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Search Agreement and Plan of Merger by:
EXHIBIT 10.55
================================================================================
AGREEMENT AND
PLAN OF MERGER
by and among
NEOMEDIA
TECHNOLOGIES, INC.,
NEOMEDIA TELECOM
SERVICES, INC.,
and
BSD
SOFTWARE, INC.
Dated as of
December 21, 2004
================================================================================
<PAGE>
TABLE OF
CONTENTS
Page
----
ARTICLE 1. DEFINITIONS........................................................1
1.1.
Defined Terms........................................................1
1.2.
Interpretation Provisions...........................................11
ARTICLE 2. THE MERGER........................................................11
2.1.
The
Merger.........................................................11
2.2.
Effective Time.....................................................11
2.3.
Effect of the
Merger...............................................12
2.4.
Certificate of Incorporation;
Bylaws...............................12
2.5.
Directors and
Officers.............................................12
2.6.
The Merger Consideration; Effect on Outstanding Securities of the
Company.............................................................12
2.7.
Dissenting Shares...................................................13
2.8.
Exchange Procedures.................................................13
2.9.
No Further Ownership Rights in Company Common Stock.................14
2.10. Lost, Stolen or Destroyed
Certificates..............................14
2.11. Taking of Necessary Action;
Further Action..........................14
2.12. Tax
Treatment.......................................................14
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND MAJOR
STOCKHOLDERS......................................................14
3.1.
Organization of the Company.........................................15
3.2.
Capitalization of the Company.......................................15
3.3.
Stockholders' Agreements, etc.......................................16
3.4.
Authorization.......................................................16
3.5.
Officers and Directors..............................................16
3.6.
Bank Accounts.......................................................16
3.7.
Subsidiaries........................................................16
3.8.
Real Property.......................................................17
3.9.
Personal Property...................................................18
3.10. Environmental
Matters...............................................19
3.11.
Contracts...........................................................20
3.12. No Conflict or Violation;
Consents..................................21
3.13. Permits.............................................................22
3.14. SEC Reports; Financial
Statements; Books and Records................22
3.15. Absence of Certain Changes or
Events................................23
3.16. Liabilities.........................................................25
3.17.
Litigation..........................................................26
3.18. Labor
Matters.......................................................26
3.19. Employee Benefit
Plans..............................................27
3.20. Transactions with Related
Parties...................................29
3.21. Compliance with
Law.................................................29
3.22. Intellectual
Property...............................................29
3.23. Tax
Matters.........................................................33
3.24.
Insurance...........................................................35
3.25. Brokers; Transaction
Costs..........................................36
3.26. No Other Agreements to Sell the
Company or the Assets...............36
i
<PAGE>
TABLE OF
CONTENTS
(Continued)
Page
----
3.27. Accounts
Receivable.................................................36
3.28.
Inventory...........................................................36
3.29. Product
Warranty....................................................37
3.30. Board
Recommendation................................................37
3.31. Material Misstatements or
Omissions.................................37
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUB...........37
4.1.
Organization........................................................38
4.2.
Capitalization of Buyer.............................................38
4.3.
Authorization.......................................................38
4.4.
SEC Reports; Financial Statements; Books and Records................39
4.5.
No Conflicts........................................................40
4.6.
Approvals...........................................................40
4.7.
Merger Consideration................................................40
4.8.
Brokers' and Finders' Fees..........................................40
4.9.
Board Approval; No Stockholder Approval Required....................40
ARTICLE 5. CONDUCT PRIOR TO THE EFFECTIVE TIME...............................40
5.1.
Conduct of Business of the Company..................................40
5.2.
No Solicitation.....................................................42
ARTICLE 6. ADDITIONAL COVENANTS..............................................44
6.1.
Special Meeting; Board Recommendation...............................44
6.2.
Voting Agreements...................................................45
6.3.
Access to Information...............................................45
6.4.
Confidentiality.....................................................45
6.5.
Expenses............................................................45
6.6.
Public Disclosure...................................................46
6.7.
Commercially Reasonable Efforts.....................................46
6.8.
Notification of Certain Matters.....................................46
6.9.
Company Repurchases.................................................46
6.10. Proprietary
Rights..................................................46
6.11. Tax
Matters.........................................................47
6.12. SEC Filings.........................................................48
6.13. Stockholder
Litigation..............................................48
6.14.
Indemnification.....................................................48
6.15. Company Options.....................................................49
ARTICLE 7. CONDITIONS TO THE MERGER..........................................49
7.1.
Conditions to Obligations of Each Party to Effect the Merger........49
7.2.
Additional Conditions to Obligations of the Company.................49
7.3.
Additional Conditions to the Obligations of Buyer...................50
ARTICLE 8. TERMINATION.......................................................52
8.1.
Termination.........................................................52
ii
<PAGE>
TABLE OF
CONTENTS
(Continued)
Page
----
8.2.
Termination by Buyer................................................52
8.3.
Termination by the Company..........................................53
8.4.
Procedure for Termination...........................................53
8.5.
Effect of Termination...............................................54
8.6.
Extension; Waiver...................................................54
ARTICLE 9. MISCELLANEOUS PROVISIONS..........................................54
9.1.
Notices.............................................................54
9.2.
Entire Agreement....................................................55
9.3.
Further Assurances; Post-Closing Cooperation........................55
9.4.
Amendment; Waiver...................................................55
9.5.
Third Party Beneficiaries...........................................56
9.6.
Opportunity to Hire Counsel; Role of Kirkpatrick & Lockhart LLP.....56
9.7.
No Assignment; Binding Effect.......................................56
9.8.
Headings............................................................56
9.9.
Invalid Provisions..................................................56
9.10. Governing
Law.......................................................56
9.11.
Arbitration.........................................................56
9.12. Remedies
Cumulative.................................................57
9.13. Construction........................................................57
9.14.
Counterparts........................................................57
iii
<PAGE>
TABLE OF
EXHIBITS
Exhibit A Form of Voting Agreement
Exhibit B Form of Certificate of Merger
Exhibit C Form of Buyer Compliance
Certificate
Exhibit D Form of Company Compliance
Certificate
iv
<PAGE>
AGREEMENT AND
PLAN OF MERGER
THIS AGREEMENT
AND PLAN OF MERGER, dated as
of December 21, 2004 (the
"Agreement"), is by
and among NEOMEDIA
TECHNOLOGIES, INC., a
Delaware
corporation ("Buyer"),
NEOMEDIA TELECOM SERVICES, INC, a Nevada corporation and
wholly-owned subsidiary of Buyer ("Merger
Sub"), and BSD SOFTWARE,
INC., a
Florida corporation (the "Company").
RECITALS:
A. The respective Boards of
Directors of Buyer, Merger Sub and the Company
have determined that
it is advisable and in the
best interests of
their
respective stockholders to effect the acquisition of the Company pursuant to
the
terms and subject to the conditions set forth herein.
B. In furtherance of such acquisition,
the Boards of Directors of Buyer,
Merger Sub and the Company have each approved the merger of the Company with
and
into Merger Sub (the "Merger"), upon the terms and subject to the
conditions set
forth herein, in accordance with the applicable provisions of the Nevada
Revised
Statutes (the "NRS" or "Nevada Law").
C. In connection with the execution
of this Agreement, Guy Fietz, Sun Tzu
Trust, Inc., and Trans Research Trust (collectively, the "Major Stockholders")
shall have executed and delivered to Buyer,
concurrently with the execution and
delivery of this Agreement by the parties hereto, a Voting Agreement in the
form
attached hereto as Exhibit A.
E. Pursuant to the Merger, each outstanding share of Company Common
Stock
will be converted solely into the right to shares of Buyer Common
Stock, as
provided in Section 2.6 herein, upon the terms and subject to the conditions
set
forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants
and agreements herein
contained, and intending to be legally bound hereby,
Buyer, Merger Sub and the Company hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1. Defined Terms. As used in this
Agreement, the terms below shall have
the following meanings:
"Acquisition Proposal"
has the meaning set forth in Section 5.2(c).
"Actions" means,
collectively, any action,
order writ, injunction,
judgment or decree
outstanding or claim,
suit, litigation, proceeding,
investigation or dispute.
1
<PAGE>
"Affiliate" of a
Person means any
other Person which,
directly or
indirectly, controls, is controlled by, or is under common control
with, such
Person. The term
"control" (including, with
correlative meaning, the terms
"controlled by" and
"under common control
with"), as used with respect
to any
Person, means the possession, directly
or indirectly, of the power to direct or
cause the direction of the management
and policies of such Person,
whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" has the
meaning set forth in the preamble.
"Approval" means
any approval, authorization, consent,
permit,
qualification or registration, or any
waiver of any of the foregoing, required
to be
obtained from or
made with, or
any notice, statement
or other
communication required to be filed with
or delivered to, any Governmental
or
Regulatory Authority or any other Person.
"Assets" means
the right, title
and interest of any
Person in its
properties, assets and rights of any kind,
whether tangible or intangible, real
or personal, including without limitation the right, title and interest in
the
following: all Contracts and Contract Rights;
all machinery, equipment and
computer hardware; all inventory; all Books and Records; all Proprietary
Rights;
all Permits; all return and other rights under or pursuant to all warranties,
representations and guarantees
made by suppliers and other
third parties in
connection with the Assets or services
furnished to such Person;
all cash,
accounts receivable, deposits and prepaid expenses; and all goodwill.
"Balance Sheet" means the balance sheet of the Company as of the Balance
Sheet Date which constitutes a portion of the Financial Statements.
"Balance Sheet Date"
means July 31, 2004.
"Benefit Arrangement"
means any employment, consulting, severance or other
similar contract, arrangement
or policy (written
or oral) and each plan,
arrangement, program, agreement or commitment (written or oral) providing for
insurance coverage (including, without
limitation, any self-insured
arrangements), workers' compensation, disability
benefits, supplemental
unemployment benefits, vacation
benefits, retirement benefits, life,
health or
accident benefits (including, without
limitation, any "voluntary employees'
beneficiary association" as defined
in Section 501(c)(9) of the Code
providing
for the same or other benefits) or for
deferred compensation, profit-sharing,
bonuses, stock options, stock
appreciation rights, stock purchases or other
forms of incentive compensation or
post-retirement insurance, compensation or
benefits which (a) is not a Welfare Plan,
Pension Plan or
Multiemployer Plan,
(b) is entered into, maintained, contributed
to or required to be contributed
to, as the case may be, by the
Company or any Subsidiary
or under which the
Company or any Subsidiary may incur any
liability, and (c) covers any Employee
or former Employee.
"Books and Records" means
(a) all product, business and
marketing plans,
sales and promotional literature
and artwork relating
to the Assets of the
Company or the Company Subsidiary
or the Business, (b) all books, records,
lists, ledgers, financial data, files, reports,
Tax Returns and related work
papers and letters from
accountants, budgets, pricing
guidelines, journals,
deeds, title policies,
minute books, stock
certificates and books, stock
transfer ledgers, Contracts,
product and design manuals,
plans, drawings,
technical manuals and operating records
of every kind relating to the Assets of
the Company or the Company
Subsidiary or the Business (including
records and
lists of customers, distributors, suppliers and personnel), computer files and
programs (including data processing
files and records),
retrieval programs,
operating data and plans and
environmental studies and
plans, and (c) all
telephone and fax numbers
used in the Business, and in
each case whether
maintained as hard copy or stored in
computer memory and whether owned by the
Company or its Affiliates.
2
<PAGE>
"Business" means the
business and operations of the Company.
"Business Combination" means, with respect to any
Person, (i) any merger,
consolidation or other business
combination to which such Person
is a party,
(ii) any sale, dividend, split or other disposition
of any capital stock or
other equity interests of such Person (except for issuances of common stock
upon
conversion of preferred stock
outstanding on the date hereof or the exercise of
options or warrants outstanding on the
date hereof or issued in accordance with
the covenants of this
Agreement), (iii) any tender offer
(including a self
tender), exchange offer,
recapitalization,
restructuring, liquidation,
dissolution or similar or extraordinary transaction, (iv) any sale, dividend or
other disposition of all or a material portion
of the Assets of such Person
(including by way of exclusive license
or joint venture formation) or (v) the
entering into of any agreement or
understanding, the granting of
any rights or
options, or the
acquiescence of such
Person, with respect
to any of the
foregoing.
"Business Day" means a
day other than Saturday, Sunday or any day on which
banks located in the State of Florida are authorized or obligated to close.
"Buyer" has the meaning
set forth in the preamble.
"Buyer Expense Notice"
has the meaning set forth in Section 8.5(b).
"Buyer Transaction
Expenses" has the meaning set forth in Section 8.5(b).
"Certificate of Merger"
has the meaning set forth in Section 2.2.
"Certificates" has the
meaning set forth in Section 2.8.
"Closing" has the meaning
set forth in Section 2.1(b).
"Closing Date" means the
date of the Closing.
"COBRA" has the meaning
set forth in Section 3.19(f).
"Code" means the Internal
Revenue Code of 1986, as amended.
"Common Merger
Consideration" means the amount equal to the fraction, the
numerator of which is the Merger
Consideration and the denominator
of which is
the aggregate number of shares of Company
Common Stock outstanding
at the
Effective Time.
"Company" has the meaning
set forth in the preamble.
3
<PAGE>
"Company Balance Sheet"
has the meaning set forth in Section 3.14(b).
"Company Common Stock"
means the Common Stock, par value $0.001 per share,
of the Company.
"Company Financial
Statements" has the meaning
set forth in Section
3.14(b).
"Company Material Adverse Effect" or
"Company Material Adverse Change" or
a similar phrase means (a) any change, circumstance or effect that individually
or in the aggregate with all other
changes, circumstances and effects,
is or
would be
reasonably likely to be
materially adverse to (i) the
business,
operations, assets, properties
(whether tangible or intangible),
liabilities
(taken as a whole), condition (financial or otherwise), results of operations
or
prospects, of the Company and the Company Subsidiary, taken as a whole, or (ii)
the right or ability of the
Company to consummate
any of the transactions
contemplated hereby or (b) any event
or condition which,
with the passage of
time, the giving or
receipt of notice,
would reasonably be
expected to
constitute a "Material Adverse
Effect" on or "Material
Adverse Change" with
respect to the Company and the Company Subsidiary, taken as a whole.
"Company Negative Vote"
has the meaning set forth in Section 8.1(d).
"Company Options" means
options to purchase shares of Company Common Stock
issued by the Company
(including, but not limited
to, options issued
to
Employees).
"Company Proprietary
Right" shall mean any Proprietary Right that is (i)
owned by, (ii) licensed
to, or (iii) was developed or created by or for the
Company or the Company Subsidiary.
"Company Registered Proprietary Rights" means all
Registered Proprietary
Rights owned by, filed in the name of, assigned to or applied by or for, the
Company or the Company Subsidiary.
"Company Restricted Stock" means shares of
Company Common Stock which are
subject to a repurchase option by the Company.
"Company SEC Reports" has
the meaning set forth in Section 3.14(a).
"Company Shares" means (i) all shares of
Company Common Stock issued and
outstanding immediately prior
to the Effective Time,
(ii) all vested and
unvested Company Options
issued and outstanding
immediately prior to the
Effective Time, and (iii) any other securities
convertible into or otherwise
exercisable or exchangeable
for Company Common Stock issued
and outstanding
immediately prior to the Effective Time.
"Company Special Meeting"
has the meaning set forth in Section 6.1(a).
"Company Stockholder" means each holder of Company Common
Stock at the
Effective Time.
4
<PAGE>
"Company Subsidiary" means
Triton Global Business
Services, Inc., a
Canadian company, and Triton Global Communications, Inc., an Alberta, Canada
company.
"Consents" means any and all Permits and any and all
consents, approvals
or waivers from third parties that
are required for the
consummation of the
transactions contemplated by this Agreement.
"Contract Rights" means
all rights and obligations under the Contracts.
"Contracts" means all
agreements, contracts, leases (whether for real or
personal property), purchase orders, undertakings,
covenants not to compete,
employment agreements, confidentiality agreements,
licenses, instruments,
obligations and commitments to which a Person is a party or by which a Person
or
any of its Assets are bound or affected, whether written or oral.
"Default" means (a) a breach of or default under any
Contract, (b) the
occurrence of an event that with the
passage of time or the giving of notice or
both would constitute a breach of or default
under any Contract or (c) the
occurrence of an event that with or without the passage of time or the giving
of
notice or both would give
rise to a right of
termination, renegotiation or
acceleration under any Contract.
"DGCL" or "Delaware
Law" has the meaning set forth in the recitals.
"Disclosure Schedules"
has the meaning set forth in Article 3.
"Dissenting Shares" has
the meaning set forth in Section 2.7(a).
"Effective Time" has the
meaning set forth in Section 2.2.
"Employee Plans"
means all Benefit
Arrangements, Multiemployer Plans,
Pension Plans and Welfare Plans.
"Employees" means all
officers and directors of the Company or the Company
Subsidiary and all other Persons
employed by the Company on a full or part-time
basis, together with all Persons retained as "independent
contractors" as of the
relevant date.
"Employment Agreements"
has the meaning set forth in Section 7.3(i).
"Encumbrance" means any
claim, lien, pledge, option, charge, easement, tax
assessment, security interest,
deed of trust,
mortgage, right-of-way,
encroachment, building or
use restriction, conditional
sales agreement,
encumbrance or other right of third
parties, whether voluntarily
incurred or
arising by operation of law,
and includes any
agreement to give any of the
foregoing in the future,
and any contingent sale or other
title retention
agreement or lease in the nature thereof.
"Environmental Claims"
means all notices of violation, liens,
claims,
demands and Action
or Proceedings arising
directly or indirectly
out of
Environmental Conditions or Environmental Laws.
5
<PAGE>
"Environmental Conditions" means the state of the
environment, including
natural resources (e.g., flora and fauna),
soil, surface water, ground water,
any present or potential drinking water supply,
subsurface strata or ambient
air, relating to or
arising out of the use, handling,
storage, treatment,
recycling, generation, transportation, release,
spilling, leaking, pumping,
pouring, emptying, discharging, injecting, escaping, leaching, disposal,
dumping
or threatened release of
Hazardous Substances by the
Company or any of its
predecessors or successors
in interest, or
by its respective
agents,
representatives, Employees or
independent contractors when
acting in such
capacity on behalf of the Company. With respect to Environmental Claims by
third
parties, Environmental Conditions
also include the
exposure of persons to
Hazardous Substances at the work place or the exposure of persons or property
to
Hazardous Substances migrating from or otherwise emanating from or located on
property owned or occupied by the Company.
"Environmental Laws" means all applicable U.S.
federal, state, district
and local laws, all rules or regulations promulgated thereunder, and all
orders,
consent orders, judgments,
notices, permits or
demand letters issued,
promulgated or entered pursuant thereto,
relating to pollution or protection of
the environment (including, without
limitation, ambient air, surface water,
ground water, land
surface, or subsurface
strata), including, without
limitation, (a) laws relating to emissions,
discharges, releases or
threatened
releases of pollutants, contaminants, chemicals, industrial materials, wastes
or
other substances into
the environment and
(b) laws relating
to the
identification, generation, manufacture, processing,
distribution, use,
treatment, storage, disposal,
recovery, transport or
other handling of
pollutants, contaminants, chemicals,
industrial materials, wastes
or other
substances. Environmental Laws
shall include, without
limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended ("CERCLA"), the Toxic
Substances Control Act, as amended, the Hazardous
Materials Transportation Act, as amended, the Resource Conservation and
Recovery
Act, as amended ("RCRA"), the Clean Water Act, as amended, the Safe
Drinking
Water Act, as amended, the Clean Air
Act, as amended, and all analogous
laws
promulgated or issued
by any state
or other Governmental
or Regulatory
Authority.
"Environmental Reports" means any and all written
analyses, summaries or
explanations, in the possession
or control of the
Company or the Company
Subsidiary, prepared for
the purpose of
analyzing or assessing
(a) any
Environmental Conditions in, on or about the properties of the Company or the
Company Subsidiary or (b) the Company's or the Company Subsidiary's
compliance
with Environmental Laws.
"ERISA" means the Employee Retirement
Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any entity which is (or
at any relevant time was)
a member of a "controlled group
of corporations" with, under "common control"
with, or a member of an "affiliated
service group" with, or otherwise
required
to be aggregated with, the Company as
set forth in Section 414(b), (c), (m) or
(o) of the Code.
"Exchange Act" means the
Securities Exchange Act of 1934, as amended.
6
<PAGE>
"Facilities" means all
plants, offices, manufacturing
facilities, stores,
warehouses, administration buildings
and all real
property and related
facilities leased by the Company or the Company Subsidiary, all as identified
or
listed on Disclosure Schedule 3.8(b).
"GAAP" means
generally accepted accounting
principles as applied in the
United States.
"Governmental or
Regulatory Authority" means
any court, tribunal,
arbitrator, authority, agency, bureau,
board, commission, department, ministry
or a branch thereof, official or other instrumentality of the United States,
any
foreign country or any domestic or
foreign state, province,
county, city or
other political subdivision.
"Hazardous Substances" means all
pollutants, contaminants, chemicals,
wastes, and any other carcinogenic,
ignitable, corrosive, reactive,
toxic or
otherwise hazardous substances or
materials (whether solids, liquids or
gases)
subject to regulation, control or remediation under Environmental Laws.
"Key Employee" means Guy
Fietz.
"Law" or "Laws"
means any law, statute, order,
decree, consent decree,
judgment, rule, regulation, ordinance or other pronouncement having the
effect
of law whether in the United
States, any foreign country,
or any domestic or
foreign state, county,
city or other
political subdivision or
of any
Governmental or Regulatory Authority.
"Lease" means a real
property lease or a personal property
lease, as
applicable.
"Leased Property" has the
meaning set forth in Section 3.8(b).
"Letter of Intent" means
that certain non-binding Letter of Intent between
Buyer and the Company dated as of December 9, 2003.
"Liability" means
any direct or
indirect liability, indebtedness,
obligation, commitment, expense, claim, deficiency, guaranty or
endorsement of
or by any Person of any type, whether accrued,
absolute, contingent, matured,
unmatured, liquidated, unliquidated, known or unknown.
"License" means any
Contract that grants a Person the right to use or
otherwise enjoy the
benefits of any Proprietary
Right (including without
limitation any covenants not to sue with respect to any Proprietary Right).
"Major Stockholders" has
the meaning set forth in the preamble.
"Merger" has the meaning
set forth in the preamble.
"Merger Consideration" means
the number of shares of Buyer Common Stock to
be issued to the
shareholders of the Company
in exchange for
all of the
outstanding shares of Company Common Stock. The number of shares of Buyer
Common
Stock to be issued to the shareholders
of the Company shall be equal to (i) the
product of the aggregate number of shares of Company Common Stock outstanding
at
the Effective Time
multiplied by 0.07, (ii) divided by the Volume Weighted
Average Price per share of the common stock of the Buyer on the NASDAQ Bulletin
Board market for the five trading days immediately preceding the Effective
Time.
7
<PAGE>
"Merger Sub" has the
meaning set forth in the preamble.
"Multiemployer Plan"
means any "multiemployer plan," as defined in Section
4001(a)(3) or 3(37) of ERISA, which
(a) the Company or any ERISA
Affiliate
contributes to or is required to
contribute to, or, after September 25, 1980,
contributed to or was required to
contribute to, or under which the
Company or
any ERISA Affiliate may incur any
liability and (b) covers any Employee
or
former Employee or any ERISA Affiliate.
"NRS" or "Nevada
Law" has the meaning set forth in the recitals.
"Option" with
respect to any
Person means any
security, right,
subscription, warrant, option,
"phantom" stock right or other Contract (other
than such Person's preferred
stock) that gives the right to
(a) purchase or
otherwise receive or be issued any shares of
capital stock or other equity
interests of such Person
or any security of any
kind convertible into or
exchangeable or exercisable
for any shares of capital stock
or other equity
interests of such Person or (b) receive
any benefits or rights similar to any
rights enjoyed by or accruing to the
holder of shares of capital stock or other
equity interests of such Person.
"Order" means any writ,
judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority
(in each such case whether preliminary
or final).
"Outside Date" has the
meaning set forth in Section 8.1(b).
"Pension Plan" means any "employee pension
benefit plan" as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which (a) the Company
or
any ERISA Affiliate maintains,
administers, contributes to or is
required to
contribute to, or,
within the five (5) years
prior to the Closing
Date,
maintained, administered, contributed
to or was required to contribute to, or
under which the
Company or any ERISA
Affiliate may incur
any liability
(including, without limitation,
any contingent liability) and (b)
covers any
Employee or former Employee or any ERISA Affiliate.
"Permits" means all
licenses, permits, franchises, approvals,
authorizations, consents or
orders of, or filings
with, any governmental
authority, whether foreign, federal, national, state or local, necessary for
the
past, present or anticipated conduct or operation of the Business or
ownership
of the Assets of any Person.
"Permitted Encumbrances"
means (a) statutory liens of landlords,
liens of
carriers, warehousepersons, mechanics and material persons, and purchase
money
liens incurred in the ordinary course of business for sums (i) not yet due
and
payable, or (ii) being contested
in good faith, if, in either such
case, an
adequate reserve shall
have been made therefor in such
Person's financial
statements, (b) liens incurred or deposits made in
connection with workers'
compensation, unemployment insurance and
other similar types of social security
programs or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, performance and return of
money bonds and similar obligations,
in each case in the ordinary course of
business, consistent with
past practice, (c)
easements, rights-of-way,
restrictions and other similar charges or
encumbrances, in each case, which
do
not interfere with the
ordinary conduct of business
of the Company and the
Company Subsidiary and do not materially
detract from the value of the property
upon which such encumbrance exists, and (d) liens securing taxes, assessments
and governmental charges not yet due and payable.
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"Person" means any person or entity,
whether an individual,
trustee,
corporation, limited liability
company, general partnership, limited
partnership, trust, unincorporated organization,
business association, firm,
joint venture, governmental agency or authority or any similar entity.
"Potential Acquiror" has
the meaning set forth in Section 5.2(a).
"Proprietary Rights"
means all (a) U.S. and
foreign patents, patent
applications, patent disclosures
and improvements thereto,
including petty
patents and utility models and
applications therefor, (b) U.S.
and foreign
trademarks, service marks, trade
dress, logos, trade names and corporate
names
and the goodwill associated therewith and
registrations and applications
for
registration thereof, (c) U.S. and foreign copyrights and registrations
and
applications for registration thereof, (d) U.S. and foreign mask work rights
and
registrations and applications for registration
thereof, (e) rights in Trade
Secrets, (f) domain name registrations, (g) other proprietary rights, and (h)
licenses granting any rights with respect to any of the foregoing.
"Proxy Statement" has the
meaning set forth in Section 6.1(b).
"PTO" shall mean the
United States Patent and Trademark Office.
"Registered Proprietary
Rights" shall mean
all United States,
international and foreign: (a) issued patents and patent applications
(including
provisional applications), (b)
registered trademarks and
servicemarks,
applications to register
trademarks and servicemarks, intent-to-use
applications, other registrations or applications to trademarks or
servicemarks,
(c) registered copyrights and applications for copyright registration,
(d) any
mask work registrations and
applications to register mask works,
and (e) any
other Proprietary Right that is the subject of an
application, certificate,
filing, registration or other document issued by, filed with, or recorded by,
any state, government or other public legal authority.
"Related Party"
means (a) any of the
Company's officers, directors,
stockholders and any officers,
directors, partners, associates
or relatives of
such officers, directors and
stockholders, (b) any Person in which
the Company
or any stockholder or any Affiliate,
associate or relative of any such Person
has any direct or indirect
interest, and (c) any direct or
indirect trustee or
beneficiary of any stockholder.
"Representative" of any Person
means any officer, director,
Employee,
stockholder, attorney, principal,
investment advisors, accountant,
agent,
Affiliate, or other representative of such Person.
"SEC" means the
Securities and Exchange Commission.
"Securities Act" means the Securities
Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
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<PAGE>
"Subsidiary" means
any Person in which the
Company or Buyer, as the
context requires, directly or indirectly through
Subsidiaries or otherwise,
beneficially owns at least 50% of either
the equity interest in, or the voting
control of, such Person, whether or not existing on the date hereof.
"Superior Proposal" has
the meaning set forth in Section 5.2(d).
"Surviving Corporation"
has the meaning set forth in Section 2.1(a).
"Tax" or "Taxes" means any (i)
federal, state, local or
foreign net
income, gross income, gross
receipts, license, payroll,
employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs
duties, capital stock,
franchise, profits, withholding,
social security,
unemployment, disability, real
property, personal property,
sales, use,
transfer, registration, value added, alternative or add-on minimum,
estimated,
or other
tax of any kind whatsoever, including
any interest, penalty,
or
addition thereto, whether disputed or not, and (ii) any liability of the
Company
or the Company Subsidiary imposed by law for the payment of amounts described
in
clause (i) on another
Person, including as a result of being a transferee,
successor or a member of an affiliated, consolidated, combined or unitary
group.
"Tax Liability" means a
Liability for any Tax.
"Tax Return" means any
return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including
any schedule or
attachment thereto, and
including any amendment thereof,
and including any
elections, rulings and requests for
rulings and other correspondence to or from
any Governmental Authority dealing with Taxes.
"Third Party Expenses"
has the meaning set forth in Section 6.5.
"to the knowledge" or
"knowledge" of a party (or similar phrases) means to
the extent of matters which are actually
known by such party and when used in
respect of the Company or the Company Subsidiary, the term "to the
knowledge" or
"knowledge" shall mean the matters which are known or reasonably
should be known
by Guy Fietz, or Gordon Ellison after due inquiry.
"Trade Secrets"
means all trade
secrets and confidential
business
information (including ideas,
formulas, compositions, inventions
(whether
patentable or unpatentable and whether or not reduced to practice), know-how,
research and development
information, software, drawings,
specifications,
designs, plans, proposals,
technical data,
copyrightable works, financial,
marketing and business
data, pricing and
cost information, business
and
marketing plans, mailing and e-mail lists, and customer and supplier mailing
and
e-mail lists and information), in each case which are not generally known to
the
public.
"Voting Agreement" means
a Voting Agreement in the form attached hereto as
Exhibit A, dated the date hereof,
executed and delivered to Buyer by each Major
Stockholder.
"Welfare Plan" means any "employee welfare
benefit plan" as defined in
Section 3(1) of ERISA, which (a) the
Company or any ERISA Affiliate
maintains,
administers, contributes to or is
required to contribute to, or under which the
Company or any ERISA Affiliate
may incur any liability and (b)
covers any
Employee or former Employee or any ERISA Affiliate.
10
<PAGE>
1.2. Interpretation Provisions.
(a) The words
"hereof,"
"herein" and "hereunder" and
words of
similar import when used in this Agreement
refer to this Agreement as a whole
and not to any particular provision of
this Agreement, and article,
section,
schedule and exhibit
references are to
this Agreement unless
otherwise
specified. The meaning of defined terms
shall be equally applicable to the
singular and plural
forms of the defined terms.
The terms "include" and
"including" are not limiting and mean "including without
limitation."
(b)