appropriate proceedings with
counsel reasonably acceptable to the Indemnified Party for such defense. The
Indemnified Party may participate in the defense, at its sole expense, of any
such Claim for which the Indemnifying Party shall have assumed the defense
pursuant to the preceding sentence, provided that counsel for the Indemnifying
Party shall act as lead counsel in all matters pertaining to the defense or
settlement of such claims, suits or proceedings. Neither the Indemnified Party
nor the Indemnifying Party shall make any settlement with respect to any such
Claim without the prior written consent of the other, which consent shall not be
unreasonably withheld or delayed.
Section 13.6 Request for Indemnification.
(a) In the event that at any time or from time to time, any
party shall determine that it is entitled to indemnification under Article XIII
of this Agreement, such party shall give reasonably detailed written notice to
the Indemnifying Party (or with respect to notice to any Stockholder, to the
Stockholders' Representative) specifying the basis on which indemnification is
sought, the amount of the asserted Loss and requesting indemnification. In the
event indemnification is required under this Agreement, (i) with respect to a
Claim, it is contemplated by the parties hereto that payment shall be made to
the Indemnified Party at or about the time the Indemnified Party shall be
required to make payment with respect to the Claim, unless there shall be a
dispute as to the Indemnified Party's entitlement to indemnification or the
extent thereof, in which case adjustment will be made upon resolution of said
dispute, and (ii) with respect to any other matter, such payment will be so made
at the time the amount of any such item shall have been finally determined and
the liability for such indemnification shall have been agreed upon as between
the parties or has been otherwise determined. Upon receipt of any
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request for indemnification, the Indemnifying Party may acknowledge his or its
indemnification obligations by delivering written notice of such acknowledgement
to the Indemnified Party (or with respect to notice to any Stockholder, to the
Stockholders' Representative)within thirty (30) days following receipt of notice
from the Indemnifying Party's requesting indemnification. Failure on the part of
any of the Indemnifying Party so to acknowledge indemnification obligations
shall constitute a rejection by such party of the request to indemnify. If after
such thirty (30) day period there remains a dispute as to any request for
indemnification, the Indemnifying Party and Indemnified Party and/or their
representative shall attempt in good faith for thirty (30) days to agree upon
the rights of the respective parties with respect to such request for
indemnification. If the Indemnifying Party and Indemnified Party should so
agree, a memorandum setting forth such agreement shall be prepared and signed by
both parties.
(b) If no such agreement can be reached after good faith
negotiation, either Indemnifying Party or Indemnified Party may, by written
notice to the other (or with respect to notice to any Stockholder, to the
Stockholders' Representative), demand arbitration of the matter in accordance
with Section 16.10 hereof, unless the amount of the damage or loss is at issue
in pending litigation with a Third Person, in which event arbitration shall not
be commenced until such amount is ascertained or both the Indemnifying Party and
the Indemnified Party agree to arbitration. The decision of the arbitrators as
to the validity and amount of any claim shall be binding and conclusive on the
parties to this Agreement.
Section 13.7 Exclusive Remedy. Each of the parties acknowledges and
agrees that his or its sole and exclusive remedy in respect of any and all
claims arising under this Agreement will be pursuant to the indemnification
provisions of this Article XIII, provided, however, that the foregoing
limitations shall not apply to any and all claims arising under Article XIV
hereof. Notwithstanding the generality of the foregoing, nothing in this Section
13.7 shall be construed to limit the non-monetary equitable remedies of any
party in respect of any breach by any other party of any covenant or other
agreement contained in or this Agreement or in any agreement, document or
instrument delivered pursuant to this Agreement.
ARTICLE XIV
REGISTRATION
Section 14.1 Registration. Within thirty (30) days of the Closing Date,
the Buyer shall prepare for filing and file with the SEC a registration
statement under the Securities Act on Form S-3 (or any successor short form
registration involving a similar amount of disclosure) for resale of all the
Buyer's Shares issued to the Stockholders to be made on a continuous basis
pursuant to Rule 415 of the Securities Act (the "Registration Statement"). The
Buyer will use reasonable efforts to cause such Registration Statement to become
effective and remain continuously effective for one year following the Closing
Date, except as such period may be extended pursuant to the provisions of this
Section 14.1. The Buyer may, upon written notice to the Stockholders, suspend
the Stockholders' use of the Registration Statement for a reasonable period not
to exceed sixty (60) days if the Buyer in its reasonable judgment believes it
may possess material nonpublic information the disclosure of which at that point
in time in its
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reasonable judgment would have a material adverse effect on the Buyer and its
subsidiaries taken as a whole but such suspension right shall not be exercised
more than once, and the Buyer shall increase the time period during which it
must keep such Registration Statement effective for a period of time equal to
the lesser of (i) that of such suspension period plus any period for which the
effectiveness of the Registration Statement shall be extended pursuant to
Section 14.7(b) or (ii) the period prior to which the Buyer's Shares are
eligible for sale pursuant to Rule 144(k).
Section 14.2 Covenants of the Stockholders. The Stockholders covenant
and agree that the Stockholders shall provide to the Buyer on a timely basis
such consents, representations and information and execute such documents as may
reasonably be required by the Buyer or any underwriter in connection with such
registration.
Section 14.3 Expenses. The expenses of registration and sale of the
Buyer's Shares pursuant to Section 14.1 will be paid by the Buyer. For purposes
of this Section 14.3, the term "expenses" shall include federal, state and other
registration and qualification fees, legal fees and expenses for the Buyer's
counsel (but excluding the fees and expenses, if any, of counsel or other
advisors to the Stockholders), auditing and accounting expenses incurred by the
Buyer in connection with the registration, printing and other related expenses
including salary and related overhead expenses of employees of the Buyer for
time expended by such employees. The Stockholders shall be responsible for the
fees and expenses of their counsel and any other advisors and for any brokers'
commissions or underwriting discounts incurred in connection with sales of
Buyer's Shares under Section 14.1.
Section 14.4 Exclusive Obligation to Register. Except as provided in
this Article XIV, the Buyer will have no obligation to register under the
Securities Act any Buyer's Shares received by the Stockholders pursuant to this
Agreement.
Section 14.5 State Securities Laws. In connection with the registered
offering of any Buyer's Shares pursuant to this Agreement, the Buyer will take
such action as may be necessary to qualify or register the Buyer's Shares to be
sold under the securities or "blue-sky" laws of such jurisdictions as may be
reasonably requested by the Stockholders; provided, however, that the Buyer will
not be obligated to qualify as a foreign corporation to do business under the
laws of any such jurisdiction in which it is not then qualified or to file any
general consent to service of process.
Section 14.6 Indemnification and Contribution.
(a) To the extent permitted by law, the Buyer will indemnify
and hold harmless each of the Stockholders, their respective officers and
directors, any underwriter (as defined in the Securities Act) and each person,
if any, who controls such Stockholders or such underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which any of them may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained or expressly incorporated by reference
in any such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendment or
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supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, and
will reimburse each of the Stockholders and their respective officers and
directors and each such underwriter or controlling person for any legal or other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 14.6(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Buyer (which
consent shall not be unreasonably withheld or delayed) nor shall the Buyer be
liable in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in connection with such
registration statement, preliminary prospectus, final prospectus or amendment or
supplement thereto in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by the
Stockholders or any person controlling the Stockholders or by any such
underwriter selected by the Stockholders, or any person controlling such
underwriter.
(b) To the extent permitted by law, each Stockholder will,
severally, indemnify and hold harmless the Buyer, its directors, its officers
who have signed such registration statement, each person, if any, who controls
the Buyer within the meaning of the Securities Act and any underwriter (as
defined in the Securities Act) against any losses, claims, damages or
liabilities to which the Buyer or any such director, officer, controlling
person, or underwriter may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained or expressly incorporated by reference
in such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendment or supplement thereto, or arise
out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary prospectus, final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by such Stockholders expressly for
use in connection with such registration; and such Stockholder will reimburse
any legal or other expenses reasonably incurred by the Buyer or any such
director, officer, controlling person, or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action. It
is agreed that the indemnity agreement contained in this Section 14.6(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
indemnifying party (which consent shall not be unreasonably withheld or delayed)
and provided further that no Stockholder will have any liability under this
Section 14.6(b) in excess of the product obtained by multiplying (i) the Average
Closing Price by (ii) the number of Buyer's Shares issued to such Stockholder
pursuant to this Agreement.
(c) If the indemnification provided for in Section 14.6(a) and
(b) hereof is unavailable to a person entitled to indemnification hereunder,
then each person that would have been an indemnifying party hereunder will, in
lieu of indemnifying such indemnified party,
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contribute to the amount paid or payable by such indemnified person for which
indemnification is provided herein in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and such indemnified party,
respectively, in connection with the statements or omissions which resulted in
the loss, damages, etc. underlying such indemnification obligations. Relative
fault will be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied in writing by
the indemnifying party or such indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Buyer and the Stockholders agree that it would
not be just and equitable if contribution pursuant to this Section 14.6(c) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to above in this
Section 14.6(c). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(d) Promptly after receipt by a party indemnified under this
Section 14.6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 14.6, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party desires, jointly with
any other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties. The failure to notify any
indemnifying party promptly of the commencement of any such action, shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section 14.6, except to the extent that such indemnifying party is actually
prejudiced thereby.
Section 14.7 Miscellaneous Provisions Regarding Registration.
(a) Upon effecting any registration of Buyer's Shares
hereunder, the Buyer will:
(i) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all of the Buyer's Shares for the time period specified in
Section 14.1 hereof;
(ii) furnish to each of the Stockholders and to any
underwriter of Buyer's Shares such number of copies of the Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such registration statement
(including each preliminary prospectus and summary prospectus) or filed under
Rule 424(b) under the Securities Act in accordance with Rule 430A thereunder, in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in the Registration Statement or such prospectus, and
such other documents as the
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Stockholders or any underwriter of the Buyer's Shares may reasonably request in
order to facilitate the disposition of the Buyer's Shares registered in such
registration statement;
(iii) promptly notify each of the Stockholders at any
time when a prospectus relating to a Registration Statement is required to be
delivered under the Securities Act, of the occurrence of any event as a result
of which the prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and at the
request of any Stockholder prepare and furnish to such Stockholder 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 such Buyer's
Shares, such prospectus will 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 light of the circumstances then
existing;
(iv) provide a transfer agent for the Buyer's Common
Stock no later than the effective date of the Registration Statement;
(v) cause the Buyer's Shares to be listed on the
Nasdaq National Market;
(vi) enter into such customary agreements and take
all such other action in connection therewith as the Stockholders may reasonably
request in order to expedite or facilitate the disposition of such Buyer's
Shares ; and
(vii) if such registration is in connection with an
underwritten offering of securities, furnish to the Stockholders a signed
counterpart, addressed to the Stockholders, of (i) any opinion of counsel to the
Buyer being delivered to the underwriter in connection with such underwritten
offering dated the effective date of the registration statement, and (ii) any
"comfort" letter signed by the independent public accountants of the Buyer being
delivered to the underwriter in connection with such underwritten offering.
(b) Each Stockholder will, upon receipt of any notice from the
Buyer of the occurrence of any event of the kind described in Section 14.7(a)(3)
hereof, discontinue disposition of Buyer's Shares pursuant to the Registration
Statement until Stockholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 14.7(a)(3) hereof, which supplemented
or amended prospectus shall be made available to the Stockholders as soon as
possible. The period of time during which the Buyer is obligated to maintain the
effectiveness of the Registration Statement under Section 14.1 above shall be
extended by the number of days of any such discontinuance.
Section 14.8 Reports Under the Exchange Act. With a view toward making
available to the Stockholders the benefits of Rule 144 promulgated under the
Securities Act ("Rule 144") and any other rule or regulation of the SEC that may
at any time permit a Stockholder to sell securities of the Buyer to the public
without registration, the Buyer agrees to:
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(a) make and keep public information available, within the
meaning of Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Buyer under the Securities Act and the Exchange Act;
and
(c) furnish to any Stockholder forthwith upon request a
written statement by the Buyer that it has complied with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange Act, a copy
of the most recent annual or quarterly report of the Buyer, and such other
reports and documents filed by the Buyer with the SEC as may reasonably be
requested in availing any such holder to take advantage of any rule or
regulation of the SEC permitting the selling of any Buyer's Shares without
registration.
Section 14.9 Transfer of Registration Rights. The registration rights
of any Stockholder (and of any permitted transferee of any Stockholder or other
permitted transferee) under this Agreement may be transferred (i) to any
transferee who acquires at least 25% of the Buyer's Shares acquired by any
Stockholder directly or indirectly from such Stockholder other than pursuant to
a sale which is registered under the Securities Act or which is exempt from such
registration requirements pursuant to Rule 144 or (ii) to any Related Person (as
defined below) of such Stockholder; provided that in either case the transferee
executes an instrument agreeing to be bound by the terms and conditions of
Article XIV of this Agreement. Prompt notice shall be given to the Buyer with
respect to any such transfer stating the name and address of any permitted
transferee. For purposes of this Section 14.9, "Related Person" shall mean (a)
in relation to any individual, (1) any spouse, parent or issue of such
individual or any spouse of any such issue, (2) any trust for the benefit of any
one or more of such individual, any spouse, parent or issue of such individual,
and any spouse of any such issue, and (3) any legal representative of any of
such individual, any spouse, parent or issue of such individual and any spouse
of any such issue; (b) in relation to any trust, any settlor or any beneficiary
thereof; (c) in relation to the estate of any individual, (1) any legal
representative of such estate, (2) any legatee or heir of such individual or (3)
any trust for the benefit of any one or more of such legatees and heirs; and (d)
in relation to any other Stockholder, any Stockholder Affiliate (as defined
below) of such Stockholder. For purposes of this Section 14.9, the word "issue"
shall also include issue by adoption; and the word "spouse" shall not include a
spouse from whom an individual is legally separated or in the process of
obtaining a separation or divorce. For purposes of this Section 14.9,
"Stockholder Affiliate" shall mean with respect to any person, any person or
entity that directly or indirectly controls, is controlled by, or is under
common control with, such person.
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ARTICLE XV
STOCKHOLDER REPRESENTATIVE
Section 15.1 Stockholder Representative.
(a) In order to efficiently administer the transactions
contemplated hereby, including the defense and/or settlement of any claims for
which the Stockholders may be required to indemnify the Buyer's Indemnified
Parties pursuant to Article XIII of this Agreement or for which the Buyer shall
have the right to make a claim against Escrow Shares pursuant to this Agreement
and the Escrow Agreement, the Stockholders hereby designate ▇▇▇▇▇ ▇▇▇▇▇▇▇ as
their representative (in such capacity, the "Stockholder Representative").
(b) The Stockholders hereby authorize the Stockholders
Representative (i) to take all action necessary in connection with the defense
and/or settlement of any claims for which the Stockholders may be required to
indemnify Buyer's Indemnified Parties pursuant to Article XIII of this Agreement
or for which the Buyer shall have the right to make a claim against Escrow
Shares pursuant to this Agreement and the Escrow Agreement, (ii) to execute the
Escrow Agreement on behalf of the Stockholders as Stockholder Representative;
(iii) to act as representative of the Stockholders in connection with any and
all matters arising under the Escrow Agreement or with respect to the Escrow
Shares, (iv) to give and receive all notices required to be given under Article
XIII, Article XV and Section 16.10 hereof and the Escrow Agreement, and (v) to
select any arbitrator pursuant to Section 16.10 hereof. Notwithstanding the
foregoing or anything elsewhere in this Agreement to the contrary, no
Stockholder is appointing the Stockholder Representative, and the Stockholder
Representative shall have no authority, to act on behalf of such Stockholder in
any capacity (including, without limitation, for purposes of receiving notices)
in connection with any claim for indemnification by any of the Buyer's
Indemnified Parties that arises out of, or results from, a breach of any
representation or warranty of such Stockholder set forth in Article V hereof.
(c) In the event that the Stockholder Representative dies,
becomes unable to perform [his] responsibilities hereunder or resigns from such
position, the Stockholders holding, immediately prior to the Closing, a majority
of the combined voting power of the Company Shares shall select another
representative to fill such vacancy and such substitute representative shall be
deemed to the Stockholder Representative for all purposes of this Agreement, the
Escrow Agreement, and the other documents delivered pursuant hereto and thereto.
(d) All decisions of or actions by the Stockholder
Representative as authorized hereby shall be binding upon all of the
Stockholders and no Stockholder shall have the right to object, dissent, protest
or otherwise contest the same.
(e) Each Stockholder hereby agrees that:
(i) the Buyer's Indemnified Parties shall be able to
rely conclusively on the instructions and decisions of the Stockholder
Representative as to the settlement of any claims for indemnification by the
Buyer's Indemnified Parties pursuant to Article XIII of this Agreement or for
which the Buyer shall have the right to make a claim against Escrow Shares
pursuant to this Agreement and the Escrow Agreement, or as to any other actions
required or permitted to be taken by the Stockholders Representative hereunder
or under the Escrow Agreement, and no party hereunder shall have any cause of
action against the Buyer and/or any
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of the other Buyer's Indemnified Parties to the extent that any of them has
relied upon the instructions or decisions of the Stockholder Representative;
(ii) all actions, decisions and instructions of the
Stockholder Representative shall be conclusive and binding upon all of the
Stockholders and no Stockholder shall have any cause of action against the
Stockholders Representative for any action taken, decision made or instructions
given by the Stockholders Representative, except for fraud or willful breach of
this Agreement by the Stockholders Representative;
(iii) the provisions of this Section 15.1 are
independent and severable, are irrevocable and are coupled with an interest and
shall be enforceable notwithstanding any rights or remedies that any Stockholder
may have in connection with the transactions contemplated by this Agreement;
(iv) the provisions of this Section 15.1 shall be
binding upon the executors, heirs, legal representatives, personal
representatives, successor trustees, and successors of each Stockholder, and any
references in this Agreement to a Stockholder or the Stockholders shall mean and
include the successors to the Stockholder's rights hereunder, whether pursuant
to testamentary disposition, the laws of descent and distribution or otherwise.
(f) All fees and expenses incurred by the Stockholder
Representative shall be paid by the Stockholders in proportion to their
ownership of Company Shares.
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Further Action. Each party agrees that it will, at its
expense, take such action and execute and deliver such documents as may be
reasonably necessary to effectuate the transactions contemplated by this
Agreement.
Section 16.2 Survival. Except for representations, warranties and
covenants contained in Article XIV hereof which shall survive the Closing and
continue in effect in accordance with their respective terms, the
representations, warranties and covenants of the Company, Brendan, the
Stockholders and the Buyer made in this Agreement, and the rights of any party
to make a claim for indemnification under this Agreement, shall survive for the
periods set forth in Section 13.3 of this Agreement.
Section 16.3 Amendment, Waiver and Consent. No waiver of any provision
of this Agreement, nor any consent granted hereunder, shall in any event be
effective, unless the same shall be in writing and signed by the party granting
such waiver or consent and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No
amendment to this Agreement shall be effective unless in writing and signed by
the Buyer, the Company, Brendan and the Stockholders' Representative.
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Section 16.4 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or by commercial messenger or courier service, or mailed by
registered or certified mail (return receipt requested) or sent via facsimile
(with acknowledgement of complete transmission) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice), provided, however, that notices sent by mail will not be deemed given
until received:
(a) If to the Buyer or, after the Closing Date, to
the Company, to:
Pinnacle Systems, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Brown, Rudnick, Freed & Gesmer
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Brendan, or, prior to the Closing Date,
to the Company, to:
Brendan Corp.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
(d) If to any Stockholder, to address of such
Stockholder set forth on the signature pages
hereto
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With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
(e) If to the Stockholders' Representative, to:
▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Brendan Corp.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Section 16.5 Publicity and Disclosures. Prior to the Closing, no public
release or any public disclosure (other than the publication of an early
termination notice in connection with the filing made under the HSR Act), either
written or oral, of the transactions contemplated by this Agreement shall be
made without the prior knowledge and written consent of both the Buyer and the
Company, provided, however, that, notwithstanding the foregoing, the Buyer shall
be free to make such public announcements and disclosure regarding the
transactions contemplated hereby, in such form and at such times, as the Buyer
reasonably believes are necessary in order to comply with applicable federal and
state securities laws, without prior consent of the Company.
Section 16.6 Counterparts and Effectiveness. This Agreement may be
executed simultaneously in two or more counterparts, each of which when executed
and delivered shall be deemed an original, but all of which together shall
constitute one and the same Agreement, and all signatures need not appear on any
one counterpart. This Agreement shall only be effective when executed and
delivered by all of the parties hereto.
Section 16.7 Parties in Interest. This Agreement, together, with the
exhibits and schedules hereto, which schedules and exhibits are incorporated
herein by their reference, shall be binding and inure to the benefit of the
parties named herein and their respective heirs, legal
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representatives, successors and assigns. This Agreement is not assignable by any
party hereto except to the extent otherwise provided in Section 14.9 hereof.
Section 16.8 Entire Agreement. This Agreement, including the exhibits
and schedules attached hereto and the documents delivered pursuant hereto,
constitutes the entire agreement among the parties with respect to the
transactions contemplated hereby and supersedes all other representations,
warranties, agreements and understandings among the parties.
Section 16.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal, substantive laws of the Commonwealth
of Massachusetts (other than any conflict of laws rule which might result in the
application of the laws of any other jurisdiction).
Section 16.10 Arbitration. Any claim or dispute arising out of or
related to this Agreement, or the interpretation, making, performance, breach or
termination thereof, shall be finally settled by binding arbitration in Boston,
Massachusetts in accordance with the then current Commercial Arbitration Rules
of the American Arbitration Association and judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof. The
arbitrator(s) shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve a
dispute. Such arbitration shall be conducted by a single arbitrator chosen by
mutual agreement of (i) the Buyer, on the one hand and (ii) if such claim or
dispute involves Brendan, Brendan (iii) if such claim or dispute involves any
Stockholder, the Stockholder Representative, and (iv) if such claim or dispute
involves Brendan and any Stockholder, jointly by Brendan and the Stockholder
Representative, on the other hand. Failing such agreement, the arbitration shall
be conducted by three independent arbitrators, none of whom shall have any
competitive interests with Buyer, the Company, Brendan or the Stockholders.
Buyer shall choose one such arbitrator. The second arbitrator shall be chosen by
(i) if such claim or dispute involves Brendan, Brendan, (ii) if such claim or
dispute involves any Stockholder, the Stockholder Representative, and (iii) if
such claim or dispute involves Brendan and any Stockholder, jointly by Brendan
and the Stockholder Representative. Such two arbitrators shall mutually select a
third arbitrator. Any decision of two such arbitrators shall be binding on all
of the parties to this Agreement. The parties to the arbitration may apply to a
court of competent jurisdiction for a temporary restraining order, preliminary
injunction or other interim or conservatory relief, as necessary, without breach
of this arbitration provision and without abridgement of the powers of the
arbitrator(s). Each party shall pay his or its own costs and expenses (including
counsel fees) of any such arbitration, except that the arbitrator(s) can compel
one party to pay all or a portion of another party's reasonable costs and
expenses, including without limitation AAA administrative fees, arbitrator fees,
attorney's fees, expert fees, witness fees, travel expenses and out of pocket
expenses. Notwithstanding the foregoing or anything elsewhere in this Agreement
to the contrary, the Stockholder Representative shall have no authority to act
on behalf of any Stockholder in any capacity, including, without limitation, the
selection of the of an arbitrator as provided in this Section 16.10, in
connection with any claim for indemnification by any of the Buyer's Indemnified
Parties that arises out of, or results from, a breach of any representation or
warranty of such Stockholder set forth in Article V hereof (it being understood
that in the event of any
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case or dispute to which the provisions of this Section 16.10 apply relates to a
claim for indemnification against any Stockholder for breach of a representation
or warranty of such Stockholder set forth in Article V, then any reference in
this Section 16.10 to the Stockholder Representative shall be deemed to be a
reference to such Stockholder)..
Section 16.11 Headings. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 16.12 Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation and execution of this
Agreement and, therefor, 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 responsible for drafting such
agreement or document.
Section 16.13 Expenses. Each of the parties will bear his or its own
expenses in connection with the negotiation and the consummation of the
transactions contemplated by this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed as an instrument under seal all as of the date first written
above.
PINNACLE SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer, Secretary
AVID SPORTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President & CEO
BRENDAN CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Stockholders' Representative
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STOCKHOLDERS
Name: Avid Technology, Inc.
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Address:
--------------------------------------------
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ Communications, Inc.
Signature: /s/ Del ▇▇▇▇▇▇
-----------------------------------
Title: Sr. Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: Intel Corporation
Signature: /s/
--------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Attn: M&A Portfolio Manager, RNG-46
--------------------------------------------
With a copy to
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇,▇▇ ▇▇▇▇▇
--------------------------------------------
Attn: General Counsel, SC4-203
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Address: ▇ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (O'Brien)
Signature: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (▇'▇▇▇▇▇)
--------------------------------------------
Address: ▇ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., #▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Address: 14 Starwood Crossing
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
--------------------------------------------
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Address: 14 Deer Path 5
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Address: One ▇▇▇▇▇▇▇ Street
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Address: 96 Stage Coach Road
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▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
--------------------------------------------
▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
v
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇
Signature: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------------------
Address: ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------------------
Address: ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Address: ▇ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Address: ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Name: Colony Investments Limited
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Address: Vali Hi, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇, Bermuda
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