EXCHANGE AGENT AGREEMENT
THIS EXCHANGE AGREEMENT (the "Exchange Agreement") is made and
entered into effective as of this ____ day of ___________, 1998, by
and among OAK TECHNOLOGY, INC. ("Oak"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇.
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(each a "Stockholder Representative" and collectively, the
"Stockholder Representatives"), and STATE STREET BANK AND TRUST
COMPANY (the "Exchange Agent").
R E C I T A L S
This Exchange Agreement is being entered into in accordance with
the provisions of that certain Plan of Reorganization and Agreement
of Merger dated as of January ___, 1998 (the "Plan of Reorganization"),
by and among Oak, Pixel Magic, Inc., OTI Acquisition Corporation,
Xerographic Laser Images Corporation ("XLI") and certain stockholders
of XLI. Capitalized terms used but not defined herein shall have the
respective meanings assigned to such terms in the Plan of Reorganization,
a copy of which is appended hereto.
Oak desires the Exchange Agent to act as Exchange Agent pursuant
to the Plan of Reorganization, and the Exchange Agent has indicated
its willingness to do so.
NOW, THEREFORE, in consideration of the mutual agreements set
forth below and in the Plan of Reorganization, and for other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
A G R E E M E N T
1. Appointment of Exchange Agent. Oak hereby confirms the
appointment of State Street Bank & Trust Co as Exchange Agent, and
State Street Bank & Trust Co hereby agrees to serve as such, upon the
terms and conditions set forth herein.
2. Plan of Reorganization. The Exchange Agent hereby
acknowledges receipt of the copy of the Plan of Reorganization
appended hereto, but except for reference thereto for definitions of
certain words or terms not defined herein, or as otherwise provided
in this Exchange Agreement, the Exchange Agent is not charged with
any duties or responsibilities with respect to the Plan of
Reorganization.
3. Exchange Procedures. Upon delivery to the Exchange Agent
of a certificate from Oak that the Merger has become effective, the
Exchange Agent shall as promptly as practicable, mail, by first class
mail, postage prepaid to each holder of record of a certificate or
certificates which immediately prior to the Effective Time of the
Merger represented outstanding shares of XLI Stock (the
"Certificates"): (i) a letter of transmittal; and (ii) instructions
for use in effecting the surrender of the Certificates in exchange
for the Consideration, including an envelope addressed to the
Exchange Agent for use by such XLI Stockholder in exchanging his, her
or its Certificates. Notwithstanding anything to the contrary
contained in this Section 3, no letter of transmittal or instructions
for use in effecting the surrender of Certificates for the
Consideration shall be mailed by the Exchange Agent to any Dissenting
Stockholder, nor shall the Exchange Agent accept surrender of a
Certificate held by a Dissenting Stockholder or pay the Consideration
to such Dissenting Stockholder. Any Certificates or other
correspondence received from Dissenting Stockholders shall be
promptly forwarded to Oak by the Exchange Agent.
4. Lists of XLI Stockholders and Holders of XLI Warrants.
Within one business day following the Effective Date, the Stockholder
Representatives shall deliver or cause to be delivered to the
Exchange Agent, with a copy to Oak: (i) a list of the names,
addresses and number of shares of XLI Stock held by all XLI
Stockholders at the Effective Time, which list shall include the
names of Dissenting Stockholders and the number of shares of XLI
Stock held by any Dissenting Stockholder, and shall also include for
each holder of XLI Preferred Stock the number of shares of XLI Common
Stock into which outstanding shares of XLI Preferred Stock were
convertible at the Effective Time, including shares of XLI Preferred
Stock held by any Dissenting Stockholder; and (ii) a list of the
names and addresses of all holders of XLI Warrants outstanding at the
Effective Time, which list shall include the number of shares XLI
Common Stock into which each such XLI Warrant is convertible upon
exercise of such XLI Warrant, including shares of XLI Common Stock
into which shares of XLI Preferred Stock are convertible, the
exercise price per share payable in connection with the exercise of
any XLI Warrant and the date of expiration of such XLI Warrant.
Without limiting the generality of the foregoing, the list of XLI
Warrants outstanding at the Effective Time shall indicate by
individual holder the type or types of XLI Warrants held by such
holder, with the information required by clause (ii) above presented
separately for each XLI Warrant. The lists provided to the Exchange
Agent pursuant to clause (i) above shall also reflect the certificate
numbers of the Certificates, and include appropriate identification
of all Certificates alleged to have been lost, stolen or destroyed,
all Certificates the transfer of which is restricted and all "stops"
notations in effect with respect to such Certificates. All such
lists when delivered to the Exchange Agent shall be certified as true
and correct.
5. Delivery of Funds to Exchange Agent.
5.1 Merger Cash Funds. Pursuant to the Plan of
Reorganization, including Section 2.5.2.1 thereof, Oak shall deliver
to the Exchange Agent not later than one business day following the
Effective Date, by wire transfer of funds, an amount equal to Merger
Cash multiplied by the sum of (i) the total number of shares of XLI
Common Stock outstanding at the Effective Time, plus (ii) the total
number of shares of XLI Common Stock into which outstanding shares of
XLI Preferred Stock were convertible at the Effective Time. Oak
shall deduct from such amount, an amount equal to Merger Cash
multiplied by the total number of shares of XLI Stock (on an as
converted basis) held by Dissenting Stockholders, such amount to be
retained by Oak.
5.2 Initial Distribution Amount. Pursuant to the Plan
of Reorganization, including Section 2.6 and 2.7 thereof, the Escrow
Agent shall deliver to the Exchange Agent, not later than fifteen
(15) calendar days following delivery to the Escrow Agent by Oak of
the Contingent Cash payable by Oak for the calendar quarter ended
March 31, 1999, all funds, if any, held in escrow by the Escrow
Agent, less the sum of (i) Merger Cash paid into escrow by Oak
pursuant to Section 2.5.2.2 of the Plan of Reorganization with
respect to any Private Warrant that has not been exercised and has
not otherwise terminated ("Unexpired Private Warrant"), (ii)
Contingent Cash paid into escrow by Oak pursuant to Section 2.6.1.2
of the Plan of Reorganization with respect to any Unexpired Private
Warrant and (iii) any exercise price amounts held in escrow and
required to be delivered to Oak pursuant to the Escrow Agreement.
5.3 Contingent Cash Funds. Pursuant to the Plan of
Reorganization, including Section 2.6 thereof, Oak shall deliver to
the Exchange Agent, commencing with the calendar quarter ended June
30, 1999, an amount equal to the amount of Contingent Cash, if any,
due by Oak for such calendar quarter in accordance with Section 2 of
the Plan of Reorganization, subject to any adjustments provided for
in Sections 9 and 10 of the Plan of Reorganization, and less any
amount required to be delivered to the Escrow Agent by Oak pursuant
to Section 2.6.1.2 of the Plan of Reorganization. Oak shall deduct
from such amount, an amount equal to Merger Cash multiplied by the
total number of shares of XLI Stock (on an as converted basis) held
by Dissenting Stockholders, such amount to be retained by Oak.
Quarterly amounts, if any, payable by Oak to the Exchange Agent
pursuant to the Plan of Reorganization and this Section 5.3 shall be
delivered by Oak to the Exchange Agent at least five (5) business
days prior to any distribution required to be made to the XLI
Stockholders by the Exchange Agent under this Exchange Agreement.
5.4 Final Escrow Funds. Pursuant to the Plan of
Reorganization, including Section 2.7.3 thereof, and Section 4.3 of
the Escrow Agreement, the Escrow Agent shall deliver to the Exchange
Agent, promptly following termination of the Escrow Agreement, all
funds, if any, remaining in escrow upon termination of the Escrow
Agreement, less any exercise price amounts required to be delivered
to Oak pursuant to the Escrow Agreement.
5.5 Excess Exercise Price Amounts. Pursuant to the Plan
of Reorganization, including Section 2.7.4 thereof, Oak shall deliver
to the Exchange Agent, promptly following termination of the Escrow
Agreement, the amount, if any, by which the aggregate exercise price
paid to Oak in connection with any exercise of XLI Warrants under the
Escrow Agreement, net of amounts, if any, of Merger Cash payable with
respect to any XLI Warrant (other than a Private Warrant) upon
exercise of such XLI Warrant, exceeds the aggregate costs and
expenses incurred by Oak in connection with the Escrow Agreement and
the Exchange Agreement, including all costs and expenses that Oak
reasonably expects to incur prior to and in connection with
termination of the Exchange Agreement.
6. Determination of Merger Cash and Contingent Cash Amounts.
Within one business day following the Effective Date, Oak and the
Stockholder Representatives shall provide joint written notice to the
Exchange Agent of the per share determination of Merger Cash, as
calculated in accordance with the provisions of Section 2.4.3 of the
Plan of Reorganization. Within forty-five (45) days after the close
of each calendar quarter, Oak and the Stockholder Representatives
shall provide joint written notice to the Exchange Agent of the per
share determination of Contingent Cash as of the end of such calendar
quarter, calculated in accordance with the provisions of Section
2.4.4 of the Plan of Reorganization. Oak and the Stockholder
Representatives agree to provide to the Exchange Agent such other
Merger Cash and Contingent Cash calculations as are reasonably
requested by the Exchange Agent in order to fulfill its duties
hereunder.
7. Payment for Shares of XLI Stock.
7.1 Distribution of Merger Cash Funds. The Exchange
Agent, upon receipt of Certificates, accompanied by duly executed
letters of transmittal, shall make payments of Merger Cash in respect
of such shares (on an as converted basis in the case of any shares of
XLI Preferred Stock outstanding at the Effective Time) by issuance of
its check. The Exchange Agent agrees to pay on presentment all
checks so issued by it until the expiration of this Exchange
Agreement.
7.2 Distribution of Funds Other Than Merger Cash Funds.
Funds delivered to the Exchange Agent by Oak or the Escrow Agent
pursuant to Sections 5.2, 5.3, 5.4 or 5.5 of this Exchange Agreement
shall be allocated by the Exchange Agent pro rata (a) to all
outstanding shares of XLI Common Stock held by XLI Stockholders at
the Effective Time (excluding any shares of XLI Common Stock into
which shares of XLI Preferred Stock were convertible at the Effective
Time), (b) all shares of XLI Preferred Stock held by XLI Stockholders
at the Effective Time, on an as converted basis, and (c) all shares
of XLI Common Stock (including shares of XLI Common Stock into which
shares of XLI Preferred Stock, that were issued upon exercise of the
Underwriter's Warrant, were converted) attributable to XLI Warrants
exercised after the Effective Time and prior to the end of the
calendar quarter for which such payment is being made. Any amount
delivered to the Exchange Agent pursuant to Sections 5.2 or 5.3 shall
be distributed by the Exchange Agent to the XLI Stockholders not
later than forty-five (45) days after the close of the calendar
quarter to which the distribution relates; any amount delivered to
the Exchange Agent pursuant to Section 5.4 shall be distributed by
the Exchange Agent to the XLI Stockholders not later than fifteen
(15) business days following delivery of such amount to the Exchange
Agent; any amount delivered pursuant to the Exchange Agent pursuant
to Section 5.5 shall be distributed by the Exchange Agent to the XLI
Stockholders not later than thirty (30) business days following
delivery of such amount to the Exchange Agent. Any amounts payable
by the Exchange Agent to the XLI Stockholders pursuant to this
Exchange Agreement shall be deposited by the Exchange Agent in the
United States mail, first class postage prepaid, to the addresses as
set forth in the stock and warrant records of XLI delivered to the
Exchange Agent pursuant to Sections 4 and 6.1 of this Exchange
Agreement. The Exchange Agent shall make payments of the amounts
provided for in this Section 7.2 by issuance of its check. The
Exchange Agent agrees to pay on presentment all checks so issued by
it until the expiration of this Exchange Agreement.
7.3 Lost, Stolen or Destroyed Certificates. In the
event any Certificate shall have been lost, stolen or destroyed, upon
the making of any affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed, and upon delivery of a
bond in such sum as the Exchange Agent may reasonably direct, as
indemnity against any claim that may be made against the Exchange
Agent with respect to the Certificate alleged to have been lost, the
Exchange Agent will issue the consideration as provided in this
Section 7 in exchange for such lost, stolen or destroyed Certificate.
7.4 Abandoned Property. Notwithstanding anything to the
contrary contained in this Section 7 or elsewhere is this Exchange
Agreement, neither the Exchange Agent nor any other party to this
Exchange Agreement shall be liable to any holder of the capital stock
of XLI, including any holder of an XLI Warrant who has exercised all
or a portion of such XLI Warrant, for any amount properly paid to a
public official pursuant to any applicable abandoned property,
escheat or similar law.
8. Actions and Instructions of Stockholder Representatives.
Any action required to be taken, or notice or instructions required
to be given, to the Exchange Agent or Oak under this Exchange
Agreement may be taken or given by a majority of the Stockholder
Representatives; provided, however, that less than a majority of the
Stockholder Representatives may take such action or give such notice
or instructions upon delivery to the Exchange Agent and Oak of a
notice signed by a majority of the Stockholder Representatives
stating that any action may be taken and any notice or instructions
may be given to the Exchange Agent and Oak by the number of
Stockholder Representatives specified in such notice. If for any
reason there is only one Stockholder Representative at any time, then
the Exchange Agent and Oak shall be entitled to rely on any action
taken by, or notice or instructions given by, such Stockholder
Representative. Written notice of any resignation or removal of a
Stockholder Representative, or any appointment of a successor
Stockholder Representative, shall be promptly provided to the
Exchange Agent and Oak.
9. Indemnification. The Exchange Agent shall be indemnified
and held harmless by Oak from and against any and all reasonable
expenses, including reasonable counsel fees and disbursements, or
losses suffered by the Exchange Agent hereunder, provided, however,
that the Exchange Agent shall not be indemnified and held harmless
with respect to such expenses or losses which result from or arise
out of the Exchange Agent's gross negligence, misconduct or bad
faith. Promptly after the receipt by the Exchange Agent of notice of
any demand or claim or the commencement of any action, suit,
proceeding or investigation, the Exchange Agent shall, if a claim in
respect thereof is to be made against Oak, notify Oak in writing.
Oak shall be entitled to participate in the defense of any such claim
or legal action or proceeding, and, if it so elects at any time after
receipt of such notice, it may assume the defense of any suit brought
to enforce any such claim or of any other legal action or proceeding.
For the purposes hereof, the term "expense or loss" means any amount
paid or payable to satisfy any claim, demand, action, suit or
proceeding settled with the express written consent of Oak, and all
reasonable costs and expenses, including, but not limited to,
reasonable counsel fees and disbursements, paid or incurred in
investigating or defending against any such claim, demand, action,
suit, proceeding or investigation.
10. Compensation of Exchange Agent. The Exchange Agent shall
be entitled to a fee which shall be paid by Oak on presentation of
monthly invoices for all services rendered by it hereunder as
referenced in Exhibit "A" hereto. The Exchange Agent shall also be
entitled to reimbursement from Oak for all reasonable expenses paid
or incurred by it in the administration of its duties hereunder,
including, but not limited to, all reasonable services rendered in
performing this Exchange Agreement.
11. Further Assurance. From time-to-time and after the date
hereof, Oak and the Stockholder Representatives shall deliver or
cause to be delivered to the Exchange Agent such further documents
and instruments and shall do and cause to be done such further acts
as the Exchange Agent shall reasonably request (it being understood
that the Exchange Agent shall have no obligation to make any such
request) to carry out more effectively the provisions and purposes of
this Exchange Agreement, to evidence compliance herewith or to assure
itself that it is protected in acting hereunder.
12. Consents to Service of Process. Each of the parties
hereto hereby irrevocably consents to the jurisdiction of the courts
of the Commonwealth of Massachusetts and of any Federal Court located
in such Commonwealth, each as may have competent jurisdiction, in
connection with any action, suit or other proceeding arising out of
or relating to this Exchange Agreement or any action taken or omitted
hereunder and waives personal service of any summons, complaint or
other process and agrees that the service thereof may be made by
certified or registered mail directed to such person at such person's
address for purposes of notice hereunder.
13. Term. The term of this Exchange Agreement shall be until
the first to occur of (a) the payment of all amounts required to be
distributed under Section 7 of this Exchange Agreement or (b) the
termination of the Exchange Agent's appointment by written notice
from Oak to the Exchange Agent or from the Exchange Agent to Oak
subject to the review time set forth in Exhibit "A". Notwithstanding
anything to the contrary contained in this Exchange Agreement, this
Exchange Agreement shall terminate no later than June 30, 2001.
14. Counterparts. This Exchange Agreement may be executed in
one or more counterparts, each one of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.
15. Applicable Law. This Exchange Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
16. Miscellaneous. All amounts referred to herein are
expressed in United States Dollars and all payments by the Exchange
Agent hereunder shall be made in such dollars. This Exchange
Agreement and the rights and obligations hereunder may not be
assigned by the Exchange Agent without Oak's prior written consent.
This Exchange Agreement shall be binding upon and inure to the
benefit of each party's respective successors, heirs and permitted
assigns. No other person shall acquire or have any rights under or
by virtue of this Exchange Agreement. This Exchange Agreement may
not be changed orally or modified, amended or supplemented without an
express written agreement executed by Oak and the Exchange Agent;
provided, however, that any modification, amendment or supplement to
this Exchange Agreement that affects the rights or obligations of the
Stockholder Representatives under this Exchange Agreement shall
require the express written agreement of the Stockholder
Representatives or such lesser number of Stockholder Representatives
as is permitted under Section 8 of this Exchange Agreement. This
Exchange Agreement is intended to be for the sole benefit of the
parties hereto, and their respective successors, heirs and permitted
assigns, and none of the provisions of this Exchange Agreement are
intended to be, nor shall they be construed to be, for the benefit of
any third person.
17. Concerning the Exchange Agent.
17.1 In the event that the Exchange Agent should at any
time be confronted with inconsistent claims or demands by the parties
hereto, the Exchange Agent shall have the right to interplead said
parties in any court of competent jurisdiction and request that such
court determine such respective rights of the parties with respect to
this Exchange Agreement and upon doing so, the Exchange Agent
automatically shall be released from any obligations or liability as
a consequence of any such claims or demands.
17.2 The Exchange Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either
directly or by or through its agents or attorneys. The Exchange
Agent shall not be responsible for, and shall not be under a duty to,
examine into or pass upon the validity, binding effect, execution or
sufficiency of this Exchange Agreement or of any agreement amendatory
or supplemental hereto.
17.3 The Exchange Agent may act upon any instrument or
other writing believed by it in good faith to be genuine and to have
been signed or presented by the proper person and shall not be liable
to any party hereto in connection with the performance of its duties
hereunder except for its own gross negligence, misconduct or bad
faith. The Exchange Agent's duties shall be determined only with
reference to this Exchange Agreement and applicable laws and the
Exchange Agent is not charged with knowledge of or any duties or
responsibilities in connection with any other document or agreement
except as otherwise provided in this Exchange Agreement, including,
without limitation, Section 2 hereof, or in the Escrow Agreement. If
in doubt as to its duties and responsibilities hereunder, the
Exchange Agent may consult with counsel if its choice and shall be
protected in any action taken or omitted in connection with the
advice or opinion of such counsel.
17.4 The Exchange Agent shall have the right at any time
to resign hereunder by giving written notice of its resignation to
the parties hereto at the addresses set forth herein or at such other
address as the parties shall provide, at least ten (10) business days
prior to the date specified for such resignation to take effect.
Upon the effective date of any such resignation, all cash and other
payments and all other property then held by the Exchange Agent
hereunder shall be delivered by it to such successor agent or as
otherwise shall be designated in writing by the parties hereto.
18. Notices. Whenever any party hereto desires or is required
to give any notice, demand or request with respect to this agreement,
each such communication shall be in writing and shall be given or
made by telecopy, telegraph, cable, mail or other delivery and
telecopied, telegraphed, cabled, mailed or delivered to the intended
recipient at the addresses specified below:
If to Oak: Oak Technology, Inc.
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Morosoli & Maser LLP
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Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholder c/o Xerographic Laser Images
Representatives: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Warner & ▇▇▇▇▇▇▇▇▇ LLP
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Exchange Agent: State Street Bank and Trust Company
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Mail Stop 45-02-71
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Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Except as may be otherwise provided elsewhere in this Exchange
Agreement, all such communications shall be deemed to have been duly
given when transmitted by telecopier with verified receipt by the
receiving telecopier, when delivered to the telegraph or cable
office, when personally delivered, or in the case of a mailed notice,
five (5) days after being deposited in the United States certified or
registered mail, postage prepaid. Any party may change its address
for such communications by giving notice thereof to the other parties
in conformance with this Section 18 (Notices).
19. XLI Warrant Exercises. The Exchange Agent hereby acknowledges
and agrees that its duties with respect to the exercise of any XLI
Warrants after the Effective Date shall be governed by the terms of
Section 4 of the Escrow Agreement. Subject to the provisions set
forth in the Escrow Agreement, the Exchange Agent further agrees to
promptly distribute to any holder of an XLI Warrant who exercises
such XLI Warrant any Merger Cash or Contingent Cash funds received by
the Exchange Agent in connection with such XLI Warrant exercise.
IN WITNESS WHEREOF, the parties hereto have caused this Exchange
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the day and year first above written.
OAK TECHNOLOGY, INC. STATE STREET BANK AND TRUST COMPANY
By:__________________________ By:________________________________
Its:_________________________ Its:_______________________________
STOCKHOLDER REPRESENTATIVES:
_____________________________ ___________________________
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____________________________ ___________________________
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____________________________
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