Common Stock And Warrant Purchase Agreement - Phoenix Technologies Ltd. and Intel Corp.
PHOENIX TECHNOLOGIES LTD.
COMMON STOCK AND WARRANT
PURCHASE AGREEMENT
This Common Stock And Warrant Purchase Agreement (this "AGREEMENT") is
made and entered into as of December 18, 1995 by and between Phoenix
Technologies Ltd., a Delaware corporation (the "COMPANY"), and Intel
Corporation, a Delaware corporation (the "INVESTOR").
R E C I T A L
WHEREAS, the Company desires to sell to the Investor, and the Investor
desires to purchase from the Company, shares of the Company's Common Stock
and a Warrant to purchase additional shares of the Company's Common Stock on
the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing recital, the mutual
promises hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
1.1 AUTHORIZATION. As of the Closing (as defined below) the Company's
Board of Directors will have authorized the issuance, pursuant to the terms
and conditions of this Agreement, of up to 1,968,936 shares of the Company's
Common Stock, $0.001 par value (the "COMMON STOCK").
1.2 AGREEMENT TO PURCHASE AND SELL COMMON STOCK. The Company hereby
agrees to sell to the Investor at the Closing, and the Investor agrees to
purchase from the Company at the Closing, 894,971 shares of Common Stock at a
price per share equal to the Per Share Purchase Price. The shares of Common
Stock purchased and sold pursuant to this Agreement will be collectively
hereinafter referred to as the "PURCHASED SHARES."
1.3 PER SHARE PURCHASE PRICE. The "PER SHARE PURCHASE PRICE" shall
mean the average closing price of the Company's Common Stock as publicly
reported for the Nasdaq National Market as of 4:00 p.m. Eastern Time over the
thirty (30) trading days immediately preceding the earliest to occur of (a)
the Closing, (b) the date of a public announcement of this investment by
Investor in the Company, or (c) the date that the potential investment by
Investor in the Company becomes known to the public.
1.4 AGREEMENT TO PURCHASE AND SELL WARRANT. The Company hereby agrees
to sell to the Investor at the Closing, and the Investor agrees to purchase
from the Company at the Closing, a Warrant (the "WARRANT") in the form
attached hereto as EXHIBIT A to purchase from the Company up to 1,073,965
shares of Common Stock (the number of Purchased Shares multiplied by 1.2), at
a purchase price for the Warrant equal to $354,408.45, or $0.33 per share of
Common Stock purchasable thereunder. The shares of Common Stock purchasable
upon exercise of the Warrant will be collectively hereinafter referred to as
the "WARRANT SHARES."
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2. CLOSING.
2.1 THE CLOSING. The purchase and sale of the Purchased Shares and
the Warrant will take place at the offices of Fenwick & West, Two Palo Alto
Square, Suite 300, Palo Alto, California, at 2:00 p.m. California time, on
February 16, 1996 or at such other time and place as the Company and the
Investor mutually agree upon (which time and place are referred to in this
Agreement as the "CLOSING"). At the Closing, the Company will deliver to the
Investor the Warrant and a certificate representing the Purchased Shares, all
against delivery to the Company by the Investor of the full purchase price of
the Warrant and the Purchased Shares, paid by a check payable to the
Company's order, or wire transfer of funds to the Company, or by any
combination of the foregoing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that the statements in this Section 3
are true and correct, except as set forth in the Schedule of Exceptions (the
"SCHEDULE OF EXCEPTIONS") attached to this Agreement as EXHIBIT B:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all corporate power and authority
required to (a) carry on its business as presently conducted, and (b) enter
into this Agreement, the Investor Rights Agreement (as defined in Section
5.7) and the Warrant and to consummate the transactions contemplated hereby
and thereby. The Company is qualified to do business and is in good standing
in each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect. As used in this Agreement, "MATERIAL ADVERSE EFFECT" means
a material adverse effect on, or a material adverse change in, or a group of
such effects on or changes in, the operations, financial condition, results
of operations, prospects, assets or liabilities of the Company.
3.2 CAPITALIZATION. As of the date of this Agreement the
capitalization of the Company is as follows:
(a) PREFERRED STOCK. A total of 500,000 authorized shares
of Preferred Stock, $0.01 par value per share (the "PREFERRED STOCK"), none of
which are issued or outstanding.
(b) COMMON STOCK. A total of 20,000,000 authorized shares of
Common Stock, $0.001 par value, of which 14,021,227 shares are issued and
outstanding. All of such outstanding shares are validly issued, fully paid
and non-assessable. No such outstanding shares were issued in violation of
any preemptive right.
(c) OPTIONS, WARRANTS, RESERVED SHARES. Except for the 3,487,805
shares of Common Stock reserved for issuance under the Company's 1986
Incentive Stock Option Plan, Senior Management Stock Option Plan, Senior
Management Non-Qualified Stock Option Plan, 1990 Directors Stock Option Plan,
1992 Equity Incentive Plan, 1994 Equity Incentive Plan and 1991 Employee Stock
Purchase Plan, each as amended (the "PLANS"), there are not outstanding any
options, warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from the Company of any shares of
its capital stock or
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any securities convertible into or ultimately
exchangeable or exercisable for any shares of the Company's capital stock.
Except for any stock repurchase rights of the Company under the Plans, no
shares of the Company's outstanding capital stock, or stock issuable upon
exercise, conversion or exchange of any outstanding options, warrants or
rights, or other stock issuable by the Company, are subject to any rights of
first refusal or other rights to purchase such stock (whether in favor of the
Company or any other person), pursuant to any agreement or commitment of the
Company.
3.3 SUBSIDIARIES. The Company does not presently own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity.
3.4 DUE AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution, delivery of, and the performance of all obligations
of the Company under, this Agreement, the Investor Rights Agreement (as
defined below), and the Warrant and the authorization, issuance, reservation
for issuance and delivery of all of the Purchased Shares being sold under
this Agreement and of the Warrant Shares has been taken or will be taken prior
to the Closing, and this Agreement constitutes, and the Investor Rights
Agreement and the Warrant when executed, will constitute, valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or others laws of
general application relating to or affecting the enforcement of creditors'
rights generally and (ii) the
effect of rules of law governing the availability of equitable remedies.
3.5 VALID ISSUANCE OF STOCK.
(a) The Purchased Shares, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration provided for
herein, will be duly and validly issued, fully paid and nonassessable. The
Warrant Shares have been duly and validly reserved for issuance and, upon
issuance, sale and delivery in accordance with the terms of the Warrant for
the consideration provided for therein, will be duly and validly issued, fully
paid and nonassessable.
(b) Based in part on the representations made by the Investors in
Section 4 hereof, the Purchased Shares, the Warrant and (assuming no change in
applicable law and no unlawful distribution of Purchased Shares or the
Warrant by the Investor or other parties) the Warrant Shares will be issued
in full compliance with the registration and prospectus delivery requirements
of the Securities Act of 1933, as amended (the "1933 ACT"), or in
compliance with applicable exemptions therefrom, and the registration and
qualification requirements of all applicable securities laws of the States of
the United States (provided that, with respect to the Warrant Shares, no
commission or other remuneration is paid or given, directly or indirectly,
for soliciting the issuance of the Warrant Shares upon the exercise of the
Warrant).
3.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part
of the Company is required in connection with the
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consummation of the transactions
contemplated by this Agreement, except for the filing of such qualifications
or filings under the 1933 Act and the regulations thereunder and all
applicable state securities laws as may be required in connection with the
transactions contemplated by this Agreement. All such qualifications and
filings will, in the case of qualifications, be effective on the Closing and
will, in the case of filings, be made within the time prescribed by law.
3.7 NON-CONTRAVENTION. The execution, delivery and performance of
this Agreement, the Investor Rights Agreement and the Warrant by the Company,
and the consummation by the Company of the transactions contemplated hereby
and thereby, do not and will not (i) contravene or conflict with the
Certificate of Incorporation or Bylaws of the Company; (ii) constitute a
material violation of any provision of any federal, state, local or foreign
law binding upon or applicable to the Company; or (iii) constitute a default
under, give rise to any right of termination, cancellation or acceleration
of, or to a loss of any material benefit to which the Company is entitled
under, or result in the creation or imposition of any lien, claim or
encumbrance on any material assets of the Company under any material contract
to which the Company is a party or any material permit, license or similar
right relating to the Company or by which the Company may be bound or
materially affected.
3.8 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation ("ACTION") pending : (a) against the Company,
its activities, properties or assets or, to the best of the Company's
knowledge, against any officer, director or employee of the Company in
connection with such officer's, director's or employee's relationship with,
or actions taken on behalf of, the Company, (b) that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Agreement, the
Investor Rights Agreement or the Warrant. To the best of the Company's
knowledge there is no Action pending or currently threatened, or any basis
therefor, relating to the current or prior employment of any of the Company's
current or former employees or consultants, their use in connection with the
Company's business of any information, technology or techniques allegedly
proprietary to any of their former employers, clients or other parties, or
their obligations under any agreements with prior employers, clients or other
parties. The Company is not a party to or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency
or instrumentality and there is no Action by the Company currently pending or
which the Company intends to initiate.
3.9 INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT. Each employee
and consultant or independent contractor of the Company whose duties include
the development of products or Intellectual Property (as defined below), and
each former employee and consultant or independent contractor whose duties
included the development of Phoenix Products as such term is defined in the
Technology Agreement, has entered into and executed an Invention Assignment
and Confidentiality Agreement substantially in the form attached to this
Agreement as EXHIBIT C or an employment or consulting agreement containing
substantially similar terms.
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3.10 INTELLECTUAL PROPERTY.
(a) OWNERSHIP OR RIGHT TO USE. The Company has sole title to
and owns, or is licensed or otherwise possesses legally enforceable
rights to use, all patents or patent applications, software, know-how,
registered or unregistered trademarks and service marks and any applications
therefor, registered or unregistered copyrights, trade names, and any
applications therefor, trade secrets or other confidential or proprietary
information ("INTELLECTUAL PROPERTY") necessary to enable the Company to carry
on its business as currently conducted. To the best of the Company's
knowledge, no third party has any ownership right in, title to, or lien on
any Intellectual Property of the Company licensed under the Technology
Agreement. The Company represents and warrants that it will use reasonable
business efforts to seek Copyright registration and other intellectual
property protection for Intellectual Property of the Company.
(b) LICENSES; OTHER AGREEMENTS. The Company is not currently
subject to any exclusive licenses (whether such exclusivity is temporary or
permanent) to any Intellectual Property of the Company. To the best of the
Company's knowledge, there are not outstanding any licenses or agreements of
any kind relating to any Intellectual Property of the Company, except for
agreements with OEM's and other customers of the Company entered into in the
ordinary course of the Company's business. The Company is not obligated to
pay any royalties or other payments to third parties with respect to the
marketing, sale, distribution, manufacture, license or use of any
Intellectual Property, except as the Company may be so obligated in the
ordinary course of its business or as disclosed in the Company's SEC
Documents (as defined below).
(c) NO INFRINGEMENT. To the best of the Company's knowledge, the
Company has not violated or infringed, and is not currently violating or
infringing, and the Company has not received any communications alleging that
the Company (or any of its employees or consultants) has violated or
infringed any Intellectual Property of any other person or entity, to the
extent that any such violation or infringement, either individually or
together with all other such violations and infringements, would have a
Material Adverse Effect.
(d) EMPLOYEES AND CONSULTANTS. To the best knowledge of the
Company, no employee of or consultant to the Company is in default under any
term of any employment contract, agreement or arrangement relating to
Intellectual Property of the Company or any non-competition arrangement,
other contract, or any restrictive covenant relating to the Intellectual
Property of the Company. To the best knowledge of the Company, the
Intellectual Property of the Company was developed entirely by the employees
of or consultants to the Company during the time they were employed or retained
by the Company and, to the Company's knowledge, at no time during conception
or reduction to practice of the Intellectual Property of the Company were any
such employees or consultants operating under any grant from a government
entity or agency or subject to any employment agreement or invention
assignment or non-disclosure agreement or any other obligation with a
third party that would adversely affect the Company's rights in the
Intellectual Property of the Company. To the best knowledge of the Company,
such Intellectual Property of the Company does not include any invention or
other intellectual property of such employees or consultants made prior to
the time such employees or consultants were employed or retained by the
Company, nor any intellectual
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property of any previous employer of such
employees or consultants nor the intellectual property of any other person
or entity.
3.11 COMPLIANCE WITH LAW AND CHARTER DOCUMENTS. The Company is not in
violation or default of any provisions of its Certificate of Incorporation or
Bylaws, both as amended, and except for any violations that would not, either
individually or in the aggregate, have a Material Adverse Effect, the Company
has complied and is in compliance with all applicable statutes, laws,
regulations and executive orders of the United States of America and all
states, foreign countries or other governmental bodies and agencies having
jurisdiction over the Company's business or properties.
3.12 REGISTRATION RIGHTS. Except as provided in the Investor Rights
Agreement effective upon the Closing, the Company is not currently subject to
any grant or agreement to grant to any person or entity any rights (including
piggyback registration rights) to have any securities of the Company
registered with the United States Securities and Exchange Commission
("SEC") or any other governmental authority.
3.13 TITLE TO PROPERTY AND ASSETS. The properties and assets the Company
owns are owned by the Company free and clear of all mortgages, deeds of
trust, liens, encumbrances and security interests except for statutory liens
for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the
Company. With respect to the property and assets it leases, the Company is
in compliance with such leases in all material respects.
3.14 SEC DOCUMENTS.
(a) The Company has furnished to the Investor prior to the date
hereof copies of its Annual Report on Form 10-K for the fiscal year ended
September 30, 1994 ("FORM 10-K"), and all other registration statements,
reports and proxy statements filed by the Company with the Securities and
Exchange Commission ("COMMISSION") on or after September 30, 1994, including,
but not limited to, its Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1994, March 31, 1995 and June 30, 1995 (the Form 10-K, such
Forms 10-Q, and such registration statements, reports and proxy statements,
are collectively referred to herein as the "SEC DOCUMENTS"). Each of the
SEC Documents, as of the respective date thereof, does not, and each of the
registration statements, reports and proxy statements filed by the Company
with the Commission after the date hereof and prior to the Closing will not,
as of the date thereof, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The Company is not a party to any material contract, agreement
or other arrangement required to be filed as an exhibit to the SEC Documents
that is not so filed.
(b) The Company has provided the Investor with its audited
financial statements (the "AUDITED FINANCIAL STATEMENTS") for the fiscal
year ended September 30, 1995 (the "BALANCE SHEET DATE"). Since September 30,
1994, the Company has duly filed with the Commission all registration
statements, reports and proxy statements required to be filed by it under
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
the 1933 Act.
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The audited and unaudited consolidated financial statements of the Company
included in the SEC Documents filed prior to the date hereof fairly present,
in conformity with generally accepted accounting principles ("GAAP")
(except as permitted by Form 10-Q) applied on a consistent basis (except as
may be indicated in the notes thereto) the consolidated financial position of
the Company and its consolidated subsidiaries as at the date thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject to normal year and audit adjustments in the case of unaudited
interim financial statements).
(c) Except as and to the extent reflected or reserved against in
the Company's Audited Financial Statements (including the notes thereto), to
the best knowledge of the Company, the Company has no material liabilities
(whether accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined or determinable) other than: (i) liabilities incurred
in the ordinary course of business since the Balance Sheet Date that are
consistent with the Company's past practices, (ii) liabilities with respect
to agreements to which the Investor is a party, (iii) other liabilities that
either individually or in the aggregate, would not result in a Material
Adverse Effect, and (iv) all contingent liabilities other than contingent
liabilities that the officers of the Company presently have a reasonable
basis for believing have a reasonable prospect of occurring.
3.15 ABSENCE OF CERTAIN CHANGES SINCE BALANCE SHEET DATE. Since the
Balance Sheet Date, the business and operations of the Company have been
conducted in the ordinary course consistent with past practice, and there has
not been:
(a) any declaration setting aside or payment of any dividend or
other distribution of the assets of the Company with respect to any shares of
capital stock of the Company, or any repurchase, redemption or other
acquisition by the Company or any subsidiary of the Company of any
outstanding shares of the Company's capital stock;
(b) any damage, destruction or loss, whether or not covered by
insurance, except for such occurrences that have not resulted, and are not
expected to result, in a Material Adverse Effect;
(c) any waiver by the Company of a valuable right or of a
material debt owed to it, except for such waivers that have not resulted, and
are not expected to result, in a Material Adverse Effect;
(d) any material change or amendment to, or any waiver of any
material rights under, a material contract or arrangement by which the Company
or any of its assets or properties is bound or subject, except for changes,
amendments, or waivers which are expressly provided for or disclosed in this
Agreement or that have not resulted, and are not expected to result, in a
Material Adverse Effect;
(e) any change by the Company in its accounting principles,
methods or practices or in the manner it keeps its accounting books and
records, except any such change required by a change in GAAP; and
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(f) to the Company's knowledge, any other event or condition of
any character, except for such events and conditions that have not resulted,
and are not expected to result, in a Material Adverse Effect.
3.16 EMPLOYEE BENEFITS.
(a) As used in this Section 3.16, the following terms have the
following meanings: (1) "BENEFIT ARRANGEMENT" means any material benefit
arrangement that is not an Employee Benefit Plan, including (i) each material
employment or consulting agreement, (ii) each material arrangement providing
for insurance coverage or workers' compensation benefits, (iii) each material
bonus or deferred bonus arrangement, (iv) each material arrangement providing
any termination allowance, severance or similar benefits, (v) each equity
compensation plan, (vi) each deferred compensation plan and (vii) each material
compensation policy and practice maintained by the Company covering the
employees, former employees, officers, former officers, directors and former
directors of the Company, and the beneficiaries of any of them; (2) "BENEFIT
PLAN" means an Employee Benefit Plan or Benefit Arrangement; (3) "COBRA"
means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
as set forth in Section 4980B of the Code and Part 6 of Title I of ERISA; (4)
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan, as defined in
Section 3(3) of ERISA, that is sponsored or contributed to by the Company or
any ERISA Affiliate covering employees or former employees of the Company; (5)
"EMPLOYEE PENSION BENEFIT PLAN" means any employee pension benefit plan, as
defined in Section 3(2) of ERISA, that is regulated under Title IV of ERISA,
other than a Multiemployer Plan; (6) "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended; (7) "ERISA AFFILIATE" of the Company
means any other person or entity that, together with the Company as of the
relevant measuring date under ERISA, was or is required to be treated as a
single employer under Section 414 of the Code; (8) "GROUP HEALTH PLAN" means
any group health plan, as defined in Section 5000(b)(1) of the Code; (9)
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section 3(37)
and 4001(a)(3) of ERISA; and (10) "PROHIBITED TRANSACTION" means a
transaction that is prohibited under Section 4975 of the Code or Section 406 of
ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA,
respectively.
(b) Neither the Company nor any of its ERISA Affiliates sponsors
or has sponsored, maintained, contributed to, or incurred an obligation to
contribute to, any Employee Pension Benefit Plan (whether or not terminated).
Neither the Company nor any of its ERISA Affiliates sponsors or has sponsored,
maintained, contributed to, or incurred an obligation to contribute to, any
Multiemployer Plan (whether or not terminated).
(c) No Employee Benefit Plan has participated in, engaged in or
been a party to any Prohibited Transaction, and neither the Company nor any of
its ERISA Affiliates has had asserted against it any claim for any material tax
or material penalty imposed under ERISA or the Code with respect to any
Employee Benefit Plan nor, to the best of the Company's knowledge, is there a
basis for any such claim. To the best knowledge of the Company, no officer,
director or employee of the Company has committed a material breach of any
responsibility or obligation imposed upon fiduciaries by Title I of ERISA with
respect to any Employee Benefit Plan, with respect to which breach the Company
is directly or indirectly liable.
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(d) Other than routine claims for benefits, there is no material
claim pending involving any Benefit Plan by any Person against such plan or the
Company or any ERISA Affiliate, nor, to the best of the Company's knowledge, is
any such material claim threatened. There is no pending, or to the best of the
Company's knowledge, threatened Proceeding involving any Employee Benefit Plan
before the IRS, the United States Department of Labor or any other governmental
authority.
(e) No material violation of any reporting or disclosure
requirement imposed by ERISA or the Code exists with respect to any Employee
Benefit Plan.
(f) Each Benefit Plan has been maintained in all material
respects, by its terms and in operation, in accordance with ERISA (if
applicable), the Code and all other applicable federal, state, local and
foreign laws. The Company and its ERISA Affiliates have made full and timely
payment of all amounts required to be (i) contributed under the terms of each
Benefit Plan and such laws, or (ii) required to be paid as expenses under such
Benefit Plan. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code either has received a favorable determination
letter with respect to such qualified status from the IRS or has filed a
request for such a determination letter with the IRS within the remedial
amendment period such that such determination of qualified status will apply
from and after the effective date of any such Employee Benefit Plan.
(g) With respect to any Group Health Plans maintained by the
Company or its ERISA Affiliates, whether or not for the benefit of the
Company's employees, the Company and its ERISA Affiliates have complied in all
material respects with the provisions of COBRA.
(h) Except pursuant to the provisions of COBRA, neither the
Company nor any ERISA Affiliate maintains any Employee Benefit Plan that
provides benefits described in Section 3(1) of ERISA to any former employees or
retirees, or the beneficiaries of any of them, of the Company or its ERISA
Affiliates.
3.17 TAX MATTERS.
(a) All deficiencies asserted or assessments made as a result of
any examinations by the Internal Revenue Service or any state, local or foreign
taxing authority have been fully paid, or are fully reflected as a liability in
the Audited Financial Statements. The Company has filed on a timely basis all
Tax Returns required to have been filed by it and has paid on a timely basis
all Taxes required to be shown thereon as due. All such Tax Returns are true,
complete and correct in all material respects. The provisions for taxes in the
Audited Financial Statements have been determined in accordance with GAAP. No
liability for Taxes has been incurred by the Company since the Balance Sheet
Date other than in the ordinary course of its business. No director, officer
or employee of the Company having responsibility for Tax matters has reason to
believe that any Taxing authority has valid grounds to claim or assess any
additional Tax with respect to the Company in excess of the amounts shown in
the Audited Financial Statements for the periods covered thereby. As used in
this Agreement, (1) "TAXES" means (x) all federal, state, local and other net
income, gross income, gross receipts, sales, use, ad valorem, value added,
intangible, unitary, capital gain, transfer, franchise, profits, license,
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lease, service, service use, withholding, backup withholding, payroll,
employment, estimated, excise, severance, stamp, occupation, premium, property,
prohibited transactions, windfall or excess profits, customs, duties or other
taxes, fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts with respect
thereto, (y) any liability for payment of amounts described in clause (x)
whether as a result of transferee liability, of being a member of an
affiliated, consolidated, combined or unitary group for any period, or
otherwise through operation of law and (z) any liability for the payment of
amounts described in clauses (x) or (y) as a result of any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied agreement
to indemnify any other person for Taxes; and the term "TAX" means any one of
the foregoing Taxes; and (2) "TAX RETURNS" means all returns, reports, forms or
other information required to be filed with respect to any Tax.
(b) With respect to all amounts in respect of Taxes imposed upon
the Company, or for which the Company is or could be liable, whether to taxing
authorities (as, for example, under law) or to other persons or entities (as,
for example, under tax allocation agreements), and with respect to all taxable
periods or portions of periods ending on or before the Closing Date, all
applicable Tax laws and agreements have been fully complied with, and all such
amounts required to be paid by the Company to taxing authorities or others have
been paid.
(c) The Company has not received notice that the Internal Revenue
Service or any other taxing authority has asserted against the Company any
deficiency or claim for additional Taxes in connection with any Tax Return, and
no issues have been raised (and are currently pending) by any taxing authority
in connection with any Tax Return. The Company has not received notice that it
is or may be subject to Tax in a jurisdiction in which it has not filed or does
not currently file Tax Returns.
3.18 LABOR AGREEMENTS AND ACTIONS.
(a) No collective bargaining agreement exists that is binding on
the Company, and no petition has been filed or proceedings instituted by an
employee or group of employees with any labor relations board seeking
recognition of a bargaining representative. To the best of the Company's
knowledge, no organizational effort is currently being made or threatened by or
on behalf of any labor union to organize any employees of the Company.
(b) There is no labor strike, dispute, slow down or stoppage
pending or threatened against or directly affecting the Company. No grievance
or arbitration proceeding arising out of or under any collective bargaining
agreement is pending, and no claims therefor exist. The Company has not
received any notice, and has no knowledge of any threatened labor or civil
rights dispute, controversy or grievance or any other unfair labor practice
proceeding or breach of contract claim or action with respect to claims of, or
obligations to, any employee or group of employees of the Company.
(c) All individuals who are performing or have performed services
for the Company and are or were classified by the Company as "independent
contractors" qualify for such classification under Section 530 of the Revenue
Act of 1978 or Section 1706 of the Tax
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Reform Act of 1986, as applicable, except for such instances which would not,
in the aggregate, have a Material Adverse Effect.
3.19 REAL PROPERTY HOLDING CORPORATION STATUS. Since its inception the
Company has not been a "United States real property holding corporation", as
defined in Section 897(c)(2) of the U.S. Internal Revenue Code of 1986, as
amended, and in Section 1.897-2(b) of the Treasury Regulations issued
thereunder (the "REGULATIONS"), and the Company has filed with the Internal
Revenue Service all statements, if any, with its United States income tax
returns which are required under Section 1.897-2(h) of the Regulations.
3.20 FULL DISCLOSURE. The information contained in this Agreement and
the Schedule of Exceptions with respect to the assets, results of operations,
and financial condition of the Company and the transactions contemplated by
this Agreement, the Investor Rights Agreement and the Warrant are true and
complete in all material respects and do not omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INVESTOR.
The Investor hereby represents and warrants to the Company, and agrees that:
4.1 AUTHORIZATION. This Agreement constitutes the Investor's valid and
legally binding obligation, enforceable in accordance with its terms except as
may be limited by (a) applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of
creditors' rights generally and (b) the effect of rules of law governing the
availability of equitable remedies. The Investor has full corporate power and
authority to enter into this Agreement and the Investor Rights Agreement.
4.2 PURCHASE FOR OWN ACCOUNT. The Purchased Shares and the Warrant to
be purchased by the Investor hereunder will be acquired for investment for the
Investor's own account, not as a nominee or agent, and not with a view to the
public resale or distribution thereof within the meaning of the 1933 Act, and
the Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same. The Investor also represents that it
has not been formed for the specific purpose of acquiring the Purchased Shares
and the Warrant.
4.3 DISCLOSURE OF INFORMATION. The Investor has received or has had
full access to all the information it considers necessary or appropriate to
make an informed investment decision with respect to the Purchased Shares and
the Warrant to be purchased by the Investor under this Agreement. The Investor
further has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of the Purchased
Shares, the Warrant and the Warrant Shares and to obtain additional information
(to the extent the Company possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify any information
furnished to the Investor or to which the Investor had access. The foregoing,
however, does not in any way limit or modify the representations and warranties
made by the Company in Section 3.
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4.4 INVESTMENT EXPERIENCE. The Investor understands that the purchase
of the Purchased Shares and the Warrant involves substantial risk. The
Investor: (a) has experience as an investor in securities of companies and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment in the Purchased Shares and the Warrant and has such knowledge
and experience in financial or business matters that it is capable of
evaluating the merits and risks of this investment in the Purchased Shares and
the Warrant and protecting its own interests in connection with this investment
and/or (b) has a preexisting personal or business relationship with the Company
and certain of its officers, directors or controlling persons of a nature and
duration that enables the Investor to be aware of the character, business
acumen and financial circumstances of such persons.
4.5 ACCREDITED INVESTOR STATUS. The Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the 1933 Act.
4.6 RESTRICTED SECURITIES. The Investor understands that the Purchased
Shares and the Warrant to be purchased by the Investor hereunder, and any
Warrant Shares to be purchased by the Investor upon exercise of the Warrant,
are characterized as "restricted securities" under the 1933 Act inasmuch as
they are being acquired from the Company in a transaction not involving a
public offering and that under the 1933 Act and applicable regulations
thereunder such securities may be resold without registration under the 1933
Act only in certain limited circumstances. The Investor is familiar with Rule
144 of the SEC, as presently in effect, and understands the resale limitations
imposed thereby and by the 1933 Act. The Investor understands that the Company
is under no obligation to register any of the securities sold hereunder except
as provided in the Investor Rights Agreement.
4.7 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Purchased Shares, the Warrant, or the
Warrant Shares unless and until:
(a) there is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) the Investor has notified the Company of the proposed
disposition and has furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and the Investor has furnished the
Company, at the expense of the Investor or its transferee, with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such securities under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) of this Section 4.7,
no such registration statement or opinion of counsel will be required for any
transfer of any Purchased Shares, the Warrant, or any Warrant Shares in
compliance with SEC Rule 144, Rule 144A or Rule 145(d), or if such transfer
otherwise is exempt, in the view of the Company's legal counsel, from the
registration requirements of the 1933 Act, provided that, in the case of any
transfer that is otherwise exempt, the transferee agrees in writing to be
subject to the terms of this Section 4 to the same extent as if the transferee
were the original Investor hereunder.
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4.8 LEGENDS. Certificates evidencing the Purchased Shares and the
Warrant Shares will bear each of the legends set forth below and the Warrant
will bear the legends set forth in (a) and (c) below:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(b) THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS SPECIFIED IN A CERTAIN INVESTOR RIGHTS AGREEMENT BETWEEN
THE COMPANY AND THE ORIGINAL HOLDER OF SUCH SHARES DATED AS OF DECEMBER 18,
1995, A COPY OF WHICH IS AVAILABLE FOR EXAMINATION AT THE ISSUER'S PRINCIPAL
OFFICE.
(c) Any legends required by any applicable state securities laws.
The legend set forth in Section 4.8(a) hereof will be removed by the Company
from any certificate evidencing Purchased Shares or the Warrant Shares upon
delivery to the Company of an opinion by counsel, reasonably satisfactory to
the Company, that a registration statement under the 1933 Act is at that time
in effect with respect to the legended security or that such security can be
freely transferred in a public sale without such a registration statement being
in effect and that such transfer will not jeopardize the exemption or
exemptions from registration pursuant to which the Company issued the Purchased
Shares, the Warrant or the Warrant Shares.
5. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING. The obligations
of the Investor under Sections 1 and 2 of this Agreement are subject to the
fulfillment or waiver, on or before the Closing (defined in Section 2.1), of
each of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations
and warranties of the Company contained in Section 3 will be true and correct
on and as of the Closing, except as set forth in the Schedule of Exceptions, as
amended through the Closing, with the same effect as though such
representations and warranties had been made as of the Closing.
5.2 PERFORMANCE. The Company will have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be
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performed or complied with by it on or before the Closing and will have
obtained all approvals, consents and qualifications necessary to complete the
purchase and sale described herein.
5.3 COMPLIANCE CERTIFICATE. The Company will have delivered to the
Investor at the Closing a certificate signed on its behalf by its Chief
Executive Officer or Chief Financial Officer certifying that the conditions
specified in Sections 5.1 and 5.2 hereof have been fulfilled.
5.4 SECURITIES EXEMPTIONS. The offer and sale of the Purchased Shares
and the Warrant to the Investor pursuant to this Agreement will be exempt from
the registration requirements of the 1933 Act and the registration and/or
qualification requirements of all applicable state securities laws.
5.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto will be reasonably satisfactory in form and substance to the
Investor, and the Investor will have received all such counterpart originals
and certified or other copies of such documents as it may reasonably request.
Such documents shall include (but not be limited to) the following:
(a) CERTIFIED CHARTER DOCUMENTS. A copy of (i) the Certificate of
Incorporation certified as of a recent date by the Secretary of State of
Delaware as a complete and correct copy thereof, and (ii) the Bylaws of the
Company (as amended through the date of the Closing) certified by the Secretary
of the Company as true and correct copies thereof as of the Closing.
(b) BOARD RESOLUTIONS. A copy, certified by the Secretary of the
Company, of the resolutions of the Board of Directors of the Company providing
for the approval of this Agreement and the Investor Rights Agreement and the
issuance of the Purchased Shares and the Warrant and the other matters
contemplated hereby.
5.6 OPINION OF COMPANY COUNSEL. The Investors will have received an
opinion of Company counsel, dated as of the date of the Closing, substantially
in the form attached hereto as EXHIBIT D.
5.7 WARRANT AND INVESTOR RIGHTS AGREEMENT. The Company will have issued
the Warrant and will have executed and delivered the Investor Rights Agreement
substantially in the form attached to this Agreement as EXHIBIT E (the
"INVESTOR RIGHTS AGREEMENT").
5.8 TECHNOLOGY AGREEMENT. (a) The Company will have executed and
delivered the Technology Agreement between the Company and the Investor
relating to the licensing, marketing and development of certain of the
Company's system-level software designed for use with desktop computer and
server computer products (the "TECHNOLOGY AGREEMENT"), and (b) the Company and
the Investor shall have agreed to a Transition Plan pursuant to Section 13 of
the Technology Agreement.
5.9 NO MATERIAL ADVERSE EFFECT. Between the date hereof and the
Closing, there shall not have occurred any Material Adverse Effect.
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6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of
the Company to the Investor under this Agreement are subject to the fulfillment
or waiver on or before the Closing (defined in Section 2.1), of each of the
following conditions:
6.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Investor contained in Section 4 will be true and correct on
the date of the Closing with the same effect as though such representations and
warranties had been made as of the Closing.
6.2 PAYMENT OF PURCHASE PRICE. The Investor will have delivered to the
Company the full purchase price of the Purchased Shares as specified in Section
1.2 and the full purchase price of the Warrant as specified in Section 1.4, in
accordance with the provisions of Section 2.
6.3 SECURITIES EXEMPTIONS. The offer and sale of the Purchased Shares
and the Warrant to the Investor pursuant to this Agreement will be exempt from
the registration requirements of the 1933 Act and the registration and/or
qualification requirements of all applicable state securities laws.
6.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto will be reasonably satisfactory in form and substance to the
Company and to the Company's legal counsel, and the Company will have received
all such counterpart originals and certified or other copies of such documents
as it may reasonably request.
6.5 INVESTOR RIGHTS AGREEMENT. The Investor will have executed and
delivered the Investor Rights Agreement.
6.6 TECHNOLOGY AGREEMENT. (a) The Investor will have executed and
delivered the Technology Agreement, and (b) the Company and the Investor shall
have agreed to a Transition Plan pursuant to Section 13 of the Technology
Agreement.
7. INDEMNIFICATION.
7.1 AGREEMENT TO INDEMNIFY.
(a) The Investor, its Affiliates and Associates, and each officer,
director, shareholder, employer, representative and agent of any of the
foregoing (collectively, the "INVESTOR INDEMNITEES") shall each be
indemnified and held harmless to the extent set forth in this Section 7 by the
Company with respect to any and all Damages incurred by any Investor Indemnitee
as a proximate result of any inaccuracy or misrepresentation in, or breach of,
any representation, warranty, covenant or agreement made by the Company in this
Agreement, the Investor Rights Agreement or the Warrant (including any Exhibits
and Schedules hereto).
(b) COMPANY INDEMNITY. The Company, its respective Affiliates and
Associates, and each officer, director, shareholder, employer, representative
and agent of any of the foregoing (collectively, the "COMPANY INDEMNITEES")
shall each be indemnified and held
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harmless to the extent set forth in this Section 7, by the Investor, in respect
of any and all Damages incurred by any Company Indemnitee as a result of any
inaccuracy or misrepresentation in, or breach of, any representation, warranty,
covenant or agreement made by the Investor in this Agreement or the Investor
Rights Agreement.
(c) EQUITABLE RELIEF Nothing set forth in this Section 7 shall be
deemed to prohibit or limit any Investor Indemnitee's or Company Indemnitee's
right at any time before, on or after the Closing Date, to seek injunctive or
other equitable relief for the failure of any Indemnifying Party to perform or
comply with any covenant or agreement contained herein.
7.2 SURVIVAL. All representations and warranties of the Investor and
the Company contained herein or in the Investor Rights Agreement or the
Warrant, and all claims of any Investor Indemnitee or Company Indemnitee in
respect of any inaccuracy or misrepresentation in or breach thereof, shall
survive the Closing until the later of (i) the date of termination of the Right
of Participation under the Investor Rights Agreement, and (ii) the third
anniversary of the date of this Agreement, regardless of whether the applicable
statute of limitations, including extensions thereof, may expire. All
covenants and agreements of the Investor and the Company contained herein or in
the Investor Rights Agreement or the Warrant shall survive the Closing. All
claims of any Investor Indemnitee or Company Indemnitee in respect of any
breach of such covenants or agreements shall survive the Closing until the
expiration of two years following the non-breaching party's obtaining actual
knowledge of such breach.
7.3 CLAIMS FOR INDEMNIFICATION. If any Investor Indemnitee or Company
Indemnitee (an "INDEMNITEE") shall believe that such Indemnitee is entitled to
indemnification pursuant to this Section 7 in respect of any Damages, such
Indemnitee shall give the appropriate Indemnifying Party (which for purposes
hereof, in the case of an Investor Indemnitee, means the Company, and in the
case of a Company Indemnitee, means the Investor) prompt written notice
thereof. Any such notice shall set forth in reasonable detail and to the
extent then known the basis for such claim for indemnification. The failure of
such Indemnitee to give notice of any claim for indemnification promptly shall
not adversely affect such Indemnitee's right to indemnity hereunder except to
the extent that such failure adversely affects the right of the Indemnifying
Party to assert any reasonable defense to such claim. Each such claim for
indemnity shall expressly state that the Indemnifying Party shall have only the
twenty (20) business day period referred to in the next sentence to dispute or
deny such claim. The Indemnifying Party shall have twenty (20) business days
following its receipt of such notice either (a) to acquiesce in such claim by
giving such Indemnitee written notice of such acquiescence or (b) to object to
the claim by giving such Indemnitee written notice of the objection. If
Indemnifying Party does not object thereto within such twenty (20) business day
period, such Indemnitee shall be entitled to be indemnified for all Damages
reasonably and proximately incurred by such Indemnitee in respect of such
claim. If the Indemnifying Party objects to such claim in a timely manner, the
senior management of the Company and Investor shall meet to attempt to resolve
such dispute. If the dispute cannot be resolved by the senior management,
either party may make a written demand for formal dispute resolution and
specify therein the scope of the dispute. Within thirty days after such
written notification, the parties agree to meet for one day with an impartial
mediator and consider dispute resolution alternatives other than litigation.
If an alternative method of dispute resolution is not agreed upon within
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thirty days after the one day mediation, either party may begin litigation
proceedings. Nothing in this section shall be deemed to require arbitration.
7.4 DEFENSE OF CLAIMS. In connection with any claim that may give rise
to indemnity under this Section 7 resulting from or arising out of any claim or
Proceeding against an Indemnitee by a person or entity that is not a party
hereto, the Indemnifying Party may but shall not be obligated to (unless such
Indemnitee elects not to seek indemnity hereunder for such claim), upon written
notice to the relevant Indemnitee, assume the defense of any such claim or
Proceeding if the Indemnifying Party with respect to such claim or Proceeding
acknowledges to the Indemnitee the Indemnitee's right to indemnity pursuant
hereto to the extent provided herein (as such claim may have been modified
through written agreement of the parties or arbitration hereunder) and provide
assurances, satisfactory to such Indemnitee, that the Indemnifying Party will
be financially able to satisfy such claim to the extent provided herein if such
claim or Proceeding is decided adversely. If the Indemnifying Party assumes
the defense of any such claim or Proceeding, the Indemnifying Party shall
select counsel reasonably acceptable to such Indemnitee to conduct the defense
of such claim or Proceeding, shall take all steps necessary in the defense or
settlement thereof and shall at all times diligently and promptly pursue the
resolution thereof. If the Indemnifying Party shall have assumed the defense
of any claim or Proceeding in accordance with this Section 7.4, the
Indemnifying Party shall be authorized to consent to a settlement of, or the
entry of any judgment arising from, any such claim or Proceeding, without the
prior written consent of such Indemnitee; PROVIDED, HOWEVER, that the
Indemnifying Party shall pay or cause to be paid all amounts arising out of
such settlement or judgment concurrently with the effectiveness thereof;
PROVIDED, FURTHER, that the Indemnifying Party shall not be authorized to
encumber any of the assets of any Indemnitee or to agree to any restriction
that would apply to any Indemnitee or to its conduct of business; and PROVIDED,
FURTHER, that a condition to any such settlement shall be a complete release of
such Indemnitee and its Affiliates, directors, officers, employees and agents
with respect to such claim, including any reasonably foreseeable collateral
consequences thereof. Such Indemnitee shall be entitled to participate in (but
not control) the defense of any such action, with its own counsel and at its
own expense. Each Indemnitee shall, and shall cause each of its Affiliates,
directors, officers, employees and agents to, cooperate fully with the
Indemnifying Party in the defense of any claim or Proceeding being defended by
the Indemnifying Party pursuant to this Section 7.4. If the Indemnifying Party
does not assume the defense of any claim or Proceeding resulting therefrom in
accordance with the terms of this Section 7.4, such Indemnitee may defend
against such claim or Proceeding in such manner as it may deem appropriate,
including settling such claim or Proceeding after giving notice of the same to
the Indemnifying Party, on such terms as such Indemnitee may deem appropriate.
If any Indemnifying Party seeks to question the manner in which such Indemnitee
defended such claim or Proceeding or the amount of or nature of any such
settlement, such Indemnifying Party shall have the burden to prove by a
preponderance of the evidence that such Indemnitee did not defend such claim or
Proceeding in a reasonably prudent manner.
7.5 CERTAIN DEFINITIONS. As used in this Section 7, (a) "AFFILIATE"
means, with respect to any person or entity, any person or entity directly or
indirectly controlling, controlled by or under direct or indirect common
control with such other person or entity; (b) "ASSOCIATE" means, when used to
indicate a relationship with any person or entity, (1) any other person or
entity of which such first person or entity is an officer, director or partner
or is, directly or
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indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities, membership interests or other comparable ownership interests
issued by such other person or entity, (2) any trust or other estate in which
such first person or entity has a ten percent (10%) or more beneficial interest
or as to which such first person or entity serves as trustee or in a similar
fiduciary capacity, and (3) any relative or spouse of such first person or
entity who has the same home as such first person or entity or who is a
director or officer of such first person or entity; (c) "DAMAGES" means all
demands, claims, actions or causes of action, assessments, losses, damages,
costs, expenses, liabilities, judgments, awards, fines, response costs,
sanctions, taxes, penalties, charges and amounts paid in settlement, including
(1) interest on cash disbursements in respect of any of the foregoing at the
prime rate of Bank of America, NT & SA, as in effect from time to time,
compounded quarterly, from the date each such cash disbursement is made until
the date the party incurring such cash disbursement shall have been indemnified
in respect thereof, and (2) reasonable out-of-pocket costs, fees and expenses
(including reasonable costs, fees and expenses of attorneys, accountants and
other agents of, or other parties retained by, such party), less net tax
benefits and insurance proceeds actually realized and attributable thereto, and
(d) "PROCEEDING" means any action, suit, hearing, arbitration, audit,
proceeding (public or private) or investigation that is brought or initiated by
or against any federal, state, local or foreign governmental authority or any
other person or entity.
8. MISCELLANEOUS.
8.1 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
will inure to the benefit of and be binding upon the respective successors and
assigns of the parties.
8.2 GOVERNING LAW. This Agreement will be governed by and construed
under the internal laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware,
without reference to principles of conflict of laws or choice of laws.
8.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
8.4 HEADINGS. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement. All references in this Agreement to sections, paragraphs,
exhibits and schedules will, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits and schedules attached hereto, all of which
exhibits and schedules are incorporated herein by this reference.
8.5 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement will be given in writing and will be deemed
effectively given upon personal delivery to the party to be notified, or three
(3) business days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, or by deposit with a nationally
recognized courier service such as Fedex, or by facsimile with confirmed
receipt and addressed to the party to be notified at the address indicated for
such party on the signature page hereof or at such other address as the
Investor or the Company may designate by giving at least ten (10) days advance
written notice pursuant to this Section 8.5.
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8.6 NO FINDER'S FEES. Each party represents that it neither is nor will
be obligated for any finder's or broker's fee or commission in connection with
this transaction other than the fee payable by the Company to Broadview
Associates. The Investor will indemnify and hold harmless the Company from any
liability for any commission or compensation in the nature of a finders' or
broker's fee for which the Investor or any of its officers, partners, employees
or consultants, or representatives is responsible. The Company will indemnify
and hold harmless the Investor from any liability for any commission or
compensation in the nature of a finder's or broker's fee for which the Company
or any of its officers, employees or consultants or representatives is
responsible.
8.7 AMENDMENTS AND WAIVERS. This Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of Purchased Shares and/or
Warrant Shares representing at least a majority of the total aggregate number
of Purchased Shares and Warrant Shares then outstanding (excluding any of such
shares that have been sold to the public or pursuant to SEC Rule 144). Any
amendment or waiver effected in accordance with this Section 8.7 will be
binding upon the Investor, the Company and their respective successors and
assigns.
8.8 SEVERABILITY. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
8.9 ENTIRE AGREEMENT. This Agreement, together with all Exhibits and
schedules hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
8.10 FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of the Investor or the Company, the Company and the Investor
will execute and deliver such instruments, documents or other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
8.11 FEES, COSTS AND EXPENSES. All fees, costs and expenses (including,
without limitation, attorneys' fees and expenses) incurred by either party
hereto in connection with the preparation, negotiation and execution of this
Agreement, the Investor Rights Agreement and the Warrant, and the consummation
of the transactions contemplated hereby and thereby, shall be the sole and
exclusive responsibility of such party.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PHOENIX TECHNOLOGIES LTD. INTEL CORPORATION
2770 De La Cruz Boulevard 2200 Mission College Boulevard
Santa Clara, California 95050 Santa Clara, California 95052-8119
By: /s/ SCOTT C. NEELY By: /s/ ARVIND SODHANI
-------------------------- --------------------------------
Name: Scott C. Neely Name: Arvind Sodhani
------------------------ ------------------------------
Title: VP and General Counsel Title: Vice President and Treasurer
----------------------- -----------------------------
Date signed: 12/18/95 Date signed: 12/18/95
----------------- -----------------------
[SIGNATURE PAGE TO COMMON STOCK AND WARRANT PURCHASE AGREEMENT]
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