EXHIBIT
10.1
STOCK PURCHASE
AGREEMENT
dated as of July 2,
2009
by and among
PACKETVIDEO
CORPORATION,
NEXTWAVE WIRELESS
INC.,
NEXTWAVE BROADBAND
INC.
and
NTT DOCOMO, INC.
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Page
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1.
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AGREEMENT TO PURCHASE AND SELL SHARES
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2
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(a)
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Restated Certificate of Incorporation
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2
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(b)
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Purchase and Sale of the Purchased
Shares
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2
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(a)
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Conditions to Obligations of the Purchaser at
Closing
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2
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(b)
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Conditions to Obligations of Seller at
Closing
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4
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3.
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CLOSING
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5
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4.
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REPRESENTATIONS, WARRANTIES AND CERTAIN
AGREEMENTS OF PARENT, SELLER AND THE COMPANY
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5
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(a)
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Organization, Good Standing and
Qualification
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6
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(c)
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Authority; Noncontravention
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7
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(d)
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Valid Issuance of Purchased Shares
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8
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(f)
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Financial Statements; Accounts Receivable;
Undisclosed Liabilities
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8
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(g)
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Brokers and Other Advisors
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9
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(h)
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Absence of Certain Changes or Events
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9
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(j)
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Compliance with Laws, Permits
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11
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(k)
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Compliance with Securities Laws
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11
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(l)
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No Integrated Offering
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11
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(p)
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Property and Assets
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14
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(q)
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Intellectual Property
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14
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(s)
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Material Contracts and Obligations
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16
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TABLE OF CONTENTS
(continued)
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Page
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(v)
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Related Party Transactions
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18
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(w)
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Environmental, Health and Safety
Matters
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18
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5.
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REPRESENTATIONS, WARRANTIES AND CERTAIN
AGREEMENTS OF THE PURCHASER
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20
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(a)
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Organization, Good Standing and
Qualification
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20
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(d)
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Purchase for Own Account
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21
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(e)
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Investment Experience
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21
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(f)
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Status of the Purchaser
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21
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(g)
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Reliance Upon the Purchaser’s
Representations
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21
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(h)
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Receipt of Information
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21
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(i)
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Restricted Securities
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22
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6.
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CERTAIN POST-CLOSING COVENANTS
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23
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(a)
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Technology Collaboration Agreement
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23
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(b)
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Equity Incentive Plan
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23
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(a)
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Survival of Representations and
Warranties
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23
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(b)
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Indemnification Provisions for the
Purchaser’s Benefit
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24
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(c)
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Indemnification Provisions for Parent and
Seller’s Benefit
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24
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(a)
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Successors and Assigns
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31
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TABLE OF CONTENTS
(continued)
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Page
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(b)
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Governing Law; Jurisdiction; Waiver of Jury
Trial
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31
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(c)
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Specific Enforcement
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32
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(i)
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Reporting and Publicity
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33
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(k)
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Replacement of Shares
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34
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(n)
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Further Assurances
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34
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(o)
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Meaning of “Include” and
“Including”
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34
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(p)
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No Presumption Against Drafting Party
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34
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(q)
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No Third-Party Beneficiaries
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35
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(r)
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Facsimile and E-mail Signatures
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35
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(s)
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Corporate Securities Law
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STOCK PURCHASE
AGREEMENT
This Stock Purchase Agreement (this
“ Agreement ”) is made and entered into
as of July 2, 2009, by and among PacketVideo Corporation, a
Delaware corporation (the “ Company ”),
NextWave Wireless Inc., a Delaware corporation (“
Parent ”), NextWave Broadband Inc., a Delaware
corporation and wholly owned subsidiary of Parent (“
Seller ”), and NTT DoCoMo, Inc. (the “
Purchaser ” and, together with the Company,
Parent and Seller, each a “ Party ” and,
collectively, the “ Parties
”).
RECITALS
WHEREAS, Seller holds all of the
issued and outstanding capital stock of the Company, and wishes to
sell a portion of such stock to Purchaser in order to facilitate an
investment by Purchaser in the Company; and
WHEREAS, the Company shall authorize
the creation of a new class of common stock designated as Class A
Common Stock, par value $0.001 per share, of the Company (the
“ Class A Common Stock ”) by filing an
Amended and Restated Certificate of Incorporation of the Company in
the form attached hereto as Exhibit A with the office of the Secretary of State of the
State of Delaware in accordance with the General Corporation Law of
the State of Delaware; and
WHEREAS, upon the filing of such
Amended and Restated Certificate of Incorporation, the
Company’s capital stock shall be recapitalized (the “
Recapitalization ”) and shall consist of the
Class A Common Stock and Class B Common Stock, par value $0.001 per
share (the “ Class B Common Stock ” and,
together with the Class A Common Stock, collectively, “
Common Stock ”), all shares of which shall be
held by Seller immediately after the Recapitalization;
WHEREAS, Seller desires to sell to
the Purchaser immediately following the Recapitalization, and the
Purchaser desires to purchase and acquire from Seller immediately
following the Recapitalization, all issued and outstanding shares
of Class A Common Stock (the “ Purchased Shares
”), which shall constitute 35% of the issued and outstanding
shares of common stock of the Company;
WHEREAS, the Company and the
Purchaser plan to enter into a Technology Collaboration Agreement
within sixty (60) days of the Closing Date, providing for the
mutual management of the Company’s development efforts
relating to the Purchaser’s products and technologies on the
terms and conditions set forth therein that are mutually
satisfactory to the Company and the Purchaser (the “
Technology Collaboration Agreement ”);
and
WHEREAS, certain capitalized terms
are used herein as defined in Article 8 hereof.
NOW, THEREFORE, in consideration of
the foregoing, the mutual promises hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as
follows:
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1.
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AGREEMENT TO PURCHASE AND SELL
SHARES .
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(a)
Restated Certificate of Incorporation . The Company shall
adopt and file with the Secretary of State of the State of Delaware
on or before the Closing Date (as defined below) the Amended and
Restated Certificate of Incorporation in the form attached hereto
as Exhibit A (the
“ Restated Certificate of Incorporation
”).
(b)
Purchase and Sale of the Purchased Shares . Subject to the
terms and conditions of this Agreement, at the Closing (as defined
below), Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase, the Purchased Shares for an aggregate purchase
price of $45.5 million (the “ Purchase Price
”).
(c)
Use of Proceeds . The Seller shall use the “net
proceeds” (as determined in accordance with the Note
Agreements) from the sale of the Purchased Shares to pay down the
Notes in accordance with the terms and conditions thereof and of
the related Note Agreements.
(a)
Conditions to Obligations of the Purchaser at Closing . The
obligations of the Purchaser to purchase the Purchased Shares and
enter into the other Transaction Documents at the Closing are
subject to the fulfillment, on or before the Closing, of each of
the following conditions, unless otherwise waived by the Purchaser
in writing.
(i)
Representations and Warranties . The representations and
warranties of the Company, Parent and Seller contained in
Article 4 shall be
true and correct in all material respects (except to the extent
that such representations and warranties are qualified by the term
“material” or contain a term such as “Material
Adverse Effect,” in which case such representations and
warranties (as so written, including the term
“material” or “Material Adverse Effect”)
shall be true and correct in all respects) as of the Closing with
the same effect as if made on and as of the Closing.
(ii)
Performance . Each of the Company, Parent and Seller shall
have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the
Closing.
(iii)
Compliance Certificate . The President(s) of each of the
Company, Parent and Seller shall have delivered to the Purchaser at
the Closing a certificate certifying that the conditions specified
in Section 2(a) have
been fulfilled.
(iv)
Company Secretary’s Certificate . The Secretary of the
Company shall have delivered to the Purchaser at the Closing a
certificate and attached thereto (i) a true and correct copy of the
Restated Certificate of Incorporation as in effect at the time of
the Closing, (ii) the Company’s Bylaws as in effect at the
time of the Closing, (iii) good standing certificates (including
tax good standing) with respect to the Company from the applicable
authorities in Delaware and California, dated no more than ten (10)
days before the Closing Date, (iv) resolutions of the Board of
Directors of the Company adopting and approving filing of the
Restated Certificate of Incorporation with the Secretary of State
of the State of Delaware, the execution and delivery of the
Transaction Documents by the Company, and the consummation of
the
transactions contemplated under
the Transaction Documents, and (v) resolutions of the sole
stockholder of the Company adopting and approving the filing of the
Restated Certificate of Incorporation with the Secretary of State
of the State of Delaware.
(v)
Qualifications . All authorizations, approvals or Permits,
if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with
the lawful sale of the Purchased Shares pursuant to this Agreement
shall be obtained and effective as of the Closing.
(vi)
Consents . The Company shall have obtained the consents,
Permits and waivers set forth in Schedule 2(a)(vi)
hereto, including the consents of
the holders of the Notes in the form attached hereto as Exhibit
D .
(vii)
Fairness Opinion . The Board of Directors of the Company
shall have received, and provided to the Purchaser a true, correct
and complete copy of, a written opinion from a reputable financial
advisor experienced in preparing and delivering fairness opinions
in merger and acquisition transactions to the effect that, as of
the date thereof and based upon and subject to the assumptions,
procedures, factors, qualifications and limitations set forth
therein, the Purchase Price is fair to Parent and Seller from a
financial point of view, and such opinion shall not have been
amended or rescinded as of the date of this Agreement.
(viii) No
Injunction . No preliminary or permanent injunction or other
binding order, decree or ruling issued by a court or government
agency shall be in effect which shall have the effect of preventing
the consummation of the transactions contemplated by the
Transaction Documents.
(ix)
Amended and Restated Certificate of Incorporation . The
Company shall have adopted and filed with the Secretary of State of
the State of Delaware the Restated Certificate of Incorporation,
which shall continue to be in full force and effect as of the
Closing.
(x)
Stockholders Agreement . The Company and Seller shall have
executed and delivered to the Purchaser the Stockholder Agreement
in the form attached hereto as Exhibit B
(the “ Stockholders
Agreement ”).
(xi)
Registration Rights Agreement . The Company shall have
executed and delivered to the Purchaser the Registration Rights
Agreement in the form attached hereto as Exhibit C
(the “ Registration
Rights Agreement ”)
(xii)
Board of Directors . As of the Closing, the authorized size
of the Board shall be three (3), and the Board shall be comprised
of James C. Brailean, as the individual appointed by the Company,
Francis Harding, as the individual appointed by Parent, and Toshio
Miki, as the individual appointed by the Purchaser.
(xiii)
Reservation of Shares . The shares of Class B Common Stock
issuable upon conversion of the Purchased Shares shall have been
duly authorized and reserved for issuance upon such
conversion.
(xiv)
Certain Releases and Documentation . The Purchaser shall
have received evidence reasonably satisfactory to the Purchaser of
each of the following:
(1) The
irrevocable and unconditional release and discharge of (A) the
Company and its Subsidiaries from any and all guarantees, other
obligations and liabilities in respect of any indebtedness,
obligations or liabilities of Parent or Parent’s Affiliates
(other than the Company and its Subsidiaries) pursuant to a release
in the form attached hereto as Exhibit D , and (B) all Liens
on the shares of Class A Common Stock in favor of holders of the
Notes pursuant to a release in the form attached hereto as
Exhibit D .
(2) Documentation
showing the Company’s receipt of advances of working capital
from and after December 28, 2008 through the Closing Date (which in
no event shall exceed $15,000,000 in the aggregate) from Parent and
its Affiliates to the Company, whether under the Working Capital
Agreement (as defined below) or otherwise, as properly documented
pursuant to definitive documentation, which documentation shall be
in a form and substance satisfactory to the Purchaser (“
Permitted Working Capital Amounts ”);
(3) Any
and all indebtedness, if any, owed by the Company or any of its
Subsidiaries to Parent, Seller or any of their Affiliates (except
Permitted Working Capital Amounts) shall have been contributed to
the capital of the Company prior to the Closing, without any
Liability or any adverse Tax consequence to the Company or any of
its Subsidiaries or the payment of any consideration or issuance of
any capital stock to Parent, Seller or any of their Affiliates by
the Company or any of its Subsidiaries, as evidenced by the
agreement in the form attached hereto as Exhibit E
(the “ Working Capital
Agreement ”) .
(xv)
Employment Agreements . The Purchaser shall have received
true, correct and complete copies of employment agreements between
the Company and those employees listed on Schedule
2(a)(xv) hereto in the
form attached hereto as Exhibit F , which agreements shall
be effective as of the Closing.
(xvi)
Opinion of Seller’s Counsel . The Purchaser shall have
received from Cooley Godward Kronish LLP, counsel for the Company,
Parent and Seller, an opinion, dated as of the Closing Date, in a
form reasonably agreed to by the Parties.
(xvii) FIRPTA
Certificate . The Purchaser shall have received from Seller a
duly executed certificate of non-foreign status meeting the
requirements of Treasury Regulation Section
1.1445-2(b)(2).
(xviii) Assignment
Separate from Certificate . The Purchaser shall have received
from Seller a stock assignment separate from certificate for the
transfer of the Purchased Shares by Seller to Purchaser. As soon as
practicable following the Closing Date, the Seller shall deliver to
Purchaser the original stock certificate representing the Purchased
Shares.
(b)
Conditions to Obligations of Seller at Closing . The
obligations of Seller to sell the Purchased Shares to the Purchaser
and enter into the other Transaction Documents at the Closing, as
the case may be, are subject to the fulfillment, on or before the
Closing, of each of the following conditions, unless otherwise
waived by it.
(i)
Representations and Warranties . The representations and
warranties of the Purchaser contained in Article 5 shall be
true and correct in all material respects (except to the extent
that such representations and warranties are qualified by the term
“material” or contain a term such as “Material
Adverse Effect,” in which case such representations and
warranties (as so written, including the term
“material” or “Material Adverse Effect”)
shall be true and correct in all respects) as of the Closing with
the same effect as if made on and as of the Closing.
(ii)
Performance . The Purchaser shall have performed and
complied with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.
(iii)
Stockholders Agreement . The Purchaser shall have executed
and delivered to the Company the Stockholder Agreement.
(iv)
Registration Rights Agreement . The Purchaser shall have
executed and delivered to the Company the Registration Rights
Agreement.
(v)
No Injunction . No preliminary or permanent injunction or
other binding order, decree or ruling issued by a court or
government agency shall be in effect which shall have the effect of
preventing the consummation of the transactions contemplated by the
Transaction Documents.
(a) The
closing of the purchase and sale of the Purchased Shares (the
“ Closing ”) shall take place at the
offices of Seller at 10350 Science Center Drive, Suite 210, San
Diego, California 92121 on the date hereof immediately following
the satisfaction or waiver of the conditions described in
Article 2 hereof or at
such other time or place as the Parties may mutually agree. The
date of the Closing is referred to herein as the “
Closing Date .”
(b) At
the Closing, against full payment of the Purchase Price for the
Purchased Shares, by wire transfer of immediately available funds
by the Purchaser to The Bank of New York, as collateral agent for
and representative of the holders of the Notes, for the benefit of
Seller in accordance with the wire transfer instructions attached
hereto as Exhibit G , which wire transfer shall constitute
full and final payment of the Purchase Price to Seller, Seller
shall deliver to the Purchaser one or more stock certificates (the
“ Certificates ”) registered in the name
of the Purchaser, representing the Purchased Shares and bearing the
legends set forth in Section 5(j) herein. Closing documents may be delivered by
facsimile or by electronic mail.
4.
REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF PARENT,
SELLER AND THE COMPANY .
The Company, Parent and Seller each
hereby represents and warrants to the Purchaser that, except as
disclosed in the disclosure schedule delivered to Purchaser in
connection herewith (the “ Disclosure Schedule
”), which exceptions shall be deemed to be part of and
qualify the representations and warranties made hereunder, the
following representations and warranties are true and correct in
all respects as of the date hereof, and they will be true and
correct in all material respects (except to the extent that such
representations and warranties are
qualified by the term
“material” or contain a term such as “Material
Adverse Effect,” in which case such representations and
warranties (as so written, including the term
“material” or “Material Adverse Effect”)
will be true and correct in all respects), except as otherwise
indicated. The Disclosure Schedule shall be arranged with specific
reference to the Section or subsection of this Article 4 to
which the information stated in such Disclosure Schedule relates (
provided, however, that any disclosure contained in any section of
the Disclosure Schedule shall be deemed to be disclosed with
respect to any other Section or subsection of this Article
4 only to the extent
that it is reasonably and readily apparent that such disclosure is
applicable to such other Section or subsection of this Article
4 ).
(a)
Organization, Good Standing and Qualification . Each of the
Company, Parent and Seller is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Delaware and has all requisite corporate power and authority
necessary to own, lease and operate all of its properties and
assets and to carry on its business as it is now being conducted
and as currently proposed by its management to be conducted. Each
of the Company, Parent and Seller is duly qualified or authorized
to do business and is in good standing in each jurisdiction in
which it owns or leases real property and each other jurisdiction
in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except
where the failure to be so qualified, authorized or in good
standing would not have a Material Adverse Effect.
(b)
Capitalization . Immediately prior to the Recapitalization,
the authorized capital stock of the Company consisted of 55,000,000
shares of common stock, par value $0.001 per share, of which
46,750,000 are issued and outstanding (all of which are owned by
Seller), have been duly authorized and are validly issued, fully
paid and nonassessable and free of all Liens (including any option,
right of first refusal, proxy, voting trust or agreement, or
Transfer restriction under any stockholder or similar agreement),
except Liens in favor of holders of the Notes, and restrictions on
Transfer other than restrictions on Transfer under applicable
federal and state securities laws and under the Transaction
Documents. After giving effect to the Recapitalization, and
immediately prior to the Closing, the authorized capital stock of
the Company consists of 75,000,000 shares of Common Stock,
consisting of 18,000,000 shares of Class A Common Stock, 16,362,500
shares of which are issued and outstanding and owned by Seller, and
57,000,000 shares of Class B Common Stock, of which 30,387,500
shares are issued and outstanding and owned by Seller and
16,362,500 shares of Class B Common Stock are reserved for issuance
upon conversion of the outstanding shares of Class A Common Stock,
and all of such outstanding shares of Common Stock have been duly
authorized and are validly issued, are fully paid and nonassessable
and free of all Liens (including any option, right of first
refusal, proxy, voting trust or agreement, or Transfer restriction
under any stockholder or similar agreement) and restrictions on
Transfer other than restrictions on Transfer under applicable
federal and state securities laws and under the Transaction
Documents. All outstanding shares of capital stock of the Company
were issued in compliance with all applicable federal and state
securities Laws. No shares of preferred stock are authorized,
issued or outstanding, and no shares of Common Stock or preferred
stock are held by the Company in its treasury. There is no existing
option, warrant, call, right or Contract of any character to which
the Company is a party requiring, and there are no securities of
the Company outstanding which upon conversion or exchange would
require, the issuance, sale or Transfer of any additional shares of
capital stock or other equity securities of the Company or other
securities convertible into, exchangeable for or
evidencing the right to subscribe
for or purchase shares of capital stock or other equity securities
of the Company. None of the Company, Parent and Seller is a party
to any voting trust or other Contract with respect to the voting,
redemption, sale, Transfer or other disposition of the capital
stock of the Company.
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(c)
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Authority; Noncontravention
.
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(i) Each
of the Company, Parent and Seller has all necessary corporate
power, authority and legal capacity to execute and deliver this
Agreement, the other Transaction Documents and the Technology
Collaboration Agreement and to consummate the transactions
contemplated by the Transaction Documents subject to the terms and
conditions set forth therein (collectively, the “
Transactions ”). The execution and delivery of
the Transaction Documents, the performance by the Company, Parent
and Seller of their respective obligations thereunder, and the
consummation by the Company, Parent and Seller of the Transactions,
have been duly authorized and approved by such Party’s board
of directors and no other corporate action on the part of such
Party is necessary to authorize the execution, delivery and
performance by such Party of the Transaction Documents and the
consummation of the Transactions, except for the requisite
approvals contemplated by Section 4(c)(i) . This Agreement
has been, and each of the other Transaction Documents will be at
their execution and delivery to the Purchaser, duly and validly
executed and delivered by the Company, Parent and Seller and,
assuming due authorization, execution and delivery hereof and
thereof by the Purchaser, constitutes, and each of the other
Transaction Documents when so executed and delivered, will
constitute, legal, valid and binding obligations of each of the
Company, Parent and Seller, enforceable against such Party in
accordance with their respective terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar
Laws of general application affecting or relating to the
enforcement of creditors’ rights generally and (ii) is
subject to general principles of equity, whether considered in a
proceeding at Law or in equity.
(ii) None
of the execution and delivery of this Agreement or any of the other
Transaction Documents by the Company, Parent and Seller, the
consummation by the Company, Parent and Seller of the Transactions
(including the Recapitalization and the conversion of shares of
Class A Common Stock into shares of Class B Common Stock), or
compliance by the Company, Parent and Seller with any of the terms
or provisions of the Transaction Documents, will conflict with or
result in a violation of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, or give rise to any obligation of
such Party to make any material payment under, or to the increased,
additional, accelerated or guaranteed rights or entitlements of any
Person under, or result in the creation of any Liens upon any of
the properties or assets of such Party or any Subsidiary of such
Party under, any provision of (i) the certificate of incorporation
and bylaws or other comparable organizational documents of such
Party, (ii) any Contract or Permit to which such Party or any
Subsidiary of such Party is a party or by which any of the
properties or assets of such Party or any or any Subsidiary of such
Party are bound, (iii) any Order of any Governmental Authority
applicable to such Party or any Subsidiary of such Party or any of
the properties or assets of such Party or any Subsidiary of such
Party, or (iv) any applicable Law; except in the case of clause
(ii), and (iii), for any conflict, violation,
default, loss of benefit, or right
of termination, cancellation or acceleration that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
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(d)
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Valid Issuance of Purchased Shares
.
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(i) The
Purchased Shares will be, upon the Recapitalization, duly
authorized, validly issued, fully paid, nonassessable, and free of
all Liens, except Liens in favor of holders of the Notes, and
restrictions on Transfer other than restrictions on Transfer other
than restrictions on Transfer under applicable federal and state
securities laws and under the Transaction Documents. The Purchased
Shares, upon transfer to the Purchaser, shall have been transferred
in compliance with all applicable federal and state securities laws
and free of all Liens. The shares of Class B Common Stock issuable
upon conversion of the Purchased Shares has been duly reserved for
issuance, and upon issuance in accordance with the terms of the
Restated Certificate of Incorporation, will be validly issued,
fully paid and nonassessable and free of all Liens (including any
option, right of first refusal, proxy, voting trust or agreement,
or Transfer restriction under any stockholder or similar agreement)
and restrictions on Transfer other than restrictions on Transfer
under the Transaction Documents and applicable federal and state
securities laws. Based in part upon the representations of the
Purchaser in Article 5 of this Agreement, the shares of
Class B Common Stock issuable upon conversion of the Purchased
Shares will be issued in compliance with all applicable federal and
state securities laws.
(ii) The
Purchase Price is a result of arm’s length negotiations by
the parties and the Company, Parent and Seller have determined that
the Purchase Price represents the fair market value of the
Purchased Shares, taking into account all the facts and
circumstances existing as of the date of this Agreement, including,
but not limited to, the financial condition, assets and liabilities
of the Company and its Subsidiaries, the lack of liquidity for the
Purchased Shares and the future prospects of the Company and its
Subsidiaries.
(e)
Consents . No consent, waiver, approval, Order, Permit or
authorization of, or filings, declarations or registrations with,
or notification to, any Person or Governmental Authority is
required in connection with the execution and delivery of this
Agreement or the other Transaction Documents by the Company, Parent
or Seller, the compliance by the Company, Parent and Seller with
any of the provisions hereof or the consummation by the Company,
Parent or Seller of the Transactions, except for those consents and
filings set forth on Schedule 4(e) , and such consents,
waivers, approvals, Orders, Permits, or authorizations of, or
filings, declarations or registrations with, or notifications to
any Person or Governmental Authority that, if not obtained, made or
given, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
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(f)
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Financial Statements; Accounts Receivable;
Undisclosed Liabilities .
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(i) True,
correct and complete copies of (i) the unaudited consolidated
financial statements of the Company and its Subsidiaries as of and
for the year ending December 29, 2007 and December 27, 2008,
each of which includes a statement of cash flows and statement of
operations for such fiscal year and a balance sheet as at the last
day thereof and (ii) the unaudited consolidated financial statement
of the Company and its Subsidiaries as of and for the fiscal
quarter ending March 27, 2009, which includes a statement of cash
flows and
statement of operations for such
fiscal quarter and a balance sheet (the “ Balance
Sheet ”) as of the last day thereof (the “
Balance Sheet Date ”), are attached hereto as
Schedule 4(f)(i) (the financial statements referred to in
this clause (ii) are the “ Interim Financial
Statements ,” and, collectively, the financial
statements referred to in clause (i) above and this clause (ii) are
the “ Financial Statements ”). Each of
the Financial Statements (i) has been prepared in accordance with
the books and records of the Company, (ii) has been prepared in
accordance with GAAP applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes
thereto), and (iii) presents fairly in all material respects the
consolidated financial position, results of operations and cash
flows of the Company and its Subsidiaries as at the respective
dates for the periods indicates and for the respective periods
indicated therein, except as otherwise noted therein and subject to
normal and recurring year-end adjustments and the absence of notes
that will not, individually or in the aggregate, be material. The
Company maintains a standard system of accounting established and
administered in accordance with GAAP.
(ii) All
accounts receivable of the Company and its Subsidiaries that are
reflected on the Balance Sheet or on the accounting records of the
Company and its Subsidiaries as of the Closing Date (collectively,
the “ Accounts Receivable ”) represent or
will represent valid obligations arising from sales actually made
or services actually performed in the Ordinary Course of Business.
Unless paid prior to the Closing Date, the Accounts Receivable are
or will be as of the Closing Date current and collectible net of
the respective reserves shown on the Balance Sheet or on the
accounting records of the Company and its Subsidiaries as of the
Closing Date (which reserves are believed by the Company to be
adequate in all material respects and calculated consistent with
past practice).
(iii) Neither
the Company nor any of its Subsidiaries has any Indebtedness,
Liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise, whether known or unknown)
whether or not required, if known, to be reflected in or reserved
against or otherwise described on a consolidated balance sheet of
the Company prepared in accordance with GAAP or the notes thereto,
except Indebtedness, Liabilities and obligations (A) as and to the
extent fully reflected in, reserved against or otherwise described
in the balance sheets included in the Financial Statements, (B)
liabilities incurred for legal and transactional expenses in
connection with the Transactions or the Transaction Documents, or
(C) incurred after the Balance Sheet Date in the Ordinary Course of
Business, which, in all such cases, individually and in the
aggregate would not have a Material Adverse Effect. Since the
Balance Sheet Date, neither the Company nor any of its Subsidiaries
has failed to promptly pay and discharge any current Liabilities
except where disputed in good faith by appropriate proceedings, and
has not accelerated the collection of any accounts
receivable.
(g)
Brokers and Other Advisors . No Person has acted, directly
or indirectly, as a broker, finder or financial advisor for the
Company, Parent or Seller in connection with the Transactions, and
no Person is entitled to any fee or commission or like payment in
respect thereof.
(h)
Absence of Certain Changes or Events . From the Balance
Sheet Date to the date of this Agreement, there have not been any
events, changes, occurrences or state of facts that, individually
or in the aggregate, have had or would reasonably be expected to
have a Material
Adverse Effect. Since the Balance
Sheet Date, the Company and its Subsidiaries have carried on and
operated their respective businesses in all material respects in
the Ordinary Course of Business. Without limiting the generality of
the foregoing, from the Balance Sheet Date to the date of this
Agreement, except as contemplated by the Transactions or the
Transaction Documents entered into as of the date
hereof:
(i) there
has not been any declaration, setting aside or payment of any
dividend or other distribution in respect of any shares of capital
stock of the Company or any repurchase, redemption or other
acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of or other
ownership interest in the Company or any of its
Subsidiaries;
(ii) neither
the Company nor any of its Subsidiaries has made any loan (other
than advances of compensation) to, or entered into any other
material transaction (other than employment-related transactions)
with, any of its Affiliates, directors, officers or employees other
than in the Ordinary Course of Business;
(iii) neither
the Company nor any of its Subsidiaries has mortgaged, pledged or
been subjected to any Lien on any of its material assets, or
acquired any material assets or sold, assigned, conveyed, leased or
otherwise disposed of or Transferred any material assets of the
Company or any Subsidiary, except for assets acquired or sold,
assigned, conveyed, leased or otherwise disposed of or Transferred
in the Ordinary Course of Business;
(iv) neither
the Company nor any of its Subsidiaries has issued any note, bond
or other debt security or created, incurred, assumed or guaranteed
any indebtedness for borrowed money or capitalized lease obligation
involving more than $100,000 in the aggregate;
(v) neither
the Company nor any of its Subsidiaries has assigned, granted any
exclusive license or sublicense of any rights under or with respect
to, or otherwise Transferred, any material Intellectual Property,
except non-exclusive licenses granted in the Ordinary Course of
Business;
(vi) neither
the Company nor any of its Subsidiaries has received notice of,
instituted or settled any material Proceeding;
(vii) there has
been no change made or authorized in the certificate of
incorporation, bylaws or other comparable organizational documents
of the Company or any of its Subsidiaries except as expressly
contemplated by this Agreement;
(viii) neither Company
nor any Subsidiary has issued, sold or otherwise disposed of any of
its capital stock, or granted any options, warrants or other rights
to purchase or obtain (including upon conversion, exchange or
exercise) any of its capital stock except to the Purchaser pursuant
to the Transaction Documents;
(ix) none of
Company or any of its Subsidiaries has agreed, committed, arranged
or entered into any understanding to do anything set forth in this
Section 4(h) .
(i)
Legal Proceedings . Except for matters that have not had or
would not reasonably be expected to have, individually or in the
aggregate a Material Adverse Effect, there is no pending or, to the
Knowledge of the Company, Parent or Seller threatened legal,
administrative, arbitral or other Proceeding against, or
governmental or regulatory investigation of, the Company or any of
its Subsidiaries (or to the Knowledge of the Company, Parent or
Seller, pending or threatened, against any of the officers,
directors or employees of the Company or any of its Subsidiaries
with respect to their business activities on behalf of the
Company), or to which the Company or any of its Subsidiaries is
otherwise a party before any Governmental Authority, nor is there
any Order imposed (or, to the Knowledge of the Company, Parent or
Seller threatened to be imposed) upon the Company, any of its
Subsidiaries or the assets of the Company or any of its
Subsidiaries, by or before any Governmental Authority. To Knowledge
of the Company, Parent or Seller, there is no action, suit,
proceeding, hearing or investigation that is expected to be brought
against Company or any Subsidiary that would have or would
reasonably be expected to have a Material Adverse
Effect.
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(j)
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Compliance with Laws, Permits
.
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(i) The
Company and each of its Subsidiaries is in compliance in all
material respects with all Laws and Permits applicable to it, any
of its properties or other assets or any of its businesses or
operations, except for any noncompliance with Permits that,
individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
(ii) The
Company and each of its Subsidiaries hold all material Permits
necessary for the lawful conduct of their respective businesses as
they are now being conducted and as currently proposed by their
respective managements to be conducted, and each such material
Permit is in full force and effect and will continue to be in full
force and effect on identical terms upon the consummation of the
Transactions, other than any Permits the failure of which to remain
in full force and effect would not reasonably be expected to have a
Material Adverse Effect.
(iii) There
is no term or provision of any Law or Order applicable to or
binding upon the Company, that has had or would reasonably be
expected to have a Material Adverse Effect. To the Knowledge of the
Company, Parent or Seller, none of the employees of the Company or
any of its Subsidiaries is in violation of any contract or covenant
(either with the Company or with another entity) relating to
employment, patent, other proprietary information disclosure,
non-competition, or non-solicitation, other than any such
violations that would not reasonably be expected to have a Material
Adverse Effect.
(k)
Compliance with Securities Laws . Subject to the accuracy of
the representations made by the Purchaser in Section
5 hereof, the offer and
transfer of the Purchased Shares to the Purchaser is exempt from
the registration and prospectus delivery requirements of the
Securities Act. Neither the Company, nor any of its Subsidiaries or
Affiliates, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising,
including but not limited to, advertisement, articles, notices or
other communications published in any newspaper, magazine or
similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising, in connection with the offer
and sale of the Purchased Shares.
(l)
No Integrated Offering . None of the Company, its
Subsidiaries, any of their Affiliates, and any Person acting on
their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under
circumstances that would require registration or qualification of
any of the Securities under the Securities Act or cause the
offering of the Purchased Shares to be integrated with prior or
concurrent offerings by the Company for purposes of the Securities
Act. None of the Company, its Subsidiaries, their Affiliates and
any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would require
registration or qualification of any of the Purchased Shares under
the Securities Act or cause the offering of the Purchased Shares to
be integrated with any other offering.
(m)
Subsidiaries . Schedule 4(m) sets forth each Subsidiary of the Company and
the jurisdiction in which each such Subsidiary is incorporated or
organized, the number of shares of its authorized capital stock,
the number and class of shares thereof duly issued and outstanding,
the names of all stockholders or other equity owners and the number
of shares of stock owned by each stockholder or the amount of
equity owned by each equity owner thereof. Each Subsidiary of the
Company is a duly organized and validly existing corporation or
other entity in good standing under the laws of the jurisdiction of
its incorporation or organization and is duly qualified or
authorized to do business as a foreign corporation or entity and is
in good standing under the laws of each jurisdiction in which it
owns or leases real property and each other jurisdiction in which
the conduct of its business or the ownership of its properties
requires such qualification or authorization, except for such
jurisdictions in which the failure to be qualified and in good
standing would not have a Material Adverse Effect. Each Subsidiary
of the Company has all requisite corporate or entity power and
authority necessary to own, lease and operate all of its properties
and assets and to carry on its business as it is now being
conducted and as currently proposed by its management to be
conducted. The outstanding shares of capital stock or equity
interests of each Subsidiary have been duly authorized and are
validly issued, fully paid and nonassessable and were issued in
compliance with all applicable securities Laws, and all such shares
or other equity interests represented as being owned by the Company
are owned by it free and clear of any and all Liens (including any
option, right of first refusal, proxy, voting trust or agreement,
or Transfer restriction under any stockholder or similar agreement)
except as set forth in Schedule 4(m) . No shares of capital
stock are held by any Subsidiary of the Company as treasury stock.
There is no existing option, warrant, call, right or Contract of
any character to which any Subsidiary of the Company is a party
requiring, and there are no securities of any Subsidiary of the
Company outstanding which upon conversion or exchange would
require, the issuance, sale or other Transfer of any additional
shares of capital stock or other equity interests of any Subsidiary
of the Company or other securities convertible into, exchangeable
for or evidencing the right to subscribe for or purchase shares of
capital stock or other equity interests of any Subsidiary of the
Company. Other than the Subsidiaries of the Company, neither the
Company nor any Subsidiary of the Company owns, directly or
indirectly, any shares of capital stock or equity or ownership
interests in, any other Person (collectively, “
Third-Party Interests ”). Neither the Company
nor any Subsidiary of the Company have any rights to, or are bound
by any commitment or obligation to, acquire by any means, directly
or indirectly, any Third-Party Interests or to make any investment
in any Person.
(i) The
Company has delivered to the Purchaser true, correct and complete
copies of the certificates of incorporation (each certified by the
Secretary of State or other appropriate official of the applicable
jurisdiction of organization) and by-laws (each certified by the
secretary, assistant secretary or other appropriate officer) or
comparable organizational, documents of the Company and each of its
Subsidiaries.
(ii) The
minute books of the Company and each of its Subsidiaries previously
made available to the Purchaser contain true, correct and complete
records of all meetings and accurately, reflect in all material
respects all other corporate action of the stockholders and board
of directors (including committees thereof) of the Company and its
Subsidiaries. The stock certificate books and stock transfer
ledgers of the Company and its Subsidiaries previously made
available to the Purchaser are true, correct and complete. All
stock transfer Taxes levied or payable with respect to all
Transfers of shares of the Company and its Subsidiaries prior to
the date hereof have been paid and appropriate transfer Tax stamps
affixed.
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(o)
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Taxes . Except as set forth on Schedule 4(o)
:
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(i) The
Company and each of its Subsidiaries has filed all Tax Returns that
were required to be filed by it. All such Tax Returns are true,
correct and complete in all material respects and the Company has
maintained, to the extent required, documentation supporting all
positions taken thereon. The Company and each of its Subsidiaries
has timely paid all Taxes which were required to be paid by it. The
amount shown on the Financial Statements as provision for Taxes is
sufficient for payment of all accrued and unpaid Taxes for the
period then ended and all prior periods.
(ii) Subsequent
to July 19, 2005, neither the Company nor any of its Subsidiaries
has been a member of an Affiliated Group filing a Consolidated Tax
Return, other than an Affiliated Group of which Parent is the
parent corporation. Each such Affiliated Group of which Parent is
the parent corporation has filed all Consolidated Tax Returns that
were required to be filed by it for each taxable period during
which any of the Company or any of its Subsidiaries was a member of
such Affiliated Group. All such Consolidated Tax Returns are true,
correct and complete in all material respects and Parent has
maintained, to the extent required by applicable Laws,
documentation supporting all positions taken thereon to the extent
relating to the Company or any of its Subsidiaries. Subsequent to
July 19, 2005, each such Affiliated Group of which Parent is the
parent corporation has timely paid all Taxes which were required to
be paid by it for each taxable period during which any of the
Company or any of its Subsidiaries was a member of such Affiliated
Group. Neither the Company nor any of its Subsidiaries is a party
to or bound by any tax sharing, tax allocation, tax indemnity or
similar agreement or arrangement (whether or not written). Neither
the Company nor any of its Subsidiaries has any liability for the
Taxes of another Person (other than the Company and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
comparable provision of state, local or foreign Tax Law), as a
transferee or successor, by contract, or otherwise.
(iii) Except
as set forth in Schedule 4(o)(iii), none of the Company’s or
any of its Subsidiaries’ federal or state income Tax Returns
or other material Tax Returns have been audited or examined by any
Taxing Authority, and no controversy with respect to Taxes of any
type in a material amount is pending or, to the Knowledge of the
Company, Parent or Seller,
threatened with regard to the
Company or any of its Subsidiaries. There have been no audits or
other examinations of any of the Consolidated Tax Returns filed by
any Affiliated Group for any taxable period during which any of the
Company or any of its Subsidiaries was a member of such Affiliated
Group, and no controversy with respect to Taxes of any type in a
material amount is pending or, to the Knowledge of the Company,
Parent or Seller, threatened with regard to such Affiliated
Group.
(iv) The
Company and each of its Subsidiaries have complied in all material
respects with all applicable Laws relating to the payment and
withholding of Taxes, and has duly and timely withheld and paid
over to the appropriate Tax
