Stock Purchase Agreement - Starcode Software Inc. and Be Inc.
STOCK PURCHASE AGREEMENT
BETWEEN
STARCODE SOFTWARE, INC.
AND
THE SHAREHOLDERS OF STARCODE SOFTWARE, INC.
AND
BE INCORPORATED
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TABLE OF CONTENTS
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PAGE
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1. DESCRIPTION OF TRANSACTION.......................................... 1
1.1 Sale and Transfer of Shares................................ 1
1.2 Purchase Price............................................. 2
1.3 Closing.................................................... 2
2. REPRESENTATIONS AND WARRANTIES BY STARCODE AND THE SHAREHOLDERS..... 3
2.1 Organization, Powers and Qualification..................... 3
2.2 Subsidiaries; Interests in Other Companies................. 3
2.3 Capitalization............................................. 3
2.4 Authority; Binding Nature of Agreement..................... 4
2.5 Financial Statements....................................... 4
2.6 Liabilities................................................ 4
2.7 Schedules of Properties, Contracts and Other Data.......... 4
2.8 Taxes...................................................... 6
2.9 Title to Assets............................................ 6
2.10 Legal Proceedings, Etc..................................... 6
2.11 Brokers and Finders........................................ 6
2.12 Compliance with Laws, Etc.................................. 6
2.13 Patents, Trademarks, Licenses, Etc......................... 6
2.14 Condition of Properties.................................... 7
2.15 Absence of Changes......................................... 7
2.16 Other Negotiations......................................... 8
2.17 Employee Proprietary Information and Inventions Agreements. 8
2.18 Accuracy of Representations and Warranties................. 8
2.19 Compliance with Immigration Reform and Control Act
of 1986 ("IRCA")........................................... 8
2.20 Real Property Holding Corporation.......................... 8
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SHAREHOLDERS....... 9
3.1 Ownership of StarCode Shares............................... 9
3.2 Full Capacity; Binding Agreement........................... 9
3.3 Brokers and Finders........................................ 9
3.4 Legal Representation....................................... 9
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i.
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TABLE OF CONTENTS
(CONTINUED)
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PAGE
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3.5 Accuracy of Representations and Warranties................. 9
3.6 Taxes...................................................... 10
3.7 Compliance with Immigration Reform and Control Act
of 1986 ("IRCA")........................................... 10
4. REPRESENTATIONS AND WARRANTIES OF BE................................ 10
4.1 Organization, Powers and Authority......................... 10
4.2 Brokers and Finders........................................ 11
4.3 Accuracy of Representation and Warranties.................. 11
5. SURVIVAL AND INDEMNIFICATION........................................ 11
5.1 Survival of Representations, Etc........................... 11
5.2 Indemnification by the Shareholders........................ 11
5.3 Reliance................................................... 12
6. MISCELLANEOUS....................................................... 12
6.1 Post-Closing Covenant...................................... 12
6.2 Further Assurances......................................... 12
6.3 Notices.................................................... 12
6.4 Governing Law.............................................. 13
6.5 Expenses................................................... 13
6.6 Parties-in-Interest........................................ 13
6.7 Entire Agreement........................................... 13
6.8 Waiver..................................................... 13
6.9 Attorneys' Fees............................................ 13
6.10 Severability............................................... 13
6.11 Schedules.................................................. 14
6.12 Headings................................................... 14
6.13 Counterparts............................................... 14
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ii.
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LIST OF EXHIBITS AND SCHEDULES
StarCode Shareholders Exhibit A
Escrow Agreement Exhibit B
Noncompetition Agreement Exhibit C
Employment Agreement Exhibit D
Employee Proprietary Information and Inventions Agreement Exhibit E
General Release Exhibit F
StarCode Financial Statements Exhibit G
Exceptions to Representations and Warranties Schedule 2.0
Real and Personal Property Interests Schedule 2.7(a)
Leases and Agreements Schedule 2.7(b)
Licenses, Permits and Other Instruments Schedule 2.7(c)
Collective Bargaining Agreements and Other Agreements and Contracts Schedule 2.7(d)
Copyrights, Patents, Trademarks, etc. Schedule 2.7(e)
Instruments, Agreements and Arrangements Evidencing Borrowing Schedule 2.7(f)
Insurance Policies Schedule 2.7(g)
Material Contracts Schedule 2.7(h)
Banks and Accounts Schedule 2.7(i)
Litigation and Proceedings Schedule 2.7(j)
Consents and Approvals Schedule 2.7(k)
StarCode Guarantors/Contracts Schedule 6.1
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("Agreement") dated May 1, 1998 is by and
among BE INCORPORATED, a California Corporation ("Be"), 800 El Camino Real,
Suite 300, Menlo Park, CA 94025; STARCODE SOFTWARE, INC., a California
Corporation ("StarCode"), 1755 East Bayshore Road, Suite 16-A, Redwood City,
California 94063; Carlin Wiegner, an individual resident in Menlo Park,
California ("C. Wiegner"); Robert A. Biorn, Trustee for Andrew R. Wollenberg
("A. Wollenberg Trustee"); Robert A. Biorn, Trustee for Blake E. Wollenberg ("B.
Wollenberg Trustee"); Carey Heckman, an individual resident in Palo Alto,
California ("Heckman"); Michael Klingbeil, an individual resident in Palo Alto,
California ("Klingbeil"); Kevin McBride, an individual resident in Dallas, Texas
("McBride"); Mary McDermott, an individual resident in Dallas, Texas
("McDermott"); Edward Wiegner, an individual resident in Vero, Florida ("E.
Wiegner"); and David Wollenberg, an individual resident in Atherton, California
("Wollenberg") (each a "Shareholder," and collectively, the "Shareholders").
RECITALS
The shares of capital stock of StarCode owned by Shareholders listed on
EXHIBIT A attached hereto (collectively, the "Shares") constitute all of the
issued and outstanding shares of capital stock of StarCode.
Each of the Shareholders desires to sell, and Be desires to purchase, all
of the Shares for the consideration and on the terms set forth in this
Agreement.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
1. DESCRIPTION OF TRANSACTION.
1.1 SALE AND TRANSFER OF SHARES. Upon the terms and subject to the
conditions set forth in this Agreement:
(A) C. Wiegner hereby sells, assigns and transfers to Be, and Be
hereby purchases from C. Wiegner, the 327,000 shares owned by C. Wiegner;
(B) A. Wollenberg Trustee hereby sells, assigns and transfers to Be,
and Be hereby purchases from A. Wollenberg Trustee, the 7,500 shares owned by A.
Wollenberg Trustee;
(C) B. Wollenberg Trustee hereby sells, assigns and transfers to Be,
and Be hereby purchases from B. Wollenberg Trustee, the 7,500 shares owned by B.
Wollenberg Trustee;
(D) Klingbeil hereby sells, assigns and transfers to Be, and Be
hereby purchases from Klingbeil, the 200,000 shares owned by Klingbeil;
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(E) Heckman hereby sells, assigns and transfers to Be, and Be hereby
purchases from Heckman, the 25,000 shares owned by Heckman;
(F) McBride hereby sells, assigns and transfers to Be, and Be hereby
purchases from McBride, the 23,364 shares owned by McBride;
(G) McDermott hereby sells, assigns and transfers to Be, and Be
hereby purchases from McDermott, the 23,364 shares owned by McDermott;
(H) E. Wiegner hereby sells, assigns and transfers to Be, and Be
hereby purchases from E. Wiegner, the 366,400 shares owned by E. Wiegner; and
(I) Wollenberg hereby sells, assigns and transfers to Be, and Be
hereby purchases from Wollenberg, the 10,000 shares owned by Wollenberg.
1.2 PURCHASE PRICE.
(A) The aggregate purchase price payable by Be for the Shares (the
"Purchase Price") shall be Four Hundred Forty-Four Thousand Six Hundred Twenty-
Two Dollars ($444,622) payable as set forth below. Each Shareholder listed on
EXHIBIT A shall be paid his or her pro rata share (based on the liquidation
rights of the stock held by Shareholders) of the Purchase Price as set forth on
EXHIBIT A.
(B) The portion of the Purchase Price equaling Seventy Thousand
Dollars ($70,000) (the "Escrow Funds") shall be delivered by Be to the Escrow
Agent (as defined in EXHIBIT B attached hereto) on the Closing Date (as defined
in Section 1.3) by wire transfer of immediately available funds. Pursuant to
this Section 1.2, Be, the Shareholders and an escrow agent shall enter into the
Escrow Agreement in substantially the form attached hereto as EXHIBIT B.
(C) The remainder of the Purchase Price shall be paid by Be to the
Shareholders at the Closing (as defined in Section 1.3) by wire transfer of
immediately available funds to an account or accounts to be designated by the
Shareholders.
1.3 CLOSING.
(A) The closing of the sale of the Shares to Be (the "Closing") shall
take place at the Palo Alto office of Cooley Godward LLP, at 10:00 a.m. on April
30, 1998 (the "Closing Date") or at such other place or time as the parties may
agree.
(B) At the Closing:
(I) All outstanding options to acquire stock of StarCode shall
have been exercised in full or cancelled prior to the Closing. Each holder of a
certificate or certificates representing StarCode capital stock issued and
outstanding shall surrender such certificate(s) to Be.
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(II) Be shall pay the Purchase Price less the amount of the
Escrow Funds by check or wire transfer to the Shareholders.
(III) Be shall pay the following assumed liabilities of StarCode
by check or wire transfer to the appropriate parties: (A) debt in the amount of
$64,378; (B) bonuses to employees in the aggregate amount of $16,000; (C) the
reasonable, documented legal and accounting fees and expenses incurred by
StarCode and the Shareholders in connection with the transactions contemplated
by this Agreement through the date of the Closing not to exceed $20,000; and (D)
all salary amounts and accrued vacation amounts due and owing to employees or
ex-employees of StarCode as of the Closing, which are itemized in Schedule 2.0
attached hereto.
(IV) C. Wiegner and Klingbeil shall execute and deliver to Be a
Noncompetition Agreement in substantially the form attached hereto as EXHIBIT C.
(V) Each of C. Wiegner, Klingbeil, Michael McBride, Bryce
Matthews and Justin Rowe shall execute and deliver an Employment Agreement in
substantially the forms attached hereto as EXHIBIT D and an Employee Proprietary
Information and Inventions Agreement in substantially the form attached hereto
as EXHIBIT E.
(VI) Each Shareholder shall execute and deliver to Be and
StarCode a General Release in substantially the form attached hereto as EXHIBIT
F.
(VII) The Shareholders shall resign from their positions as
directors and officers of StarCode.
2. REPRESENTATIONS AND WARRANTIES BY STARCODE AND THE SHAREHOLDERS.
Except as set forth on Schedule 2.0, StarCode and the Shareholders jointly
and severally represent and warrant to Be as follows:
2.1 ORGANIZATION, POWERS AND QUALIFICATION. StarCode is a corporation duly
organized and validly existing under the laws of the State of California and has
all requisite corporate power and authority to own its properties and assets and
carry on its business as now conducted. StarCode is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in which the
failure to qualify would have a material adverse effect on its business and
financial condition. StarCode has delivered to Be copies of StarCode's Articles
of Incorporation and Bylaws as currently in effect.
2.2 SUBSIDIARIES; INTERESTS IN OTHER COMPANIES. StarCode does not own,
directly or indirectly, voting stock or interests in any corporation,
partnership, joint venture, business trust or other business entity.
2.3 CAPITALIZATION. The authorized capital of StarCode consists of one
million three hundred sixty-three thousand one hundred forty-two (1,363,142)
shares of common stock, of which four hundred thousand (400,000) shares are
issued and outstanding (as set forth on EXHIBIT A), and six hundred thirty-six
thousand eight hundred fifty-eight (636,858) shares of preferred stock, of which
five hundred ninety thousand one hundred twenty-eight (590,128)
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shares are issued and outstanding (as set forth on EXHIBIT A). All such issued
and outstanding shares and options of capital stock are duly and validly
authorized and issued, are fully paid and nonassessable and are free from
preemptive rights and have been issued in compliance with all applicable
securities laws of the United States and all states. Except as set forth herein,
there are no options, warrants, conversion privileges or other rights
outstanding to acquire any shares of the capital stock of StarCode.
2.4 AUTHORITY; BINDING NATURE OF AGREEMENT. The Board of Directors of
StarCode has authorized the execution, delivery and performance of this
Agreement by StarCode, and has authorized the transactions contemplated by this
Agreement. StarCode has the power and authority to execute, deliver and perform
this Agreement and the Agreement is valid, binding and enforceable against
StarCode in accordance with its terms.
2.5 FINANCIAL STATEMENTS. StarCode has delivered to Be (i) StarCode's
unaudited balance sheet as of December 31, 1997 and unaudited statement of
profit and loss for the twelve months ended December 31, 1997 and (ii)
StarCode's unaudited balance sheet as of March 31, 1998 and unaudited statement
of profit and loss for the three months ended March 31, 1998 (collectively, the
"StarCode Financial Statements"), copies of which are attached hereto as EXHIBIT
G. To the best of StarCode's knowledge, the StarCode Financial Statements are
complete and correct in all material respects, and present fairly the financial
condition and position of StarCode as of the respective dates thereof; provided,
however, that the StarCode Financial Statements are subject to normal recurring
year-end audit adjustments (which are not expected to be material). All
information for all periods covered by the StarCode Financial Statements
contains all adjustments, consisting only of normally recurring accruals,
necessary for a fair presentation of the results for such periods.
2.6 LIABILITIES. Except as set forth on Schedule 2.0, StarCode has no
material liabilities (known or unknown, matured or not, contingent or otherwise)
other than as disclosed in the StarCode Financial Statements, except current
liabilities incurred in the ordinary course of business subsequent to the date
of the StarCode Financial Statements which have not been, either in any case or
in the aggregate, materially adverse. At the Closing, StarCode's liabilities,
other than the liabilities set forth in Section 1.3(b)(iii), shall be less than
$10,000.
2.7 SCHEDULES OF PROPERTIES, CONTRACTS AND OTHER DATA. Attached to and
made a part of this Agreement are the following described schedules of
properties, contracts and other data of or pertaining to StarCode ("Schedules"):
(A) Schedule 2.7(a) describes all real estate or material fixed
assets owned by StarCode, in each case free and clear of all mortgages, liens,
or other encumbrances except as otherwise stated in the Schedule.
(B) Schedule 2.7(b) describes all leases or agreements under which
StarCode is lessee of, or holds or operates any interest in or right to use real
or personal property owned by any third party.
(C) Schedule 2.7(c) describes all licenses, permits and other
instruments under which StarCode has acquired or has granted a right to use or
distribute any business system,
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name or mark, patent, copyright, technology, know-how, intellectual property, or
other intangible property of StarCode or any third party.
(D) Schedule 2.7(d) describes all collective bargaining agreements to
which StarCode is a party and all other agreements and contracts pertaining to
terms and conditions of employment by StarCode, either written or oral,
including but not limited to employment agreements, employment letter offers,
consulting agreements, stock option plans, pension or profit sharing plans,
bonus plans, and group health, life and disability insurance plans, to which
StarCode is a party or under which the employees of StarCode have rights by
virtue of being employees of StarCode. The independent contractor agreements
between StarCode and the individuals listed on Schedule 2.7(d) have effectively
transferred ownership to StarCode of all work performed by such individuals for
StarCode at any time.
(E) Schedule 2.7(e) describes specifically all patents and patents
pending, trademarks, trademark registrations, trade names, service marks, and
copyrights, and describes generally and briefly all trade secrets, know-how,
technology and other intellectual property owned by, registered in the name of,
or otherwise the property of StarCode.
(F) Schedule 2.7(f) describes all existing instruments, agreements or
arrangements pursuant to which StarCode has borrowed any money, incurred any
other indebtedness, established a line of credit or guaranteed the indebtedness
or obligation of another person, corporation or other entity.
(G) Schedule 2.7(g) describes all policies of life, casualty,
liability or other forms of insurance owned by StarCode, each policy being in
full force and effect with premiums paid as noted on the Schedule.
(H) Schedule 2.7(h) describes all other material contracts,
agreements, commitments and instruments not described on the foregoing
Schedules, either written or oral, to which StarCode is a party.
(I) Schedule 2.7(i) describes all banks in which StarCode has an
account or a safe deposit box, the respective account numbers of such accounts,
and the names of all persons authorized to draw on such accounts or who have
access to such accounts.
(J) Schedule 2.7(j) describes all litigation or proceedings pending
(or, to the best knowledge of StarCode, threatened) to which StarCode is (or
would become) a party.
(K) Schedule 2.7(k) describes (except for the consents of the Board
of Directors of StarCode and of its shareholders) all consents and approvals,
including approvals of government agencies, required for the execution and
delivery of this Agreement by StarCode and the consummation of the transactions
contemplated by this Agreement.
StarCode has made available to Be true and complete copies of all documents
described in the above Schedules. Except to the extent described in the
Schedules, StarCode has performed all of the obligations required to be
performed by it to date and is not in default in any material respect under any
of the agreements, contracts, instruments or documents described in the
Schedules, nor, to the best knowledge of StarCode, is any other party to such
agreements, contracts,
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instruments or documents in default thereunder in any material respect.
2.8 TAXES. StarCode has filed all federal, state, local and other tax
returns and reports, if any, required to be filed by it and such returns are
true and correct in all material respects. StarCode has paid all taxes, if any,
shown to be due and payable on said returns and reports and has withheld with
respect to employees all federal and state income taxes, FICA, FUTA and other
taxes and charges required to be withheld. StarCode has established reserves
adequate for the payment of all taxes for the period from March 31, 1998 through
the Closing Date, and StarCode will disclose the dollar amount of such reserves
to Be on or prior to the Closing Date.
2.9 TITLE TO ASSETS. StarCode has good and marketable title to all of its
owned assets as described in the balance sheet contained in the StarCode
Financial Statements and the schedules described in Section 2.7, free and clear
of all mortgage, pledges, liens, security interests, conditional sale
agreements, royalties, charges, encumbrances, claims and restrictions of every
kind and nature except as otherwise set forth in Schedules 2.7(a), 2.7(b),
2.7(c), 2.7(e), 2.7(f), 2.7(g), 2.7(h) and 2.7(i).
2.10 LEGAL PROCEEDINGS, ETC. Except as set forth on Schedule 2.7(i), (i)
there is no legal, administrative, arbitration or other proceeding or
governmental investigation pending (or, to the best knowledge of StarCode,
threatened) to which StarCode is (or would become) a party, (ii) nor does
StarCode know of facts which would give rise to a claim which, if asserted,
would have a material adverse affect on its business, (iii) nor is StarCode
subject to any outstanding judgment, order or decree of any court or
administrative agency.
2.11 BROKERS AND FINDERS. Neither StarCode nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement.
2.12 COMPLIANCE WITH LAWS, ETC. StarCode has complied with the provisions
of its Articles of Incorporation, as amended or restated, and Bylaws, and has
complied with all statutes, laws, ordinances, regulations and other requirements
applicable to StarCode where the failure to comply would have a material adverse
effect on the business of StarCode. The execution and delivery of this Agreement
and the consummation of the transactions contemplated will not (i) conflict
with, or result in any breach or violation by StarCode of, or constitute a
default by StarCode under, its Articles of Incorporation, as amended or
restated, or Bylaws, or, any statute, law, ordinance, regulation or other
requirement applicable to StarCode or (ii) except as stated in this Agreement or
the Schedules hereto, result in any breach or violation of, termination of or
default under any agreement or instrument to which StarCode is a party or by
which it is bound.
2.13 PATENTS, TRADEMARKS, LICENSES, ETC. StarCode owns or holds valid,
unrestricted, enforceable and exclusive rights for the use of all patents,
trademarks, trademark registrations, trade names, service marks, copyrights,
trade secrets, know-how, technology and other intellectual property (i)
described on Schedules 2.7(c) and 2.7(e) or (ii) used by StarCode in the conduct
of its business (except to the extent such rights have been licensed, assigned
or
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otherwise transferred to others, as described on such Schedules), and the
conduct by StarCode of its business does not conflict with or infringe upon any
United States patents issued on or before the Closing, or any trademarks, trade
names, copyrights, licenses to use the same or other rights or property of
others. StarCode holds or has obtained all necessary U.S. government export
licenses necessary to export its products to those countries in which it is
distributing its products. StarCode holds or has obtained all other governmental
permits, licenses, consents, approvals and waivers necessary for the lawful
conduct of its business as now conducted. There are no rights or restrictions in
any agreements, licenses, franchises or other instruments to which StarCode is a
party or by which it is bound which would prevent StarCode from carrying on its
current business or any business that StarCode currently proposes to conduct.
2.14 CONDITION OF PROPERTIES. All of the properties of StarCode are in good
operating condition and repair, subject only to ordinary wear and tear which is
not such as to render the properties less than substantially fit for the
purposes for which they are being used.
2.15 ABSENCE OF CHANGES. Since March 31, 1998:
(A) StarCode has carried on its business in a manner in accordance
with past practices and in a manner which is to the best of StarCode's knowledge
and belief reasonable and prudent.
(B) StarCode has not engaged in any transaction out of the ordinary
course of business including the purchase, sale, assignment, license or other
disposition or transfer of property.
(C) StarCode has not made capital expenditures of a material nature,
or satisfied or discharged any material liabilities, except in the ordinary
course of business, or incurred any liabilities, or, to the best of StarCode's
knowledge, incurred any contingent liabilities, except in the ordinary course of
business.
(D) StarCode has not taken any action or, to the extent the same is
within its reasonable control, permitted any action to be taken inconsistent
with preserving its existing business organization and relations with employees,
customers, suppliers and others with whom it has a business relationship and
with protecting its rights and properties.
(E) StarCode has not entered into any employment contracts or paid any
special bonuses or special remuneration to any officers, directors or employees
other than commissions and bonuses in the ordinary course of business.
(F) StarCode has conducted its business in compliance with all
material laws and regulations applicable to StarCode.
(G) StarCode has not encumbered or permitted to be encumbered any of
its properties or assets except in the ordinary course of business.
(H) StarCode has not declared or paid any dividends or made any other
distributions with respect to its capital stock.
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(I) StarCode has not purchased, redeemed, retired or otherwise
acquired its own capital stock
(J) StarCode has not issued, sold, encumbered or given any option or
right to purchase any of its capital stock or other securities.
(K) Except for beta copy use licenses, StarCode has not licensed,
assigned, transferred or conveyed to any third party any property or right
necessary to the conduct of its current business, including any manufacturing
rights or rights to access the computer source code related to any of its
products.
(L) StarCode has not entered into any other transactions which would
result in the transfer by StarCode of assets or rights for other than full and
fair consideration.
(M) StarCode has not suffered any material damage, destruction or loss
to its assets or business, whether or not covered by insurance.
2.16 OTHER NEGOTIATIONS. Except for the transaction contemplated by this
Agreement there is no existing commitment to sell all or a significant part of
the assets or the stock of StarCode, there is no outstanding offer to sell all
or a substantial part of the assets or stock of StarCode, and there are no
pending negotiations for the sale of all or a substantial part of the assets or
stock of StarCode.
2.17 EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. All of
StarCode's employees, both current and past, and all current and past
consultants who had access to, worked with, prepared, modified or developed any
portion of the intellectual property described on Schedule 2.7(e) have executed
an employee proprietary information and inventions agreement or an independent
contractor agreement in the forms of such agreements previously provided to
counsel for Be.
2.18 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of StarCode contained in this Agreement, including the attached
Schedules of StarCode, contain no untrue statement of a material fact and do not
omit or misstate a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances in which they are
made.
2.19 COMPLIANCE WITH IMMIGRATION REFORM AND CONTROL ACT OF 1986 ("IRCA").
StarCode has not engaged in any activity nor is it aware of any practice with
respect to its employees that is in violation of IRCA including but not limited
to, the anti-discrimination provisions, the verification of employment
eligibility procedures and the document fraud provisions. StarCode warrants that
it has complied with the applicable provisions of IRCA with respect to its
employees.
2.20 REAL PROPERTY HOLDING CORPORATION. StarCode is not a real property
holding corporation within the meaning of Internal Revenue Code Section
897(c)(2) and any regulations promulgated thereunder.
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3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SHAREHOLDERS.
Each Shareholder severally and not jointly represents and warrants to Be
and StarCode as of the date of this Agreement and as of the Closing Date with
respect to such Shareholder as follows:
3.1 OWNERSHIP OF STARCODE SHARES. Such Shareholder is the owner of the
number of shares of common stock of StarCode, free and clear of all liens and
encumbrances, listed opposite Shareholder's name on EXHIBIT A. These shares and
options constitute such Shareholder's entire interest in the capital stock of
StarCode, and Shareholder has no other options, warrants, conversion privileges
or other rights to acquire any shares of the capital stock of StarCode. In
addition, except as set forth on Schedule 2.0, such Shareholder has no claims
against StarCode of any nature, including claims for compensation, profit
sharing or other benefits, other than salary benefits and reimbursement for
normal business expenses/or the most recent pay period.
3.2 FULL CAPACITY; BINDING AGREEMENT. Each of the Shareholders is of sound
mind and full capacity to enter into this Agreement. Each of the Shareholders
has the absolute and unrestricted right, power and authority to perform his
obligations under this Agreement including the contemplated assignment, transfer
and delivery of the Shares to Be in accordance with this Agreement. Upon
execution and delivery by all of the parties thereto, this Agreement constitutes
the legal, valid and binding obligation of each Shareholder, in each case
enforceable against him in accordance with its terms, except as limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights; and (ii) general
principles of equity or public policy that restrict the availability of
equitable remedies. Each of C. Wiegner and Klingbeil severally and not jointly
hereby represents to Be that he (x) has the absolute and unrestricted right,
power and authority to perform his obligations under the Noncompetition
Agreement; and (y) upon execution and delivery by all of the parties thereto,
the Noncompetition Agreements constitutes his legal, valid and binding
obligations, enforceable against him in accordance with its terms, except as
limited by (A) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights and
(B) general principles of equity or public policy that restrict the availability
of equitable remedies.
3.3 BROKERS AND FINDERS. Shareholder has not employed any broker or finder
or incurred any liability/or any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated by this Agreement.
3.4 LEGAL REPRESENTATION. Shareholder has either consulted with
Shareholder's own legal counsel and other advisors and representatives regarding
the transactions contemplated by this Agreement or, having had the opportunity
to consult with such persons regarding such transactions, has chosen not to do
so.
3.5 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Shareholder contained in this Agreement contain no untrue
statement of a material fact and do not omit or misstate a material fact
necessary in order to make the
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statements contained therein not misleading in the light of the circumstances in
which they are made.
3.6 TAXES. Shareholder agrees that Shareholder will pay any income taxes
due from any compensation or consulting fees paid to Shareholder by StarCode.
3.7 COMPLIANCE WITH IMMIGRATION REFORM AND CONTROL ACT OF 1986 ("IRCA").
If Be employs Shareholder as a consultant, such employment will not be in
violation of IRCA, and Shareholder shall present valid documents to Be necessary
for verification of employment eligibility under IRCA.
4. REPRESENTATIONS AND WARRANTIES OF BE.
Be represents and warrants to StarCode and the Shareholders at and as of the
date of this Agreement and as of the Closing Date as follows:
4.1 ORGANIZATION, POWERS AND AUTHORITY. Be is a corporation duly organized
and validly existing under the laws of the State of California and has all
requisite corporate power and authority to execute, deliver and perform this
Agreement. The Board of Directors of Be has authorized the execution, delivery
and performance of this Agreement by Be, and has authorized the transactions
contemplated by the Agreement. Be has duly executed and delivered the Agreement.
The Agreement is valid, binding and enforceable against Be in accordance with
its terms, except as limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights; and (ii) general principles of equity or
public policy that restrict the availability of equitable remedies.
The execution and delivery of this Agreement by Be does not, and the
consummation of the transactions contemplated hereby will not, (x) conflict
with, or result in any violation or breach of any provision of the Articles of
Incorporation or Bylaws of Be, (y) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of any material benefit) under any of the terms, conditions or
provisions of any note, bond mortgage, indenture, lease, contract or other
agreement, instrument or obligation to which Be is a party or by which any of
its properties or assets may be bound or (z) conflict with or violate any
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Be or any of its properties or
assets, except in the case of (y) and (z) for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which would not be
reasonably likely to have a material adverse effect on Be. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
third party, including governmental entities, is required by or with respect to
Be in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. There is no action, suit,
proceeding, claim, arbitration or investigation pending, or to the best
knowledge of Be, threatened, against Be which in any manner challenges or seeks
to prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement.
10.
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4.2 BROKERS AND FINDERS. Be has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated by this Agreement.
4.3 ACCURACY OF REPRESENTATION AND WARRANTIES. The representations and
warranties of Be contained in this Agreement, contain no untrue statement of a
material fact and do not omit or misstate a material fact necessary in order to
make the statements contained therein not misleading in the light of the
circumstances in which they are made.
5. SURVIVAL AND INDEMNIFICATION.
5.1 SURVIVAL OF REPRESENTATIONS, ETC.
(A) The representations and warranties made by StarCode, Shareholders
and Be shall survive and shall expire on the first anniversary of the date of
this Agreement; provided, however, that if, at any time prior to the first
anniversary of the date of this Agreement, Be (acting in good faith) delivers to
Shareholders and the Escrow Agent (as defined in EXHIBIT B) a written notice
alleging the existence of an inaccuracy in or a breach of any of the
representations, warranties or covenants made by StarCode or Shareholders, as
applicable (and setting forth in reasonable detail the basis for Be's belief
that such an inaccuracy or breach may exist) and asserting a claim for recovery
under Section 5.2, based on such alleged inaccuracy or breach, then the claim
asserted in such notice shall survive the first anniversary of the date of this
Agreement until such time as such claim is fully and finally resolved.
(B) The representations, warranties, covenants and obligations of
StarCode and Shareholders, and the rights and remedies that may be exercised by
Be, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or knowledge of, Be or
any of their representatives.
(C) For purposes of this Agreement, each statement or other item of
information set forth in the Schedules shall be deemed to be a representation
and warranty made by StarCode and Shareholders in this Agreement.
5.2 INDEMNIFICATION BY THE SHAREHOLDERS. Subject to the terms of this
Section 5.2, in the event the purchase of the Shares occurs, each of the
Shareholders jointly (in proportion to their portion of the aggregate purchase
price for the StarCode stock as set forth on EXHIBIT A) shall indemnify and hold
harmless Be from and against and shall reimburse Be with respect to any and all
loss, damage, liability, cost and expense, including reasonable attorneys' fees,
incurred by Be by reason of or arising out of or in connection with the breach
of any covenant or the inaccuracy of any representation or warranty of StarCode
or the Shareholders contained in Sections 2 and 3 of this Agreement, whether or
not involving a third party. In the event of one or more breaches of any
covenant or the inaccuracy of any representation or warranty of StarCode or the
Shareholders, Be shall be entitled to obtain indemnity from the Escrow Funds for
Be's damages resulting from such breach.
Except for losses, damages, liabilities, costs and expenses, including
reasonable attorneys' fees, incurred by Be by reason of or arising out of or in
connection with fraud on the part of StarCode or the Shareholders, the total
liability of the Shareholders under this Agreement shall be limited
11.
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to the Escrow Funds and Be agrees that it shall look solely to the Escrow Funds
for the satisfaction of its claims against the Shareholders under this
Agreement, and Be further agrees that no Shareholder shall be personally liable
with respect to such claims beyond the interest of such Shareholder in the
Escrow Funds. This Section 5 sets forth the sole and exclusive remedy of Be
after the Closing with respect to any representation, warranty, covenant or
agreement made by StarCode or the Shareholders under this Agreement.
Notwithstanding anything to the contrary set forth in this Agreement,
Shareholders shall not be liable for any payment in respect of indemnification
pursuant to this Section 5 until such time as the total liability under this
Section 5 in the aggregate reaches $10,000 but then the Shareholders shall be
liable for any such liability in excess of $10,000, except that this
indemnification cap shall not apply to breaches arising out of or in connection
with fraud on the part of StarCode or the Shareholders.
In the event Be becomes aware of a third-party claim which Be believes may
result in a demand against the Escrow Funds, Be shall notify the Shareholders of
such claim, and the Shareholders shall be entitled, at their expense, to
participate in any defense of such claim. Be shall have the right in its sole
discretion to settle any such claim; provided, however, that except with the
consent of the Shareholders holding a majority of the Escrow Funds, which
consent shall not be unreasonably withheld, no settlement of any such claim with
third party claimants shall alone be determinative of the amount of any claim
against the Escrow Funds. In the event that the Shareholders have consented to
any such settlement and acknowledged that the claim is a valid claim against the
Escrow Funds, the Shareholders shall have no power or authority to object to the
amount of any claim by Be against the Escrow Funds with respect to such
settlement.
5.3 RELIANCE. No disclosure by any party to this Agreement nor any
investigation made by or in behalf of any party with respect to another party
shall be deemed to affect the party's reliance on the respective representations
and warranties contained in this Agreement and shall not effect a waiver of that
party's rights to indemnity as herein provided or the breach of any said
representations and warranties.
6. MISCELLANEOUS.
6.1 POST-CLOSING COVENANT. Be will use reasonable commercial efforts to
remove the Shareholders as guarantors of obligations of StarCode on or before
forty-five (45) days following the Closing and will indemnify such Shareholders
against any loss, damage, liability, expense or cost that such Shareholder
incurs as a result of such Shareholder being a guarantor of obligations of
StarCode. All such Shareholders and the contracts under which they are acting as
guarantors are listed on SCHEDULE 6.1 attached hereto.
6.2 FURTHER ASSURANCES. Each party will, upon request of the other,
execute and deliver all instruments and documents of further assurance or
otherwise, and perform all acts and things, which may be required to carry out
its obligations hereunder and to consummate and complete the transactions
contemplated by this Agreement.
6.3 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party hereto shall be in writing and shall be delivered
personally or sent by courier or
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express delivery service, by facsimile or by registered or certified mail,
postage prepaid, return receipt requested; if to StarCode addressed to the
President at the address set forth on page one of this Agreement, with a copy to
Thomas Furlong, at Gray Cary Ware & Freidenrich, 400 Hamilton Avenue, Palo Alto,
California 94301; if to Be addressed to the President, at the address set forth
on page one of this Agreement, with a copy to Andrei M. Manoliu, at Cooley
Godward LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California
94306; if to a Shareholder addressed to the address of the Shareholder listed
opposite the Shareholder's name on EXHIBIT A, or such other addresses as any
party may designate by written notice to the other parties. Any party may change
the name and address for receipt of its notices hereunder with notice to the
other parties.
6.4 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of California as such laws are applied to
agreements entered into and to be performed entirely within California between
California residents.
6.5 EXPENSES. If the stock purchase is not closed, each party shall pay
its respective expenses in connection with this transaction. Nothing in this
Section 6.5 is intended to affect any rights to indemnity under Section 5.
6.6 PARTIES-IN-INTEREST. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective heirs, administrators,
executors, successors and assigns; provided, however, that this Agreement may
not be assigned by any of the parties hereto.
6.7 ENTIRE AGREEMENT. This Agreement (including its Schedules and
Exhibits) and the confidentiality provisions of the Letter of Intent between the
parties dated April 7, 1998 constitute and contain the entire Agreement of the
parties and supersede any and all prior negotiations, correspondence,
understandings and agreements between the parties respecting its subject matter.
6.8 WAIVER. Any of the terms and conditions of this Agreement, and any
inaccuracies in any of the representations or warranties contained herein, may
be waived at any time and from time to time, in writing, by such parties as are
entitled to the benefit of such terms, conditions, warranties or
representations. Such waiver shall not constitute or be deemed a waiver of any
other terms, conditions or inaccuracies.
6.9 ATTORNEYS' FEES. If suit or action is filed by any party to enforce
this Agreement or otherwise with respect to the subject matter of this
Agreement, the prevailing party shall be entitled to recover from the
nonprevailing party all costs of such suit, including reasonable attorneys' fees
incurred in preparation for and prosecution of such suit or action as fixed by
the trial court, and if any appeal is taken from the decision of the trial
court, reasonable attorneys' fees as fixed by the appellate court.
6.10 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall be invalid, illegal, or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions of this
Agreement shall not be in any way impaired.
13.
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6.11 SCHEDULES. The Schedules referred to in this Agreement shall be the
Schedules described as such, and attached to this Agreement upon the execution
and delivery.
6.12 HEADINGS. The headings of the sections and subsections contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
6.13 COUNTERPARTS. This Agreement may be executed in several counterparts
and all of such counterparts shall constitute one and the same instrument with
the same force and effect as if all the parties had executed the same document.
14.
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IN WITNESS WHEREOF, the parties have executed this STOCK PURCHASE AGREEMENT
as of the date first written above.
BE INCORPORATED STARCODE SHAREHOLDERS
/s/ Jean-Louis Gassee /s/ Robert Biorn
-------------------------- -----------------------------
Authorized Signature Authorized Signature
Jean-Louis Gassee Robert A. Biorn, Trustee for Andrew R. Wollenberg
-------------------------- -------------------------------------------------
Printed Name Printed Name
President & CEO /s/ Robert Biorn
-------------------------- -----------------------------
Title Authorized Signature
CONFIRMED: Robert A. Biorn, Trustee for Blake E. Wollenberg
------------------------------------------------
STARCODE SOFTWARE, INC. Printed Name
/s/ Carlin Wiegner /s/ Carey Heckman
-------------------------- -----------------------------
Authorized Signature Authorized Signature
Carlin Wiegner Carey Heckman
-------------------------- -----------------------------
Printed Name Printed Name
President & CEO /s/ Michael Klingbeil
-------------------------- -----------------------------
Title Authorized Signature
Michael Klingbeil
-----------------------------
Printed Name
/s/ Kevin McBride
-----------------------------
Authorized Signature
Kevin McBride
-----------------------------
Printed Name
/s/ Mary McDermott
-----------------------------
Authorized Signature
Mary McDermott
-----------------------------
Printed Name
15.
<PAGE>
/s/ Carlin Wiegner
------------------------------
Authorized Signature
Carlin Wiegner
------------------------------
Printed Name
/s/ Edward Wiegner
------------------------------
Authorized Signature
Edward Wiegner
------------------------------
Printed Name
/s/ David Wollenberg
------------------------------
Authorized Signature
David Wollenberg
------------------------------
Printed Name
16.
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EXHIBIT A
STARCODE SHAREHOLDERS
<PAGE>
EXHIBIT B
FORM OF ESCROW AGREEMENT
<PAGE>
EXHIBIT C
FORM OF NONCOMPETITION AGREEMENT
<PAGE>
EXHIBIT D
FORM OF EMPLOYMENT AGREEMENT
<PAGE>
EXHIBIT E
FORM OF EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
<PAGE>
EXHIBIT F
FORM OF GENERAL RELEASE
<PAGE>
EXHIBIT G
STARCODE FINANCIAL STATEMENTS
<PAGE>
SCHEDULES