ACQUISITION AGREEMENT
______________________________________________________________________________
This Acquisition Agreement (the “Agreement”) is effective [DATE],
BETWEEN: [COMPANY NAME] (the "Company"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:
[YOUR COMPLETE ADDRESS]
[COMPLETE ADDRESS]
RECITALS
The Company operates a business known as [SPECIFY], that engages in the business of providing [SPECIFY] under the service mark [SPECIFY] on the [SPECIFY] (as defined in the Commercial Agreement described below), and selling [DESCRIBE].
The Company desires to sell to Purchaser, and Purchaser desires to purchase from the Company, substantially all of the assets of the [SPECIFY] Business in exchange for: (i) [NUMBER] shares of the Series [SPECIFY] Preferred Stock of Purchaser (the "ACQUISITION SHARES"); and (ii) the assumption by Purchaser of certain enumerated liabilities of the [SPECIFY] Business, in each case all on the terms and conditions set forth in this Agreement. In addition, in consideration for services to be rendered by the Company to Purchaser pursuant to the Operating Agreement (as defined below) in connection with the transfer of the [SPECIFY] Business to Purchaser, Purchaser will issue to the Company [NUMBER] shares of the Series [SPECIFY] Preferred Stock of Purchaser (the "SERVICES SHARES"). The Acquisition Shares and Services Shares are collectively referred to herein as the "TRANSACTION SHARES."
The Company, in its own name or in the name of [COMPANY NAME] ("the Company VENTURES"), currently holds [NUMBER] shares of Purchaser Common Stock (the "EXISTING PURCHASER SHARES") and a warrant to purchase an additional [NUMBER] shares of Purchaser Common Stock (the "EXISTING Company WARRANT"). As part of the transactions contemplated by this Agreement and the Commercial Agreement, the Existing Company Warrant will be amended to become exercisable for shares of Purchaser Series [SPECIFY] Preferred Stock (the "WARRANT SHARES") and the expiration date with respect to exercisability of the Existing Company Warrant will be subject to the provisions of the Commercial Agreement. Purchaser shall also grant The Company the right to exchange the Existing Purchaser Shares for a similar number of common-equivalent shares of Purchaser Series [SPECIFY] Preferred Stock.
The shares of each series of Purchaser Series [SPECIFY] Preferred Stock (collectively, the "PURCHASER PREFERRED SHARES") will have the rights, preferences and privileges described in the form of the Certificate of Determination attached hereto as Exhibit [SPECIFY] (the "CERTIFICATE OF DETERMINATION"). The Purchaser Preferred Shares may not be sold or otherwise transferred by the Company or any affiliate thereof, although such shares may be converted into shares of Purchaser Common Stock pursuant to the Certificate of Determination, whereupon the shares will only be subject to any applicable transfer restrictions under state and federal securities laws..
The Transaction Shares shall be issued to The Company either (i) in a private placement pursuant to the exemption provided by Section [NUMBER of the [YOUR COUNTRY] Securities [ACT/LAW/RULE], as amended (the "[DATE] ACT") or (ii) pursuant to the exemption from registration provided by Section [SPECIFY] of the [DATE] Act under which the parties will request the [YOUR COUNTRY] Department of Corporations of the State of [STATE/PROVINCE] (the "DEPARTMENT OF CORPORATIONS") to conduct a hearing for the purpose of determining whether the proposed issuance of the Transaction Shares in connection with the transactions contemplated herein is fair, just and equitable (the "FAIRNESS HEARING") and upon such a finding, to grant a permit qualifying such issuance (the "[STATE/PROVINCE] PERMIT").
The shares of Purchaser Common Stock issuable upon conversion of the Purchaser Preferred Shares (the "CONVERSION SHARES") that are not qualified under the [STATE/PROVINCE] Permit shall have all the registration rights set forth in the Registration Rights Agreement in the form attached hereto as Exhibit [SPECIFY] (the "REGISTRATION RIGHTS AGREEMENT"), and regardless of whether the Conversion Shares are qualified under the [STATE/PROVINCE] Permit, such shares shall have the Form [SPECIFY] demand and piggyback registration rights set forth in the Registration Rights Agreement.
The Purchaser Preferred Shares held by the Company shall be subject to the voting requirements set forth in that certain Voting Trust Agreement in the form attached hereto as Exhibit [SPECIFY] (the "VOTING TRUST AGREEMENT"), the sole intent of which will be to remove any class voting rights that would otherwise accrue to the Purchaser Preferred Shares.
The parties understand that the closing of the transactions contemplated by this Agreement is subject to a number of conditions. Pending the closing of the transactions contemplated under this Agreement, the parties will enter into an Operating Agreement in the form attached hereto as Exhibit [SPECIFY] (the "OPERATING AGREEMENT"), which will be binding upon the parties hereto from the date hereof until the Closing (as defined in Section 1.4) or earlier termination of this Agreement.
In connection with this Agreement, the parties are concurrently entering into a Technology License, Distribution, Services and Co-Marketing Agreement in the form attached hereto as Exhibit [SPECIFY] (the "COMMERCIAL AGREEMENT"). The Commercial Agreement, Operating Agreement, Registration Rights Agreement and Voting Trust Agreement are referred to herein as the "ANCILLARY AGREEMENTS."
NOW, THEREFORE, in consideration of the above recitals and the mutual covenants hereinafter set forth, Purchaser and THE COMPANY hereby agree as follows:
As used in this Agreement, the phrase "as it is proposed to be conducted following the date hereof" shall mean the conduct of the [SPECIFY] Business as if it were to be continued in substantially the same manner in which it is currently being run by the Company, except that the party owning the [SPECIFY] Business will be Purchaser and that the volume of transactions processed by the [SPECIFY] Business will be consistent with projections provided by the Company, provided however, that the parties recognize that additional system capacity may be required to accommodate such projections, and provided further, that the parties recognize that
Subject to the terms and conditions of this Agreement, and in reliance on the representations, warranties and covenants set forth in this Agreement, The Company agrees to sell, assign, transfer and convey to Purchaser at the Closing (as defined in Section 1.4), and Purchaser agrees to purchase and acquire from the Company at the Closing, all of the Company's right, title and interest in and to all of the [SPECIFY] Assets. The [SPECIFY] Assets will be sold, assigned, transferred and conveyed to Purchaser on the Closing Date, free and clear of all mortgages, pledges, liens, licenses, rights of possession, security interests, restrictions, encumbrances, charges, title retention, conditional sale or other security arrangements and all claims or agreements of any nature whatsoever, except as otherwise expressly disclosed on the the Company Exceptions Letter (as defined below). The [SPECIFY] Assets to be purchased by Purchaser under this Agreement shall consist of the following assets and properties owned or controlled by the Company on the date hereof or on the Closing Date:
The consummation of the purchase and sale of the [SPECIFY] Assets and the delivery of the consideration therefore will take place at a closing to be held at the offices of Purchaser's counsel, [COMPANY NAME], [FULL ADDRESS], [STATE/PROVINCE] (the "CLOSING") on [DATE] or the earliest practicable and mutually agreeable date following the satisfaction or waiver of the conditions to closing set forth in Section 8 hereof (the "CLOSING DATE"), or at such other time or date, and at such place, or by such other means of exchanging documents, as may be agreed to by the [COMPANY NAME] hereto.
At or within [NUMBER] days following the Closing, The Company shall have the right to exchange all or a portion of the Existing Purchaser Shares for a similar number of common-equivalent Purchaser Series [SPECIFY] Preferred Shares with the rights, preferences and privileges described in the form of the Certificate of Determination attached hereto as Exhibit [SPECIFY]. Such exchange shall be effectuated by the surrender by the Company within the time period referenced above of the stock certificate(s) representing the Existing Purchaser Shares to Purchaser along with a notice requesting Purchaser to issue the appropriate number of Purchaser Series [SPECIFY] Preferred Shares to the Company, whereupon Purchaser or Purchaser's transfer agent shall cancel the certificate(s) representing the Existing Purchaser Shares and issue the certificate(s) for the Purchaser Series [SPECIFY] Preferred Shares. The date of the certificate(s) for the Purchaser Series [SPECIFY] Preferred Shares shall be the date on which Purchaser or Purchaser's transfer agent receives the certificates for the Existing Purchaser Shares that are being surrendered.
In consideration of the sale, transfer, conveyance and assignment of all the [SPECIFY] Assets to Purchaser at the Closing and the other consideration provided by The Company hereunder, as of the Closing:
The Company shall have certain registration rights with respect to the shares of Purchaser Common Stock issuable upon conversion of the Purchaser Preferred Shares, as more fully set forth in the Registration Rights Agreement and Section 6.3 hereof.
Any sales or use tax liability that arises with respect to the transfer of the [SPECIFY] Assets from the Company to Purchaser will be borne equally by the Company and Purchaser.
The following liabilities of the Company related to the [SPECIFY] Business expressly listed below in this Section 3.1 will be assumed by Purchaser (collectively, the "ASSUMED LIABILITIES"):
Except as expressly set forth in Section 3.1 above, Purchaser shall not assume or become obligated in any way to pay any liabilities, debts or obligations of the Company or of the [SPECIFY] Business whatsoever, including but not limited to any liabilities or obligations now or hereafter arising from or with respect to, any current or future outstanding options to purchase the Company Common Stock, the sale or license of any products or services of the Company that occurred prior to the Closing, the termination by the Company of the employment of any current or future employees of the Company or any of its affiliates, any other claims brought against the Company arising from the Company's employment of any person, any duties or obligations under any existing or future employee benefit plans of the Company or any of its affiliates, any present or future obligations or liabilities of the Company or any of its affiliates to existing or future employees of the Company or any of its affiliates under the [YOUR COUNTRY] Consolidated Omnibus Budget Reconciliation [ACT/LAW/RULE], as amended ("COBRA"),
The [YOUR COUNTRY] Federal Worker Adjustment and Retraining [ACT/LAW/RULE] ("WARN") or any severance pay obligations of the Company or any of its affiliates or any obligations or liabilities or arising from any breach or default by the Company of any contract, agreement or commitment of the Company (including but not limited to the Contracts that occurred (or arose from facts occurring) prior to the Closing). All liabilities, debts and obligations of the Company not expressly assumed by Purchaser hereunder are hereinafter referred to as the "EXCLUDED LIABILITIES".
The execution and delivery of this Agreement shall not be deemed to confer any rights upon any person or entity other than the parties hereto, or make any person or entity a third party beneficiary of this Agreement, or to obligate the parties to any person or entity other than the parties to this Agreement. Assumption by Purchaser of any liabilities or obligations of the Company under Section 3.1 shall in no way expand the rights or remedies of third parties against Purchaser as compared to the rights and remedies such parties would have against the Company if the Closing were not consummated.
Purchaser hereby represents and warrants to the Company that except as set forth on the Purchaser Disclosure Letter delivered concurrently herewith, all the following statements are true, accurate and correct:
Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of [STATE/PROVINCE], and has the corporate power and authority to own, operate and lease its properties and to carry on its business as now conducted and as proposed to be conducted, and is qualified as a foreign corporation in each jurisdiction in which a failure to be so qualified could reasonably be expected to have a material adverse effect on its present operations or financial condition.
Neither the execution and delivery of this Agreement nor any Purchaser Ancillary Agreement, nor the consummation of the transactions contemplated hereby or thereby, will conflict with, or (with or without notice or lapse of time, or both) result in a termination or material breach or violation of
Purchaser has made available to the Company an investor disclosure package consisting of true and complete copies of
The authorized capital stock of Purchaser consists of [NUMBER] shares of Common Stock and [NUMBER] shares of Preferred Stock. [NUMBER] shares of Purchaser Common Stock were issued and outstanding and no shares of Purchaser Preferred Stock were outstanding as of [DATE]. An aggregate of [NUMBER] shares of Purchaser Common Stock are reserved and authorized for issuance pursuant to the Purchaser [YEAR] Equity Incentive Plan, an aggregate of [NUMBER] shares of Purchaser Common Stock are reserved and authorized for issuance pursuant to the Purchaser [YEAR] Equity Incentive Plan, an aggregate of [NUMBER] shares of Purchaser Common Stock are reserved and authorized for issuance pursuant to the Purchaser [YEAR] Directors Stock Option Plan, and an aggregate of [NUMBER] shares of Purchaser Common Stock are reserved and authorized for issuance pursuant to the Purchaser [YEAR] Employee Stock Purchase Plan (all such plans are referred to herein as the "STOCK PLANS").
As of [DATE], options to purchase [NUMBER] shares of Purchaser Common Stock were outstanding under the Stock Plans and no options have been issued outside of the Stock Plans. Without giving effect to the transactions contemplated hereby, warrants to purchase [NUMBER] shares of Purchaser Common Stock are outstanding. All issued and outstanding shares of Purchaser Common Stock have been duly authorized and validly issued, are fully paid and non assessable, are not subject to any right of rescission, and have been offered, issued, sold and delivered by Purchaser in compliance with all registration or qualification requirements (or applicable exemptions therefrom) of applicable federal and state securities laws.
Except as set forth in this Section 4.5, there are no options, warrants, calls, commitments, conversion privileges or preemptive or other rights or agreements outstanding to purchase any of Purchaser's authorized but unissued capital stock or any securities convertible into or exchangeable for shares of Purchaser Capital Stock or obligating Purchaser to grant, extend, or enter into any such option, warrant, call, right, commitment, conversion privilege or other right or agreement, and there is no liability for dividends accrued but unpaid. There are no voting agreements, rights of first refusal or other restrictions (other than normal restrictions on transfer under applicable federal and state securities laws applicable to any of Purchaser's outstanding securities. Purchaser is not under any obligation to register under the [YOUR COUNTRY] Securities [ACT/LAW/RULE] any securities that may be subsequently issued.
There is no claim, action, suit or proceeding pending or, to Purchaser's knowledge, threatened, against Purchaser, at law, in equity, by way of arbitration or before any governmental department, commission, board or agency that might have a material adverse effect on Purchaser, nor is Purchaser aware of any reasonable basis therefore. There are no judgments, decrees, injunctions or orders of any court, governmental department, commission, agency, instrumentality or arbitrator against Purchaser.
The Company represents and warrants to Purchaser that, except as set forth in the Company Disclosure Letter delivered concurrently with the execution hereof, all of the following statements are true, accurate and correct:
The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of [STATE/PROVINCE]. The Company is duly qualified to transact business as a foreign corporation, and is in good standing, in all jurisdictions where the failure to be so qualified would adversely affect the [SPECIFY] Business. The Company has all necessary corporate power and authority to own and use the [SPECIFY] Assets and to operate the [SPECIFY] Business and to enter into this Agreement and all assignments or other documents that the Company is required to execute and deliver hereunder, including without limitation the Ancillary Agreements (the " the Company ANCILLARY AGREEMENTS"), and holds all permits, licenses, orders and approvals of all federal, state and local governmental or regulatory bodies necessary and required therefore. For purposes of this Section 5.1 and with respect to Section 5.2, each representation and warranty given herein and therein shall be deemed, as applicable, a separate representation and warranty of each of the Company (not including Subsidiary) and Subsidiary.
The execution, delivery and performance by the Company of this Agreement and the Company Ancillary Agreements, and the consummation of all the transactions contemplated hereby and thereby, have been duly and validly authorized by the Company by all necessary corporate action of the Company's Board of Directors and shareholders. This Agreement and the Company Ancillary Agreements, when executed and delivered by the Company, will be duly and validly executed and delivered and will be the valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as to the effect, if any, of
Neither the execution and delivery of this Agreement or the Company Ancillary Agreements by the Company, nor the performance by the Company of its obligations under this Agreement or the Company Ancillary Agreements, will
The Company has good and marketable title to all of the [SPECIFY] Assets, free and clear of all mortgages, pledges, liens, licenses, rights of possession, security interests, restrictions, encumbrances, charges, title retention, conditional sale or other security arrangements and all claims or agreements of any nature whatsoever. Title to all the [SPECIFY] Assets is freely transferable from the Company to Purchaser without obtaining the consent or approval of any person or party.
Included as Schedule 5.4 to the Company Disclosure Letter is a complete list of the Company's employees whose work relates directly to the [SPECIFY] Business as of the date hereof, including, with respect to each full-time employee a description of the title and responsibilities of each such employee, the current compensation payable to each such employee, the date of hire and the date and amount of last compensation adjustment and any contract, agreement, understanding or ongoing commitment of the Company to such employee, whether or not in written form, and with respect to each part-time employee a description of the title and responsibilities of each such employee.
Schedule [SPECIFY] to the [SPECIFY] Assets Letter contains a complete list of all [SPECIFY] Tangible Assets, and such list sets forth all of the tangible assets required to conduct the [SPECIFY] Business as presently conducted and as it is proposed to be conducted following the date hereof. As of the Closing, all of the material [SPECIFY] Tangible Assets will be in good working condition and repair, ordinary wear and tear excepted.
There is no claim, action, suit or proceeding pending or, to the Company's knowledge, threatened, against the Company (including but not limited to any claim, action, suit or proceeding relating to or affecting the [SPECIFY] Business or the [SPECIFY] Assets), at law, in equity, by way of arbitration or before any governmental department, commission, board or agency that might have a material adverse effect on the [SPECIFY] Business or the [SPECIFY] Assets, nor is the Company aware of any reasonable basis therefore. There are no judgments, decrees, injunctions or orders of any court, governmental department, commission, agency, instrumentality or arbitrator against the Company affecting the [SPECIFY] Assets or the [SPECIFY] Business.
Schedule 5.7, attached to the [SPECIFY] Assets Letter, lists and describes all contracts, agreements, understandings and commitments of the Company directly related to the [SPECIFY] Business, whether written or oral (other than oral agreements to employ employees of the Company):
The Company is not in violation, breach or default of any of the Material [SPECIFY] Contracts. The Company has delivered to Purchaser a true and correct copy of each written [SPECIFY] Contract included in the [SPECIFY] Assets and listed on Schedule [SPECIFY]. The Company has obtained, or by Closing will obtain, all written consents of third parties required to assign and transfer all Material [SPECIFY] Contracts to Purchaser without the breach or violation of any such Material [SPECIFY] Contract. The Material [SPECIFY] Contracts, together with the Commercial Agreement and this Agreement, constitute in every material respect, sufficient contractual rights to continue to operate the [SPECIFY] Business in the manner in which it has been previously conducted by the Company and as it is proposed to be conducted following the date hereof. The Company has not entered into any contracts, agreements, understandings or commitments directly related to the [SPECIFY] Business, whether written or oral, outside of the ordinary course of business since [DATE].
Schedule [SPECIFY] of the Company Disclosure Letter sets forth all Intellectual Property used to conduct the [SPECIFY] Business as it is now being conducted by the Company, and such [SPECIFY] Intellectual Property is sufficient to conduct the [SPECIFY] Business as it is now being conducted and as it is proposed to be conducted following the date hereof, in every material respect. The Company owns, possesses, has the exclusive right to make, use, sell and license, has the right to bring actions for the infringement of, and where necessary, has made timely and proper application for protection of, all [SPECIFY] Intellectual Property rights that are used in the [SPECIFY] Business or that comprise a portion of the [SPECIFY] Assets. The Company has not granted any third party any outstanding licenses or other rights to any of the [SPECIFY] Intellectual Property and the Company is not liable, nor has it made any contract or arrangement whereby it may become liable, to any person for any royalty or other compensation for the use of any [SPECIFY] Intellectual Property.
The Company has not received notice of any claim that any [SPECIFY] Intellectual Property infringes any Intellectual Property right of any third party and there is no basis for such claim known to the Company. All employees and consultants of the Company and any other third [COMPANY NAME] who have been involved in product development for the Company have executed invention assignment agreements and all employees and consultants who have access to confidential or trade secret information concerning the Company's technology or products have executed nondisclosure agreements, each substantially similar to the form of agreement attached hereto as Schedule 5.8. To the best of the Company's knowledge, no former employee or consultant of the Company has possession of any software (in source code or object code form) that is owned by the Company and used in the [SPECIFY] Business.
The [SPECIFY] Assets, as described in Section 1.2 and listed on Schedules 1.2(a) through (e), constitute in every material respect, all of the assets that have been used in the operation of the [SPECIFY] Business, and that are sufficient to continue to operate the [SPECIFY] Business in the manner in which it has been conducted by the Company prior to the date hereof and as it is proposed to be conducted following the date hereof.
In the operation of the [SPECIFY] Business, the Company has, to the best of the Company's knowledge, duly complied with all applicable laws, rules, regulations and orders of federal, state, local and foreign governments (including but not limited to all export control laws and regulations of the [COUNTRY] or any governmental, authority or agency of the [COUNTRY] government), except where the failure to comply would not have a materially adverse effect on the [SPECIFY] Assets or the [SPECIFY] Business, and the Company is not in default with respect to any order, judgment, writ, injunction, decree, award, rule or regulation of any court, governmental or regulatory body or arbitrator which restrains or limits the operations of the [SPECIFY] Business or the use of the [SPECIFY] Assets.
There are no agreements between any union, labor organization or other collective bargaining agent in respect of any employee of the Company who is involved with the [SPECIFY] Business. The relations between the Company and the employees of the [SPECIFY] Business are generally good in that the [SPECIFY] business has not experienced excessive turnover and the employees of the [SPECIFY] Business are generally supportive of management's goals.
Except for filings required under [YOUR COUNTRY] federal antitrust [ACT/LAW/RULE], no authorization, approval, consent of, or filing with any governmental department, bureau, agency, public board, authority or other third party is required for the consummation by the Company of the transactions contemplated by this Agreement.
At the Closing, and upon the date of any subsequent transfer of [SPECIFY] Assets to Purchaser in accordance with this Agreement, there will be no federal, state or local tax liens against any of the [SPECIFY] Assets to be transferred to Purchaser hereunder. The Company has paid or will pay, when due, any federal, state or local taxes attributable to periods prior to the Effective Date with respect to the [SPECIFY] Assets or the [SPECIFY] Business, which, if unpaid, may result in a lien against any of the [SPECIFY] Assets.
No representation or warranty by the Company in this Agreement, and no document, written statement, certificate or schedule furnished or to be furnished to Purchaser by (or on behalf of) the Company pursuant thereto, when construed together with all other such representations, warranties, documents, written statements, certificates or schedules contains, or will, when furnished, contain, any untrue statement of a material fact, or omits, or will then omit to state, a material fact necessary to make any statement of facts contained herein or therein not materially misleading.
There have been no events or transactions, or information which has come to the attention of the Company which, as related directly to the [SPECIFY] Business or the [SPECIFY] Assets, could reasonably be expected to have a material adverse effect on the business, operations, affairs, prospects or condition of the [SPECIFY] Business or the [SPECIFY] Assets other than for general economic or industry conditions or trends.
To the Company's knowledge, without any independent investigation, the facilities in which the [SPECIFY] Business operates (the "FACILITIES") are not in violation of any federal, state or local laws, ordinance or regulation relating to disposal of Hazardous Materials (as defined below) or the environmental conditions on or under such properties or facilities, including but not limited to, soil and groundwater conditions. During the time the company has owned, leased or occupied the Facilities, the Company has not used, generated, manufactured or stored on or under any part of the Facilities, or transported to or from any part of the Facilities, any Hazardous Materials in violation of CERCLA (as defined below) or any other applicable state or federal environmental [YOUR COUNTRY LAW].
THE COMPANY has no knowledge of any presence, disposals, releases or threatened releases of any Hazardous Materials on, from or under any part of the Facilities. For purposes of this Section, "HAZARDOUS MATERIALS" means any hazardous or toxic substance, material or waste that is, or becomes prior to the Closing, regulated or defined as a "hazardous substance," "pollutant", "contaminant", "toxic chemical", "hazardous material", "toxic substance" or "hazardous chemical" or similar hazardous substance under the [YOUR COUNTRY] Comprehensive Environmental Response, Compensation and Liability [ACT/LAW/RULE], as amended ("CERCLA"), or any other similar state or federal [NUMBER], statute, ordinance, rule or regulation having a scope of purpose similar to that of CERCLA.
The Company hereby represents and warrants to Purchaser, with respect to the Purchaser Preferred Shares, as follows:
THE SECURITIES REPRESENTED HEREBY
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES [YOUR COUNTRY LAW] ACT OF [YEAR], AS AMENDED (THE "ACT"), OR UNDER THE [YOUR COUNTRY] SECURITIES
Neither the Company nor any of its affiliates has employed any broker, finder or agent, or agreed to pay or incurred any brokerage fee, finder's fee or commission with respect to the transactions contemplated by this Agreement, or dealt with anyone purporting to act in the capacity of a broker, finder or agent with respect thereto as a result of which any claim for a fee can be asserted against Purchaser.
Purchaser covenants and agrees with the Company as follows:
All copies of financial information, marketing and sales information, pricing, marketing plans, business plans, financial and business projections, manufacturing processes and procedures, formulae, methodologies, inventions, product designs, product specifications and drawings, and other confidential and/or proprietary information of the Company disclosed to Purchaser in connection with the transactions contemplated by this Agreement ("THE COMPANY CONFIDENTIAL INFORMATION") will be held in confidence and not used or disclosed by Purchaser or any of its employees, affiliates or stockholders for a period of [NUMBER] years from the Effective Date and will be promptly destroyed by Purchaser or returned to the Company, upon the Company's written request to Purchaser; provided, however that from and after the Closing, the foregoing covenant shall not be applicable to the Company Confidential Information related to the [SPECIFY] Business that is included in the [SPECIFY] Assets.
Purchaser's employees, affiliates and stockholders will not be given access to the Company Confidential Information from and after the Closing other than the Company Confidential Information related to the [SPECIFY] Business that is included in the [SPECIFY] Assets, except on a "need to know" basis. It is agreed that the Company Confidential Information will not include information that:
Promptly after execution of this Agreement, Purchaser shall cooperate with the Company to prepare and file such notifications as are required pursuant to the [COMPANY NAME] Pre-Merger Notification [YOUR COUNTRY] Act of [YEAR] (the "[COMPANY NAME] ACT"). Purchaser and the Company shall share the filing fees of such filings equally.
Purchaser shall request the Department of Corporations to conduct a Fairness Hearing and upon agreement of the Department of Corporations to do so, make all necessary filings in a timely manner and take all necessary measures as soon as practicable to facilitate the granting by the Department of Corporations of the [STATE/PROVINCE] Permit. If Purchaser is unable to obtain, for whatever reason, the [STATE/PROVINCE] Permit or if existing law is interpreted to the effect that the [STATE/PROVINCE] Permit does not provide an exemption from registration under the [YOUR COUNTRY] [YEAR] Act, Purchaser shall file a shelf registration statement on Form [SPECIFY] with respect to the shares of Purchaser Common Stock into which the Transaction Shares are convertible, in the time period and as further provided in the Registration Rights Agreement. All of the shares of Purchaser Common Stock into which the Transaction Shares are convertible shall be entitled to certain demand and piggyback registration rights as further provided in the Registration Rights Agreement.
Purchaser shall use reasonable best efforts to satisfy the conditions to the Company's obligations set forth in Sections 8.1 and 8.3 prior to [DATE], provided however that Purchaser's failure to satisfy such conditions shall not be deemed a breach of this Agreement.
Purchaser will use all reasonable efforts to have the holders of a sufficient number of the voting shares of Purchaser stock execute a voting agreement (or provide another instrument with the same effect) to ensure the election of a representative of the Company to the Board of Directors of Purchaser for so long as the Company holds at least [NUMBER] shares of Purchaser Common Stock on an as converted to Common Stock basis and as adjusted for stock splits, reclassifications, recapitalizations and similar events.
The covenants set forth in Section 6.2 shall survive the Closing. The covenants set forth in Section 6.1 above shall survive the termination of this Agreement for any reason.
The Company covenants and agrees with Purchaser as follows:
From the date hereof to the Closing Date, the Company will afford to the representatives of Purchaser, including its counsel and auditors, during normal business hours, access to any and all of the [SPECIFY] Assets and information with respect to the [SPECIFY] Business to the end that Purchaser may have a reasonable opportunity to make such a full investigation of the [SPECIFY] Assets and of the [SPECIFY] Business in advance of the Closing Date as it shall reasonably desire, and the officers of the Company will confer with representatives of Purchaser and will furnish to Purchaser, either orally or by means of such records, documents, and memoranda as are available or reasonably capable of preparation, such information as Purchaser may reasonably request, and the Company will furnish to Purchaser's auditors all consents and authority that they may reasonably request in connection with any examination of Purchaser. In addition, the Company will afford the Purchaser's representatives, including its counsel and auditors, reasonable access to the Facilities and all [SPECIFY] Assets located at the Facilities at reasonable times.
Prior to the Closing Date, the Company shall obtain the consent in writing of all persons necessary to permit the Company to assign and transfer all of the [SPECIFY] Assets (including but not limited to the [SPECIFY] Contracts) to Purchaser, free and clear of all liens, security interests, restrictions, claims and encumbrances (other than the Assumed Liabilities) and to perform its obligations under, and to conclude the transactions contemplated by, this Agreement in order that the performance hereof will not result in the termination of, or any violation, breach or default under, any [SPECIFY] Contracts or any material contracts, loans, notes, agreements, obligations, leases, permits or licenses to which the Company is a party or by which any of the Company’s property is bound. Notwithstanding the foregoing, the Company shall only be required to use all reasonable efforts to obtain the rights for Purchaser to use the [SPECIFY] licenses covering all existing service and development [SPECIFY] for the [SPECIFY], provided that the scope of such rights shall be as reasonably requested by Purchaser.
From and after the Closing Date, the Company shall promptly execute and deliver to Purchaser any and all such further assignments, licenses, endorsements and other documents as Purchaser may reasonably request for the purpose of effecting the transfer of the Company's title to the [SPECIFY] Assets to Purchaser and/or carrying out the provisions of this Agreement and the Ancillary Agreements, including, but not limited to, granting Purchaser a non-exclusive, world-wide, perpetual, transferable, irrevocable and royalty-free license to make use of any and all the Company Intellectual Property not included in the [SPECIFY] Assets to the extent necessary or desirable to allow Purchaser to fully exploit the [SPECIFY] Assets and the [SPECIFY] Business.
Subject to the Company's rights (if any) under the Operating Agreement, after the Closing Date, the Company shall cease to use the trademark and trade name [SPECIFY] or any similar name, without the prior written consent of Purchaser. The Company hereby grants Purchaser the rights to use the [SPECIFY] trademark and tradename after the date hereof and until the Closing.
All copies of financial information, marketing and sales information, pricing, marketing plans, business plans, financial and business projections, manufacturing processes and procedures, formulae, methodologies, inventions, product designs, product specifications and drawings, and other confidential and/or proprietary information of Purchaser disclosed to the Company in connection with the transactions contemplated by this Agreement ("PURCHASER CONFIDENTIAL INFORMATION") will be held in confidence and not used or disclosed by the Company or any of its employees, affiliates or stockholders for a period of [NUMBER] years from the Effective Date and will be promptly destroyed by the Company or returned to Purchaser, upon Purchaser's written request to the Company.
The Company's employees, affiliates and stockholders will not be given access to Purchaser Confidential Information except on a "need to know" basis. It is agreed that Purchaser Confidential Information will not include information that:
At Purchaser's request, the Company shall cooperate with Purchaser in identifying those of the Company's employees that are currently employed in connection with the [SPECIFY] Business that Purchaser may wish to hire either as employees or consultants (including, but not limited to, [INDIVIDUAL NAMES]) and in facilitating the employment or the engagement as consultants by Purchaser, after the Closing Date, of such individuals (including any employees who become such after the Effective Date), which Purchaser elects to employ or engage as a consultant, including permitting Purchaser to interview and offer employment or consulting agreements to such employees.
The parties hereby acknowledge that Purchaser is under no obligation whatsoever to employ any current or future employees of the Company or any of its affiliates and that the Company and its affiliates alone remain responsible for all obligations and liabilities, whether arising under statute, regulation or contract, to present and future employees of the Company and its affiliates arising out of their employment (or the termination of their employment) with the Company or any of the Company's affiliates, including but not limited to any obligations and liabilities arising under or from any existing or future Employee Plans or other employee benefit plans of the Company or any of its affiliates, any present or future obligations or liabilities of the Company or any of its affiliates to existing or future employees of the Company under [YOUR COUNTRY] COBRA or WARN or any severance pay obligations of the Company or any of its affiliates.
Promptly after execution of this Agreement, the Company shall cooperate with Purchaser to prepare and file such notifications as are required pursuant to the [SPECIFY] Act. Purchaser and the Company shall share the filing fees of such filings equally.
The Company shall use reasonable best efforts to satisfy the conditions to Purchaser's obligations set forth in Sections 8.1 and 8.2 prior to [DATE], provided however that the Company's failure to satisfy such conditions shall not be deemed a breach of this Agreement.
Within [NUMBER] days of the date hereof, the Company shall deliver to Purchaser revised Schedules 1.2(a) and 5.7 that will contain all contracts, agreements, understandings and commitments of THE COMPANY directly related to the [SPECIFY] Business, whether written or oral, and all Material [SPECIFY] Contracts, that were not included on the Schedule 1.2(a) and 5.7, respectively, delivered to Purchaser and in its possession as of [DATE].
Prior to the Closing, the Company will cause [COMPANY NAME] to execute and deliver all necessary consents and approvals necessary to effectuate the transactions contemplated hereby.
Each of the covenants set forth in Sections 7.3, 7.4, 7.6 and this Section 7.11 shall survive the Closing. The covenants set forth in Section 7.5 above shall survive the termination of this Agreement for any reason. The remaining covenants of this Section 7 shall expire at the Closing or other termination of this Agreement.
The obligations of each of Purchaser and the Company hereunder shall be subject to the satisfaction and fulfillment of each of the following conditions, except as either party may expressly waive in writing (but only with respect to such party's own obligations hereunder):
The obligations of Purchaser hereunder shall be subject to the satisfaction and fulfillment of each of the following conditions, except as Purchaser may expressly waive the same in writing:
that it shall not be a condition to Purchaser's obligations that certain representations and warranties made herein by the Company in Section 5 (as qualified by the Company Disclosure Letter) and which are specifically identified on Exhibit [SPECIFY] shall be true and correct in all material respects, and not misleading in any material respect, on and as of the Closing Date with the same force and effect as though such representations and warranties were made on and as of the Closing Date, if the reason why such representations and warranties can not be reasserted as of the Closing Date is because Purchaser has assumed the operation of the [SPECIFY] Business after the date hereof.
The obligations of the Company hereunder shall be subject to the satisfaction and fulfillment of each of the following conditions, except as the Company may expressly waive the same in writing:
All representations and warranties made by the Company or Purchaser herein, or in any certificate, schedule or exhibit delivered pursuant hereto, shall survive the Closing for a period of [NUMBER] year after [DATE]; provided however, that the representations and warranties made by the Company in Sections 5.7, 5.8 and 5.9 shall survive the Closing for a period of [NUMBER] years after [DATE] and provided further that representations, warranties and covenants involving intentional fraud or willful misconduct shall survive the Closing until the applicable statute of limitations has expired.
For the purpose of this Section 9.2 and when used elsewhere in this agreement, "LOSS" shall mean and include any and all liability, loss, damage, claim, expense, cost, fine, fee, penalty, obligation or injury including, without limitation, those resulting from any and all actions, suits, proceedings, demands, assessments, judgments, award or arbitration, together with reasonable costs and expenses including the reasonable attorneys' fees and other legal costs and expenses relating thereto; provided, however, that Loss shall not include punitive or exemplary damages.
Subject to the provisions and limitations set forth in this Section 9, the Company agrees to defend, indemnify and hold harmless Purchaser, any parent, subsidiary or affiliate of Purchaser and any director, officer, employee, stockholder, agent or attorney of Purchaser or of any parent, subsidiary or affiliate of Purchaser (collectively, the "PURCHASER INDEMNITEES") from and against any Loss which arises out of or results from:
Subject to the provisions and limitations set forth in this Section 9, Purchaser agrees to defend, indemnify and hold harmless the Company, any parent, subsidiary or affiliate of the Company and any director, officer, employee, stockholder, agent or attorney of the Company or of any parent, subsidiary or affiliate of the Company (collectively, the "the Company INDEMNITEES") from and against and in respect of any Loss which arises out of or results from:
If any action, suit or proceeding shall be commenced against, or any claim or demand be asserted against, the Company or Purchaser, as the case may be, in respect of which the Company or Purchaser is entitled to demand indemnification under Section 9 of this Agreement, then as a condition precedent thereto, the party seeking indemnification ("INDEMNITEE") shall promptly notify the other party ("INDEMNITOR") in writing to that effect, and with reasonable particularity and with reference to the applicable provision(s) of this Agreement.
The Indemnitor shall have the right to assume the entire control of the defense, compromise or settlement of such action, suit, proceeding or claim and including the selection of counsel, subject to the right of the Indemnitee to participate (at its expense and with counsel of its choice) in the defense, compromise or settlement of such action, suit, proceeding, claim or demand, and in connection therewith, the Indemnitee shall cooperate fully in all respects with the Indemnitor in any such defense, compromise or settlement.
The Indemnitor will not compromise or settle any such action, suit, proceeding, claim or demand without the prior written consent of the Indemnitee, which consent will not be unreasonably withheld or delayed. So long as the Indemnitor is defending in good faith any such action, suit, proceeding, claim or demand asserted by a third party against the Indemnitee, the Indemnitee shall not settle or compromise such action, suit, proceeding, claim or demand without the prior written consent of the Indemnitor, which consent will not be unreasonably withheld or delayed. The Indemnitee shall make available to the Indemnitor or its agents all records and other materials in the Indemnitee's possession reasonably required for contesting any third party claim or demand.
If the Indemnitor shall fail to promptly and adequately defend any such action, suit, proceeding, claim or demand, then the Indemnitee may defend, through counsel of its own choosing, such action, suit, proceeding, claim or demand and (so long as Indemnitee gives the Indemnitor at least [NUMBER] days' notice of the terms of the proposed settlement thereof and permits the Indemnitor to then undertake the defense thereof if Indemnitor objects to the proposed settlement) to settle such action, suit, proceeding, claim or demand and to recover from the Indemnitor the amount of such Losses.
A claim or claims for indemnification under this Section 9 must be brought, if at all, at any time within [NUMBER] year after [DATE], provided however, that any claim or claims for indemnification for breaches of the representations and warranties made by the Company in Sections 5.7, 5.8 and 5.9 may be brought at any time within [NUMBER] years after [DATE], and any claim or claims for indemnification resulting from breaches of the representations, warranties and covenants made herein involving intentional fraud or willful misconduct may be brought at any time until the applicable statute of limitations (including extensions) has expired.
Except with respect to the covenants contained in Sections 6.1, 7.3 and 7.5, for which injunctive relief shall be available, the indemnification provided for in this Section 9 shall be the sole remedy with respect to any claims arising under this Agreement.
At the Closing, this Agreement may be terminated and abandoned:
Effective upon the Closing, Section [SPECIFY] of the Series [SPECIFY] Preferred Stock Purchase Agreement (the "PURCHASE AGREEMENT") shall be amended as follows:
The first sentence of Section [NUMBER] of the Purchase Agreement shall be amended in its entirety as follows:
Without the written consent of the Company, [COMPANY NAME], [COMPANY NAME], and their respective affiliates (collectively, the "[SPECIFY] Investors"), each agrees not to acquire any additional shares of the Company's Voting Securities (as defined below) in the open market or otherwise if and to the extent such acquisition results in
The first sentence of Section [SPECIFY] of the Purchase Agreement shall be amended in its entirety as follows:
To the extent not prohibited by a nondisclosure agreement, the Company shall promptly notify each [SPECIFY] Investor in the event that the Company enters into any bona fide discussions with any third party, which the Company reasonably believes will result in a Control Transaction (as defined below). Notwithstanding the foregoing, the Company will provide notice to each [SPECIFY] Investor at least [NUMBER] calendar days prior to entering into a binding definitive agreement with respect to a Control Transaction, and will further notify each [SPECIFY] Investor after such discussions terminate.
Section [SPECIFY] of the Purchase Agreement shall be amended in its entirety as follows:
Each [SPECIFY] Investor's obligations shall terminate upon the making of a bona fide offer by any third party or group, of an intention to acquire Voting Securities of the Company which, if successful, would not be covered under [SPECIFY] above and would result in such party or group owning or having the right to acquire beneficial ownership of more than [PERCENTAGE %] of the Company's Voting Securities.
The definition of "Voting Securities" set forth in Section [NUMBER] of the Purchase Agreement shall be amended in its entirety as follows:
"Voting Securities" shall mean the shares of Common Stock and Preferred Stock of the Company and in addition, any other securities of the Company convertible into or exerciseable for Common Stock which have a conversion or exercise price less than the market price of the Company's Common Stock at the time any additional share of Common Stock or other Company securities are acquired, but shall not include options exerciseable for Common Stock held by employees of the Company.
Except as expressly amended hereby, all other terms and conditions of the Purchase Agreement shall remain in full force and effect.
Each of the parties hereto shall bear its own expenses (including without limitation attorneys' fees) in connection with the negotiation and consummation of the transactions contemplated hereby.
Any notice required or permitted to be given under this Agreement shall be in writing and shall be personally or sent by certified or registered [COUNTRY] mail, postage prepaid, or sent by nationally recognized overnight express courier and addressed as follows:
(a) if to Purchaser, at:
[COMPANY NAME]
[FULL ADDRESS], [STATE/PROVINCE]
Attention: President
Facsimile: [FAX NUMBER]
With a copy to:
[COMPANY NAME]
[FULL ADDRESS], [STATE/PROVINCE]
Attention: [INDIVIDUAL NAME]
Facsimile: [FAX NUMBER]
b) If to THE COMPANY: [COMPANY NAME]
[FULL ADDRESS], [STATE/PROVINCE]
Attention: General Counsel
Facsimile: [FAX NUMBER]
With a copy to:
[COMPANY NAME]
[FULL ADDRESS], [STATE/PROVINCE]
Attention: [INDIVIDUAL NAME]
Facsimile; [FAX NUMBER]
This Agreement, the Schedules hereto (which are incorporated herein by reference) and the agreements to be executed and delivered in connection herewith, together constitute the entire agreement and understanding between the parties and there are no agreements or commitments with respect to the transactions contemplated herein except as set forth in this Agreement. This Agreement supersedes any prior offer, agreement or understanding between the parties with respect to the transactions contemplated hereby. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement.
Any term or provision of this Agreement may be amended only by a writing signed by the Company and Purchaser. The observance of any term or provision of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the party to be bound by such waiver. No waiver by a party of any breach of this Agreement will be deemed to constitute a waiver of any other breach or any succeeding breach.
Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or to give any person, firm or corporation, other than the parties hereto, any rights or remedies under or by reason of this Agreement.
For the convenience of the parties, this Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
These rights and obligations of the parties to this Agreement may not be delegated or assigned by any party hereto without the prior written consent of the other party and any such attempted delegation or assignment shall be void.
This Agreement shall be binding upon, shall inure to the benefit of, and be enforceable by and against, the parties hereto and their respective successors and permitted assigns.
This Agreement shall be governed by and construed in accordance with the internal laws of the State of [STATE/PROVINCE] (excluding application of any choice of law doctrines that would make applicable the law of any other state or jurisdiction) and, where appropriate, applicable federal law.
If any provision of this Agreement is for any reason and to any extent deemed to be invalid or unenforceable, then such provision shall not be voided but rather shall be enforced to the maximum extent then permissible under then applicable law and so as to reasonably effect the intent of the parties hereto, and the remainder of this Agreement will remain in full force and effect.
Should a suit or arbitration be brought to enforce or interpret any provision of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees to be fixed in amount by the Court or the Arbitrator(s) (including without limitation costs, expenses and fees on any appeal). The prevailing party will be entitled to recover its costs of suit or arbitration, as applicable, regardless of whether such suit or arbitration proceeds to a final judgment or award.
Except as otherwise indicated, all references in this Agreement to "Section(s)" and "Exhibit(s)" are intended to refer to Section(s) to this Agreement and Exhibit(s) to this Agreement, respectively.
All disputes arising under this Agreement shall be resolved pursuant to the dispute resolution procedures set forth in the Commercial Agreement.
This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof will not be construed for or against either party.
Upon execution of the Agreement by both parties, and until the Closing, all press releases and other public and private communications shall be made by the parties only with the mutual written consent of the Company and Purchaser, except that each party may make such disclosures as are required by applicable law, provided, however, that a copy of such disclosure shall first be submitted to the other party within a reasonable time period prior to the dissemination thereof.
IN WITNESS WHEREOF, the Purchaser and the Company executed and delivered this Agreement by their duly authorized representatives as of the Effective Date.
COMPANY PURCHASER
Authorized Signature Authorized Signature
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