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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DELTAPOINT, INC.
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(EXACT NAME AS SPECIFIED IN ITS CHARTER)
July 11, 1997
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
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<S> <C> <C>
California 7372 77-0216760
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(State of Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
22 Lower Ragsdale, Monterey, California 93940
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(Address of Principal Executive Office)
(408) 648-4000
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(Registrant's telephone number, including area code)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 11, 1997, DeltaPoint, Inc. (the "Company") completed the
acquisition of Site/technologies/inc. ("Site"), a privately held company. In
connection with this acquisition, the Company issued a total of 550,000
shares of its common stock (for which certain registration rights were
granted by the Company) to the former stockholders of Site, in exchange for all
outstanding shares of Site. In addition, the Company agreed to pay certain
royalties on sales of certain software products currently under development
by Site to the former stockholders of Site and employees of Site. Finally,
Stephen Mendel, a member of the board of directors of Site, was appointed as
a member of the board of directors of the Company in connection with the
acquisition.
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Site/technologies/inc.
It is impracticable for the Registrant to provide financial
statements for the business acquired at this time. Such financial
statements will be filed as soon as practicable, but not later
than sixty (60) days after the date hereof.
(b) Pro forma financial information
It is impracticable for the Registrant to provide Pro Forma financial
information assuming the business combination between the Registrant
and Site at this time. Such Pro Forma financial information will be
filed as soon as practicable, but not later than sixty (60) days
after the date hereof.
(c) Exhibits:
Stock Exchange Agreement
Registration Rights Agreement
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Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DELTAPOINT, INC.
(Registrant)
Dated: July 25, 1997 By: /s/ Jeffrey F. Ait
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Name: Jeffrey F. Ait
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Title: Chief Executive Officer
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TABLE OF CONTENTS
PAGE
ARTICLE I THE ACQUISITION. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . 3
1.3 No Further Ownership Rights in Site Preferred Stock . . . . . . . . . 4
1.4 Lost, Stolen or Destroyed Certificates. . . . . . . . . . . . . . . . 4
1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SITE . . . . . . . . . . . . . 4
2.1 Organization of Site. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Site Capital Structure. . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Site Financial Information and Statements . . . . . . . . . . . . . . 6
2.6 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . 6
2.7 Tax and Other Returns and Reports . . . . . . . . . . . . . . . . . . 6
2.8 Restrictions on Business Activities . . . . . . . . . . . . . . . . . 7
2.9 Title to Properties; Absence of Liens and Encumbrances. . . . . . . . 7
2.10 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . 8
2.11 Agreements, Contracts and Commitments . . . . . . . . . . . . . . . . 9
2.12 Interested Party Transactions . . . . . . . . . . . . . . . . . . . .10
2.13 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . .10
2.14 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2.16 Minute Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . .10
2.18 Brokers' and Finders' Fees; Third Party Expenses. . . . . . . . . . .11
2.19 Employee Matters and Benefit Plans. . . . . . . . . . . . . . . . . .11
2.20 Representations Complete. . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PRINCIPAL SITE STOCKHOLDERS. .13
3.1 Site Stockholder Shares . . . . . . . . . . . . . . . . . . . . . . .13
3.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF DELTAPOINT. . . . . . . . . . .14
4.1 Organization, Standing and Power. . . . . . . . . . . . . . . . . . .14
4.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
4.3 SEC Documents; DeltaPoint Financial Statements. . . . . . . . . . . .15
4.4 No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . .15
4.5 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
4.6 Brokers and Finders' Fees . . . . . . . . . . . . . . . . . . . . . .15
4.7 Securities Law Compliance; Due Issuance. . . . . . . . . . . . . . .15
ARTICLE V COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
5.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
5.2 Noncompetition Agreements . . . . . . . . . . . . . . . . . . . . . .16
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5.3 Registration Rights Agreement . . . . . . . . . . . . . . . . . . . .16
5.4 Employment of Site Employees. . . . . . . . . . . . . . . . . . . . .16
5.5 Appointment to DeltaPoint Board . . . . . . . . . . . . . . . . . . .16
5.6 Royalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
5.7 Officers and Directors. . . . . . . . . . . . . . . . . . . . . . . .17
5.8 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
5.9 Payment of Salaries . . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE VI SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION. . .18
6.1 Survival of Representations and Warranties; Indemnification . . . . .18
6.2 DeltaPoint's Knowledge of Breaches. . . . . . . . . . . . . . . . .18
6.3 Materiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
6.4 No Right of Contribution. . . . . . . . . . . . . . . . . . . . . . .19
6.5 Third-Party Claims. . . . . . . . . . . . . . . . . . . . . . . . . .19
6.6 Indemnification of Principal Site Stockholders. . . . . . . . . . . .19
6.7 Site Stockholder Representative . . . . . . . . . . . . . . . . . . .19
ARTICLE VII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . .20
7.1 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . .20
7.2 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
7.3 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
7.4 Entire Agreement; Assignment. . . . . . . . . . . . . . . . . . . . .20
7.5 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
7.6 Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
7.7 Governing Law; Forum. . . . . . . . . . . . . . . . . . . . . . . . .20
7.8 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . .21
7.9 Specific Performance. . . . . . . . . . . . . . . . . . . . . . . . .21
7.10 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . .21
7.11 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . .21
7.12 No Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . . . .21
7.13 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
7.14 Independent Counsel . . . . . . . . . . . . . . . . . . . . . . . . .22
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INDEX OF EXHIBITS
EXHIBIT DESCRIPTION
Exhibit A Site Certificate of Incorporation
Exhibit B Site Bylaws
Exhibit C Form of Optionee Release
Exhibit D Form of Non-Compete Agreement
Exhibit E Form of Registration Rights Agreement
Exhibit F Form of Employee Release
Exhibit G Form of Allan Kaplan Release
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<PAGE>
STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT (this "AGREEMENT") is made and entered
into as of July 11, 1997 among (i) DeltaPoint, Inc., a California
corporation ("DELTAPOINT"), (ii) Site/technologies/inc., a Delaware
corporation ("SITE"), (iii), only for the purpose of Articles I, VI and VII
of this Agreement, those persons or entities listed on the signature pages
hereof under the caption Principal Site Stockholders (the "PRINCIPAL SITE
STOCKHOLDERS"), and (iv), only for the purpose of agreeing to the terms of
Articles I and VII of this Agreement, those persons or entities listed on the
signature pages hereof under the caption Other Site Stockholders (the "OTHER
SITE STOCKHOLDERS").
RECITALS
A. The Boards of Directors of each of Site and DeltaPoint believe it
is in the best interests of each company and their respective stockholders
that DeltaPoint acquire all of the capital stock of Site on the terms set
forth herein (the "ACQUISITION") and, in furtherance thereof, have approved
the Acquisition.
B. The stockholders of Site have approved the Acquisition.
C. Pursuant to the Acquisition, among other things, and subject to the
terms and conditions of this Agreement, all of the issued and outstanding
shares of capital stock of Site shall be converted into the right to receive
certain shares of voting Common Stock of DeltaPoint ("DELTAPOINT COMMON
STOCK") and certain cash.
D. Site, DeltaPoint and the Principal Site Stockholders desire to make
certain representations and warranties and other agreements in connection
with the Acquisition.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration, intending to be legally bound hereby the parties agree as
follows:
ARTICLE I
THE ACQUISITION
I.1 EFFECT ON CAPITAL STOCK. Subject to the terms and conditions of
this Agreement, by virtue of the Acquisition and without any action on the
part of Site or the holder of any shares of Site Common Stock, the following
shall occur upon the signing of this Agreement by all of the parties hereto:
(a) CONVERSION OF SITE SERIES B PREFERRED STOCK. Each share of
Series B Preferred Stock of Site (collectively, the "SITE SERIES B STOCK")
issued and outstanding immediately at such time will be canceled and
extinguished and be converted automatically into the right to receive (i)
that number of shares of DeltaPoint Common Stock equal to the Series B
Exchange Ratio (as defined below in this Section 1.1), upon surrender of the
certificate representing such share of Site Series B Stock in the manner
provided in Section 1.2, (ii) that amount of cash (payable by check) equal to
$100 divided by the Aggregate Series B Number (as defined below in this
Section 1.1) and (iii) the royalty payments specified in Section 5.6 hereof.
(b) CONVERSION OF SITE SERIES A PREFERRED STOCK. Each share of
Series A Preferred Stock of Site (collectively, the "SITE SERIES A STOCK")
issued and outstanding immediately at such time will be canceled and
extinguished and be converted automatically into the right to receive (i)
that number of shares of
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DeltaPoint Common Stock equal to the Series A Exchange Ratio (as defined
below in this Section 1.1), upon surrender of the certificate representing
such share of Site Series A Stock in the manner provided in Section 1.2, (ii)
that amount of cash (payable by check) equal to $100 divided by the Aggregate
Series A Number (as defined below in this Section 1.1) and (iii) the royalty
payments specified in Section 5.6.
(c) CONVERSION OF SITE COMMON STOCK. Each share of Common Stock
of Site (collectively, the "SITE COMMON STOCK," together with the Site Series
A Stock and the Site Series B Stock, the "SITE STOCK") issued and outstanding
immediately at such time transferred to DeltaPoint in exchange for the right
to receive from DeltaPoint that amount of cash (payable by check) equal to
$100 divided by the Aggregate Common Number (as defined in this Section 1.1).
(d) CANCELLATION OF SITE-OWNED STOCK. Each share of Site Stock
owned by Site or any direct or indirect wholly-owned subsidiary of Site
immediately prior to the Acquisition shall be canceled and extinguished
without any conversion thereof.
(e) FRACTIONAL SHARES. No fraction of a share of DeltaPoint
Common Stock will be issued. Rather, in lieu thereof, each holder of shares
of Site Stock who would otherwise be entitled to a fraction of a share of
DeltaPoint Common Stock (after aggregating all fractional shares of
DeltaPoint Common Stock to be received by such holder) shall be entitled to
receive from DeltaPoint an amount of cash (rounded to the nearest whole cent)
equal to the product of such fraction multiplied by DeltaPoint Closing Price.
(f) DEFINITIONS.
(i) AGGREGATE SERIES A NUMBER. The "Aggregate Series A
Number" shall mean the aggregate number of shares of Site Series A Stock
outstanding immediately prior to the Acquisition.
(ii) AGGREGATE SERIES B NUMBER. The "Aggregate Series B
Number" shall mean the aggregate number of shares of Site Series B Stock
outstanding immediately prior to the Acquisition.
(iii) AGGREGATE COMMON NUMBER. The "Aggregate Common Number"
shall mean the aggregate number of shares of Site Common Stock outstanding
immediately prior to the Acquisition.
(iv) SERIES A EXCHANGE RATIO. The "Series A Exchange Ratio"
shall mean the quotient obtained by dividing (x) the 105,134 by (y) the
Aggregate Series A Number.
(v) SERIES B EXCHANGE RATIO. The "Series B Exchange Ratio"
shall mean the quotient obtained by dividing (x) the 396,152 by (y) the
Aggregate Series B Number.
(vi) DELTAPOINT CLOSING PRICE. The "DeltaPoint Closing
Price" shall be $1.49271.
I.2 SURRENDER OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the date hereof, DeltaPoint shall
designate the exchange agent for the DeltaPoint Common Stock or a suitable
alternative agent to act as exchange agent (the "EXCHANGE AGENT") for the
Acquisition.
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(b) DELTAPOINT TO PROVIDE COMMON STOCK AND CHECKS. Promptly after
the date hereof, DeltaPoint shall make available to the Exchange Agent for
exchange in accordance with this Article I, the aggregate number of shares of
DeltaPoint Common Stock and checks for the amounts of cash issuable pursuant
to Section 1.1 in exchange for outstanding shares of Site Stock.
(c) EXCHANGE PROCEDURES. Promptly after the date hereof,
DeltaPoint shall cause to be mailed to each holder of record of a certificate
or certificates (the "CERTIFICATES") which immediately prior to the date
hereof represented outstanding shares of Site Stock and which shares were
converted into the right to receive shares of DeltaPoint Common Stock and/or
cash in accordance with the terms of Section 1.1, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates
to the Exchange Agent and which shall be in such form and have such other
provisions as DeltaPoint may reasonably specify) and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for cash and
certificates representing shares of DeltaPoint Common Stock in the amounts
determined in accordance with the terms of Section 1.1. Upon surrender of a
Certificate to the Exchange Agent for cancellation or transfer to DeltaPoint,
together with such letter of transmittal, duly completed and validly executed
in accordance with the instructions thereto, the holder of such Certificate
shall be entitled to receive in exchange therefor (A) the amount of cash
compensation determined in accordance with the terms of Section 1.1 and (B) a
certificate representing the number of whole shares of DeltaPoint Common
Stock to which such holder is entitled pursuant to Section 1.1, and the
Certificate so surrendered shall forthwith be canceled or transferred to
DeltaPoint in accordance with Section 1.1. Until so surrendered, each
outstanding Certificate that, prior to the date hereof, represented shares of
Site Stock will be deemed from and after the date hereof, for all corporate
purposes, subject to Section 1.2(d) as to the payment of dividends or other
distributions, to evidence the ownership of the number of full shares of
DeltaPoint Common Stock into which such shares of Site Stock shall have been
so converted and/or the right to receive an amount in cash in accordance with
Section 1.1.
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to DeltaPoint Common Stock
declared or made after the Acquisition and with a record date after the
Acquisition will be paid to the holder of any unsurrendered Certificate with
respect to the shares of DeltaPoint Common Stock represented thereby until
the holder of record of such Certificate shall surrender such Certificate.
Subject to applicable law, following surrender of any such Certificate, there
shall be paid to the record holder of the certificates representing whole
shares of DeltaPoint Common Stock issued in exchange therefor, without
interest, at the time of such surrender, the amount of dividends or other
distributions with a record date after the Acquisition theretofore payable
with respect to such whole shares of DeltaPoint Common Stock.
(e) TRANSFERS OF OWNERSHIP. If any certificate for shares of
DeltaPoint Common Stock is to be issued in a name other than that in which
the Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the
person requesting such exchange will have paid to DeltaPoint or any agent
designated by it any transfer or other taxes required by reason of the
issuance of a certificate for shares of DeltaPoint Common Stock in any name
other than that of the registered holder of the Certificate surrendered, or
established to the satisfaction of DeltaPoint or any agent designated by it
that such tax has been paid or is not payable.
(f) NO LIABILITY. Notwithstanding anything to the contrary in
this Section 1.2, no party hereto or its agents (including, without
limitation, the Exchange Agent) shall be liable to a holder of shares of
DeltaPoint Common Stock, Site Common Stock, Site Series A Stock or Site
Series B Stock for any amount
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properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
I.3 NO FURTHER OWNERSHIP RIGHTS IN SITE PREFERRED STOCK. All cash and
shares of DeltaPoint Common Stock issued upon the surrender for exchange of
shares of Site Series A Stock and Site Series B Stock in accordance with the
terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Site Series A Stock or Site Series B
Stock, as the case may be, and there shall be no further registration of
transfers on the records of Site of shares of Site Series A Stock or Site
Series B Stock which were outstanding immediately prior to the Acquisition.
If, after the Acquisition, Certificates are presented to DeltaPoint for any
reason, they shall be canceled and exchanged as provided in this Article I.
I.4 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates evidencing shares of Site Common Stock, Site Series A Stock or
Site Series B Stock shall have been lost, stolen or destroyed, DeltaPoint
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, such shares of
DeltaPoint Common Stock and cash as may be required pursuant to Section 1.1;
provided, however, that DeltaPoint may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably
direct as indemnity against any claim that may be made against DeltaPoint
with respect to the Certificates alleged to have been lost, stolen or
destroyed.
I.5 INTENT OF PARTIES REGARDING TAXATION. The parties hereto intend
that the exchange of Site Stock contemplated hereby shall be a taxable
disposition by the holders of Site Stock.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SITE
Site hereby represents and warrants to DeltaPoint that, as of the date
of this Agreement and subject to such exceptions as are specifically
disclosed, with reference to the appropriate section number, in the Site
Disclosure Schedule provided to DeltaPoint on the date hereof (the "SITE
DISCLOSURE SCHEDULE"), as follows:
II.1 ORGANIZATION OF SITE. Site is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Site has the corporate power to own its properties and to carry on
its business as now being conducted and as proposed to be conducted by Site.
Site is duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which the failure to be so qualified
would have a Material Adverse Effect (as used in this Agreement, the term
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
assets (including intangible assets), financial condition or results of
operations of Site or DeltaPoint, as applicable). Attached hereto as
EXHIBITS A AND B are true and correct copies of Site's Certificate of
Incorporation and Bylaws, respectively, each as amended to date.
II.2 SITE CAPITAL STRUCTURE.
(a) The authorized capital stock of Site consists only of
20,000,000 shares of authorized Site Common Stock, of which 2,250,000 shares
are issued and outstanding, and 2,000,000 shares of authorized Preferred
Stock, 596,000 shares of which has been designated Series A Preferred Stock,
all of which are outstanding, and 1,000,000 shares of which has been
designated Series B Preferred Stock, 983,296 shares of which are outstanding.
The Site Stock is held of record by the persons, with the addresses of record
and in the amounts set forth on the Site Disclosure Schedule. All
outstanding shares of Site Stock are duly authorized, validly issued, fully
paid and non-assessable and not subject to preemptive rights created by
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statute, the Certificate of Incorporation or Bylaws of Site or any agreement
to which Site is a party or by which it is bound.
(b) Site has reserved 700,000 shares of Common Stock for issuance
to employees, officers, directors and consultants pursuant to its 1994 Stock
Plan. There are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which Site or any
stockholder of Site is a party or by which Site is bound obligating Site to
issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of the capital stock of Site. All
options that were granted pursuant to Site's 1994 Stock Plan and were
outstanding as of June 30, 1997 have been cancelled pursuant to releases in
the form of EXHIBIT C hereto by each holder thereof.
II.3 SUBSIDIARIES. Site does not have and has never had any
subsidiaries or affiliated companies and does not otherwise own and has never
otherwise owned any shares of capital stock or any interest in, and does not
control, directly or indirectly, any business entity.
II.4 AUTHORITY. Site has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Site, including approval by the
requisite number of stockholders of Site (including all holders of Site Stock
except for those listed on the Site Disclosure Schedule) of the Acquisition
and any other transactions contemplated hereby for which approval of the
Principal Site Stockholders is required under applicable law. Site's Board
of Directors has approved the Acquisition and this Agreement. This Agreement
has been duly executed and delivered by Site and constitutes the valid and
binding obligation of Site, enforceable in accordance with its terms. The
execution and delivery of this Agreement by Site does not, and the
consummation of the transactions contemplated hereby will not, conflict with,
or result in any violation of, or default under (with or without notice or
lapse of time, or both), or give rise to a right of termination,
cancellation, modification or acceleration of any material obligation or loss
of any material benefit under (any such event, a "CONFLICT") (i) any
provision of the Certificate of Incorporation or Bylaws of Site or (ii) any
mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Site or its properties or
assets. No consent, waiver, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other federal, state, county, local or foreign governmental
authority, instrumentality, agency or commission ("GOVERNMENTAL ENTITY") or
any third party, including a party to any agreement with Site (so as not to
trigger any Conflict) is required by or with respect to Site in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for those consents that have been
previously obtained and are listed on the Site Disclosure Schedule.
II.5 SITE FINANCIAL INFORMATION AND STATEMENTS. The Site Disclosure
Schedule sets forth Site's material assets and liabilities as of the date
hereof. Such information is complete and correct in all material respects
and present fairly the financial condition of Site. The Site Disclosure
Schedule sets forth the Company's audited balance sheets as of December 31,
1994 and December 31, 1995 (the "BALANCE SHEETS") and the audited related
statements of operations and cash flows for the years then ended
(collectively, the "COMPANY FINANCIALS"). The Company Financials are
complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied on
a basis consistent throughout the periods indicated and consistent with each
other. The Company Financials present fairly the financial condition and
operating results of the Company as of the dates and during the periods
indicated therein.
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II.6 NO UNDISCLOSED LIABILITIES. Site does not have any liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement
of any type, whether accrued, absolute, contingent, matured, unmatured or
other (whether or not required to be reflected in financial statements in
accordance with generally accepted accounting principles), which individually
or in the aggregate, has not been reflected in the Site Disclosure Schedule.
II.7 TAX AND OTHER RETURNS AND REPORTS.
(a) TAX RETURNS AND AUDITS.
(i) Site as of the Acquisition will have prepared and filed
all required federal, state, local and foreign returns, estimates,
information statements and reports ("RETURNS") relating to any and all taxes
concerning or attributable to Site or its operations and such Returns are
true and correct in all material respects and have been completed in all
material respects in accordance with applicable law.
(ii) Site has (A) paid or accrued all taxes it is required
to have paid or accrued and (B) withheld with respect to its employees all
federal and state income taxes, The Federal Insurance Contribution Act
("FICA"), the Federal Unemployment Tax Act ("FUTA") and other taxes required
to have been withheld.
(iii) Site has not been delinquent in the payment of any tax
nor is there any tax deficiency outstanding, proposed or assessed against
Site, nor has Site executed any waiver of any statute of limitations on or
extending the period for the assessment or collection of any tax.
(iv) No audit or other examination of any Return of Site is
currently in progress, nor has Site been notified of any request for such an
audit or other examination.
(v) Site does not have any material (individually or in the
aggregate) liabilities for unpaid federal, state, local and foreign taxes,
whether asserted or unasserted, contingent or otherwise, and Site has no
knowledge of any basis for the assertion of any such material (individually
or in the aggregate) liability attributable to Site, its assets or operations.
(vi) Site has provided to DeltaPoint copies of all federal
and state income and all state sales and use Tax Returns for all periods
since the date of Site's incorporation.
(vii) There are (and as of immediately following the
Effective Date there will be) no material (individually or in the aggregate)
liens, pledges, charges, claims, security interests or other material
(individually or in the aggregate) encumbrances of any sort ("LIENS") on the
assets of Site relating to or attributable to taxes.
(viii) Site has no knowledge of any basis for the assertion of
any claim relating or attributable to taxes which, if adversely determined,
would result in any material (individually or in the aggregate) Lien on the
assets of Site.
(ix) None of Site's assets are treated as "tax-exempt use
property" within the meaning of Section 168(h) of the Internal Revenue Code
of 1986, as amended (the "CODE").
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(x) As of the Acquisition, there will not be any contract,
agreement, plan or arrangement, including, but not limited to, the provisions
of this Agreement, covering any employee or former employee of Site that,
individually or collectively, could give rise to the payment of any amount
that would not be deductible pursuant to Section 280G or 162 of the Code.
(xi) Site has not filed any consent agreement under Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to
any disposition of a subsection (f) asset (as defined in Section 341(f)(4) of
the Code) owned by Site.
(xii) Site is not a party to a tax sharing or allocation
agreement nor does Site owe any amount under any such agreement.
(xiii) Site is not, and has not been at any time, a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.
(xiv) Site's tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income
tax deductions is accurately reflected on Site's tax books and records.
II.8 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement
(noncompete or otherwise), commitment, judgment, injunction, order or decree
to which Site is a party or otherwise binding upon Site which has or
reasonably could be expected to have the effect of prohibiting or impairing
any business practice of Site, any acquisition of property (tangible or
intangible) by Site or the conduct of business by Site. Without limiting the
foregoing, Site has not entered into any agreement under which Site is
restricted from selling, licensing or otherwise distributing any of its
current, planned or proposed products or services to any class of customers,
in any geographic area, during any period of time or in any segment of the
market.
II.9 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) Site owns no real property, nor has it ever owned any real
property. The Site Disclosure Schedule sets forth a list of all real
property currently, or at any time in the past, leased by Site, the name of
the lessor, the date of the lease and each amendment thereto and, with
respect to any current lease, the aggregate annual rental and/or other fees
payable under any such lease. All such current leases are in full force and
effect, are valid and effective in accordance with their respective terms,
and there is not, under any of such leases, any existing default or event of
default (or event which with notice or lapse of time, or both, would
constitute a default).
(b) Site has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its material
tangible properties and assets, real, personal and mixed, used or held for
use in its business, free and clear of any Liens, except as reflected on Site
Disclosure Schedule and except for liens for taxes not yet due and payable
and such imperfections of title and encumbrances, if any, which are not
material in character, amount or extent, and which do not materially detract
from the value, or materially interfere with the present use, of the property
subject thereto or affected thereby.
II.10 INTELLECTUAL PROPERTY.
(a) Site is the sole and exclusive owner, with all right, title
and interest in and to (free and clear of any liens or encumbrances), or has
a right to use (and is not contractually obligated to pay any
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compensation to any third party in respect thereof), the patents, trademarks,
trade names, service marks, copyrights, and any applications, therefor listed
in the attached Site Disclosure Schedule, and net lists, schematics,
technology, know-how, computer software programs or applications (in both
source code and object code form), and tangible or intangible proprietary
information or material that are used in the business of Site as currently
conducted (the "SITE INTELLECTUAL PROPERTY RIGHTS").
(b) The Site Disclosure Schedule set forth a complete list of all
patents, registered and material unregistered trademarks, registered
copyrights, trade names and service marks, and any applications therefor,
included in Site Intellectual Property Rights, and specifies, where
applicable, the jurisdictions in which each such Site Intellectual Property
Right has been issued or registered or in which an application for such
issuance and registration has been filed, including the respective
registration or application numbers and the names of all registered owners.
(c) Except as set forth in the Site Disclosure Schedule, no claims
with respect to Site Intellectual Property Rights have been asserted or are
threatened by any person, nor, to the best of Site's knowledge, are there any
valid grounds for any BONA FIDE claims, (i) to the effect that the
manufacture, sale, licensing or use of any of the products of Site infringes
on any copyright, patent, trade mark, service mark, trade secret or other
proprietary right of others, (ii) against the use by Site of any trademarks,
service marks, trade names, trade secrets, copyrights, maskworks, patents,
technology, know-how or computer software programs and applications used in
Site's business as currently conducted or as proposed to be conducted by
Site, or (iii) challenging the ownership by Site or the validity or
effectiveness of any of Site Intellectual Property Rights. All registered
trademarks, service marks and copyrights held by Site are valid. To the best
of Site's knowledge, except as set forth in the Site Disclosure Schedule,
Site has not infringed, and the business of Site as currently conducted or as
proposed to be conducted does not infringe, any copyright, patent, trademark,
service mark, trade secret or other proprietary right of any third party. To
the best of Site's knowledge, except as set forth in the Site Disclosure
Schedule, there is no material unauthorized use, infringement or
misappropriation of any of Site Intellectual Property Rights by any third
party, including any employee or former employee of Site. No Site
Intellectual Property Right or product of Site is subject to any outstanding
decree, order, judgment, or stipulation restricting in any manner the
licensing thereof by Site.
(d) Each employee, consultant or contractor of Site given access
to proprietary and confidential information of Site has executed a
proprietary information and confidentiality agreement substantially in Site's
standard forms. All software included in Site Intellectual Property Rights is
either commercially available software subject to shrinkwrap license or
original with Site and has been either created by employees of Site on a
work-for-hire basis or by consultants or contractors who have created such
software themselves and have assigned all rights they may have had in such
software to Site.
II.11 AGREEMENTS, CONTRACTS AND COMMITMENTS. Site does not have, is
not a party to nor is it bound by:
(i) any fidelity or surety bond or completion bond and any
agreement of indemnification or guaranty,
(ii) any leases of personal property having a value,
individually or in the aggregate, in excess of $10,000,
(iii) any agreement, contract or commitment containing any
covenant limiting the freedom of Site to engage in any line of business or to
compete with any person,
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(iv) any agreements, contracts or commitments relating to
capital expenditures and involving, individually or in the aggregate, future
payments in excess of $10,000,
(v) any agreement, contract or commitment relating to the
disposition or acquisition of assets or any interest in any business
enterprise outside the ordinary course of Site's business,
(vi) any mortgages, indentures, loans or credit agreements,
security agreements or other agreements or instruments relating to the
borrowing of money or extension of credit, including guaranties referred to
in clause (i) hereof,
(vii) any purchase orders or contracts for the purchase of
raw materials involving, individually or in the aggregate, $10,000 or more,
(viii) any construction contracts,
(ix) any distribution, joint marketing or development
agreement,
(x) any agreement pursuant to which Site has granted or may
grant in the future, to any party, a source-code license or option or other
right to use or acquire, contingent or otherwise, source-code,
(xi) any management, employment, severance, consulting,
relocation, repatriation, expatriation, visas, work permit or similar
agreement or contract between Site or any affiliate thereof and any
consultant or any current, former, or retired employee, officer, or director
of Site or any affiliate thereof, or
(xii) any other agreements, contracts or commitments that
involve, individually or in the aggregate, $10,000 or more or is not
cancelable without penalty within thirty (30) days.
Site has not materially breached, violated or defaulted under, or received
notice that it has breached, violated or defaulted under, any of the terms or
conditions of any agreement, contract or commitment to which it is bound
(including those set forth in any of the Site Disclosure Schedule) (any such
agreement, contract or commitment, a "CONTRACT"). Each Contract is in full
force and effect and is not subject to any default thereunder of which Site
has knowledge by any party obligated to Site pursuant thereto.
II.12 INTERESTED PARTY TRANSACTIONS. No officer, director or
stockholder of Site (nor any ancestor, sibling, descendant or spouse of any
of such persons, or any trust, partnership or corporation in which any of
such persons has or has had an interest), has or has had, directly or
indirectly, (i) an economic interest in any entity which furnished or sold,
or furnishes or sells, services or products similar to those Site furnishes
or sells, or proposes to furnish or sell, (ii) an economic interest in any
entity that purchases from or sells or furnishes to Site any goods or
services or (iii) a beneficial interest in any Contract; provided, that
ownership of no more than one percent (1%) of the outstanding voting stock of
a publicly-traded corporation shall not be deemed an "economic interest in
any entity" for purposes of this Section 2.12.
II.13 COMPLIANCE WITH LAWS. Site has complied in all material
respects with, is not in material violation of, and has not received any
notices of violation with respect to, any foreign, federal, state or local
statute, law or regulation.
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II.14 LITIGATION. There is no action, suit or proceeding of any
nature pending or, to Site's knowledge, threatened against Site, its
properties or any of its officers or directors (in their respective
capacities as such). There is no investigation pending or threatened against
Site, its properties or any of its officers or directors by or before any
governmental entity. The Site Disclosure Schedule sets forth, with respect
to any pending or threatened action, suit, proceeding or investigation, the
forum, the parties thereto, the subject matter thereof and the amount of
damages claimed or other remedy requested. No governmental entity has at any
time challenged or questioned the legal right of Site to manufacture, offer
or sell any of its products in the present manner or style thereof. The Site
Disclosure Schedule also lists all suits and legal actions initiated by Site.
II.15 INSURANCE. With respect to the insurance policies and
fidelity bonds covering the assets, business, equipment, properties,
operations, employees, officers and directors of Site, there is no material
claim by Site pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds. All premiums due and payable under all such policies and
bonds have been paid, and Site is otherwise in material compliance with the
terms of such policies and bonds (or other policies and bonds providing
substantially similar insurance coverage). Site has no knowledge of any
threatened termination of, or material premium increase with respect to, any
of such policies. Such policies of insurance and bonds are the type and in
the amounts customarily carried by persons conducting businesses similar to
those of Site.
II.16 MINUTE BOOKS. The minute books of Site made available to
counsel for DeltaPoint are the only minute books of Site and contain an
accurate summary of all meetings of directors (or committees thereof) and
stockholders or actions by written consent since the time of incorporation of
Site.
II.17 ENVIRONMENTAL MATTERS. Site has not operated any underground
storage tanks, and has no knowledge of the existence, at any time, of any
underground storage tank (or related piping or pumps), at any property that
Site has at any time owned, operated, occupied or leased. Site has not
released any amount of any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law to be
radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including, without limitation, PCBs, asbestos, oil and petroleum
products, urea-formaldehyde and all substances listed as a "hazardous
substance," "hazardous waste," "hazardous material" or "toxic substance" or
words of similar import, under any law, including but not limited to, the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended; the Resource Conservation and Recovery Act of 1976, as
amended; the Federal Water Pollution Control Act, as amended; the Clean Air
Act, as amended, and the regulations promulgated pursuant to such laws (a
"HAZARDOUS MATERIAL"). No Hazardous Materials are present as a result of the
actions or omissions of Site, or, to Site's knowledge, as a result of any
actions of any third party or otherwise, in, on or under any property,
including the land and the improvements, ground water and surface water
thereof, that Site has at any time owned, operated, occupied or leased.
II.18 BROKERS' AND FINDERS' FEES; THIRD PARTY EXPENSES. Site has
not incurred, nor will incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby other
than as to be satisfied pursuant to the terms of Section 5.8 hereof. The
Site Disclosure Schedule sets forth Site's current reasonable estimate of all
Third Party Expenses (as defined in Section 5.1) expected to be incurred by
Site in connection with the negotiation and effectuation of the terms and
conditions of this Agreement and the transactions contemplated hereby.
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II.19 EMPLOYEE MATTERS AND BENEFIT PLANS.
(a) DEFINITIONS. With the exception of the definition of
"Affiliate" set forth in Section 2.19(a)(i) below (which definition shall
apply only to this Section 2.19), for purposes of this Agreement, the
following terms shall have the meanings set forth below:
(i) "AFFILIATE" shall mean any other person or entity under
common control with Site within the meaning of Section 414(b), (c), (m) or
(o) of the Code and the regulations thereunder;
(ii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;
(iii) "SITE EMPLOYEE PLAN" shall refer to any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or
remuneration of any kind, whether formal or informal, currently in effect or
previously in effect, funded or unfunded and whether or not legally binding,
including without limitation, each "employee benefit plan", within the
meaning of Section 3(3) of ERISA which is or has been maintained, contributed
to, or required to be contributed to, by Site or any Affiliate for the
benefit of any "Employee" (as defined below), and pursuant to which Site or
any Affiliate has or may have any material liability contingent or otherwise;
(iv) "EMPLOYEE" shall mean any current, former, or retired
employee, officer, or director of Site or any Affiliate;
(v) "IRS" shall mean the Internal Revenue Service;
(vi) "MULTIEMPLOYER PLAN" shall mean any "Pension Plan" (as
defined below) which is a "multiemployer plan", as defined in Section 3(37)
of ERISA; and
(vii) "PENSION PLAN" shall refer to each Site Employee Plan
which is an "employee pension benefit plan", within the meaning of Section
3(2) of ERISA.
(b) SCHEDULE. The Site Disclosure Schedule contains an accurate
and complete list of each Site Employee Plan. Site does not now, nor has it
ever, maintained, established, sponsored, participated in, or contributed to,
(i) any Pension Plan which is subject to Part 3 of Subtitle B of Title I of
ERISA, Title IV of ERISA or Section 412 of the Code or (ii) any plan under
Section 401(k) of the Code. At no time has Site contributed to or been
requested to contribute to any Multiemployer Plan.
(c) DOCUMENTS. Site has provided to DeltaPoint (i) correct and
complete copies of all documents embodying each Site Employee Plan, including
summary plan descriptions and including all amendments thereto and written
interpretations thereof; and (ii) all material written agreements and
contracts relating to each Site Employee Plan, including, but not limited to,
administration service agreements, group annuity contracts and group
insurance contracts.
(d) EMPLOYEE PLAN COMPLIANCE. Site has performed in all material
respects all obligations required to be performed by it under, is not in
default or violation of, and has no knowledge of any default or violation by
any other party of any Site Employee Plan, and each Site Employee Plan has
been established and maintained in all material respects in accordance with
its terms and in compliance with all
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applicable laws, statutes, orders, rules and regulations, including but not
limited to ERISA or the Code.
(e) NO POST-EMPLOYMENT OBLIGATIONS. No Site Employee Plan
provides, or has any liability to provide, life insurance, medical or other
employee benefits to any Employee upon his or her retirement or termination
of employment for any reason, except as may be required by the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") or any other applicable
statute, and Site has never represented, promised or contracted (whether in
oral or written form) to any Employee (either individually or to Employees as
a group) that such Employee(s) would be provided with life insurance, medical
or other employee welfare benefits upon their retirement or termination of
employment, except to the extent required by statute.
(f) COBRA REQUIREMENTS. Neither Site nor any Affiliate has, in
any material respect, violated any of the health care continuation
requirements of COBRA or any similar provisions of state law applicable to
its employees.
(g) EFFECT OF TRANSACTION.
(i) The execution of this Agreement and the consummation of
the transactions contemplated hereby will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under
any Site Employee Plan or trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any Employee.
(ii) No payment or benefit which will or may be made by Site
or DeltaPoint or any of their respective affiliates with respect to any
Employee will be characterized as an "excess parachute payment", within the
meaning of Section 280G(b)(1) of the Code.
(h) EMPLOYMENT MATTERS. Site (i) is in compliance in all material
respects with all applicable foreign, federal, state and local laws, rules
and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to
Employees; (ii) has withheld all amounts required by law or by agreement to
be withheld from the wages, salaries and other payments to Employees; (iii)
is not liable for any arrears of wages or any taxes or any penalty for
failure to comply with any of the foregoing; and (iv) is not liable for any
payment to any trust or other fund or to any governmental or administrative
authority, with respect to unemployment compensation benefits, social
security or other benefits or obligations for Employees (other than routine
payments to be made in the normal course of business and consistent with past
practice).
(i) LABOR. No work stoppage or labor strike against Site is
pending or, to the best knowledge of Site, threatened. Site is not involved
in or, to the knowledge of Site, threatened with, any labor dispute,
grievance, or litigation relating to labor, safety or discrimination matters
involving any Employee, including, without limitation, charges of unfair
labor practices or discrimination complaints, which, if adversely determined,
would, individually or in the aggregate, result in material liability to
Site. Neither Site nor any of its subsidiaries has engaged in any unfair
labor practices within the meaning of the National Labor Relations Act which
would, individually or in the aggregate, directly or indirectly result in a
material liability to Site. Site is not presently, nor has it been in the
past, a party to, or bound by, any collective bargaining agreement or union
contract with respect to Employees and no collective bargaining agreement is
being negotiated by Site.
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II.20 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by Site (as modified by the Site Disclosure Schedule), nor
any written statement made in any schedule or certificate furnished by Site
pursuant to this Agreement, contains any untrue statement of a material fact,
or omits to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which
made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PRINCIPAL SITE STOCKHOLDERS
Each of the Principal Site Stockholders hereby represents and warrants
to DeltaPoint, subject to such exceptions as are specifically disclosed, with
reference to the appropriate section number, in the Site Disclosure Schedule
provided to DeltaPoint on the date hereof (the "SITE DISCLOSURE SCHEDULE"),
as follows:
III.1 SITE STOCKHOLDER SHARES.
(a) Such Site Stockholder owns of record and beneficially all
shares of Site Stock set forth opposite such Site Stockholder's name under
Section 2.2 of the Site Disclosure Schedule; and
(b) Such Site Stockholder has good and marketable title to such
shares of Site Stock free and clear of all liens, claims, security interests,
charges, options, or other encumbrances of any kind.
III.2 AUTHORITY. Such Site Stockholder has all requisite power and
authority to enter into this Agreement (and any agreement referenced in
Article V hereto to which such Site Stockholder is a party to) and to
consummate the transactions contemplated hereby (and thereby). This
Agreement, and any agreement referenced in Article V hereto to which such
Site Stockholder is a party to, have been duly executed and delivered by such
Principal Site Stockholders, and constitutes the legally valid and binding
obligations of such Site Stockholder. The execution and delivery of this
Agreement, and any agreement referenced in Article V hereto to which such
Site Stockholder is a party to, by such Site Stockholder does not, and the
consummation of the transactions contemplated hereby and thereby will not,
conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation, modification or acceleration of any obligation or
loss of any benefit under (any such event, a "SH CONFLICT") any mortgage,
indenture, lease, contract or other agreement or instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to such Site Stockholder. No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity or any third party,
including a party to any agreement with such Site Stockholder (so as not to
trigger any SH Conflict) is required by or with respect to such Site
Stockholder in connection with the execution and delivery of this Agreement,
and any agreement referenced in Article V hereto to which such Site
Stockholder is a party to, or the consummation of the transactions
contemplated hereby or thereby, except for those consents that have been
previously obtained and are listed on the Site Disclosure Schedule.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DELTAPOINT
DeltaPoint represents and warrants to Site, subject to such exceptions
as are specifically disclosed, with reference to the appropriate section
number, in the DeltaPoint Disclosure Schedule provided to Site on
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the date hereof (the "DELTAPOINT DISCLOSURE SCHEDULE"), as follows:
IV.1 ORGANIZATION, STANDING AND POWER. DeltaPoint is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California. DeltaPoint has the corporate power to own its properties and
to carry on its business as now being conducted and as proposed to be
conducted by DeltaPoint. DeltaPoint is duly qualified to do business and in
good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would have a Material Adverse Effect.
IV.2 AUTHORITY. DeltaPoint has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of DeltaPoint. This
Agreement have been duly executed and delivered by DeltaPoint and constitutes
the valid and binding obligation of DeltaPoint, enforceable in accordance
with its terms. The execution and delivery of this Agreement by DeltaPoint
does not, and the performance by DeltaPoint of its obligations hereunder will
not, conflict with (i) any provision of the Certificate of Incorporation or
Bylaws of DeltaPoint or (ii) any mortgage, indenture, lease, contract or
other agreement or instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to DeltaPoint or its properties or assets, except where such
conflict would not have a Material Adverse Effect. No consent, waiver,
approval, order or authorization of, or registration, declaration or filing
(the lack of which would have a Material Adverse Effect) with any
Governmental Entity or any third party is required by or with respect to
DeltaPoint in connection with the execution and delivery of this Agreement or
the performance by DeltaPoint of their respective obligations hereunder,
except for those obtained prior to the Acquisition.
IV.3 SEC DOCUMENTS; DELTAPOINT FINANCIAL STATEMENTS. DeltaPoint has
furnished or made available to Site true and complete copies of all reports
or registration statements filed by it with the U.S. Securities and Exchange
Commission (the "SEC") since December 19, 1995, all in the form so filed (all
of the foregoing being collectively referred to as the "SEC DOCUMENTS"). As
of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT") or the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), as the case may be, and none of the SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not
misleading, except to the extent corrected by a document subsequently filed
with the SEC. The financial statements of DeltaPoint, including the notes
thereto, included in the SEC Documents (the "DELTAPOINT FINANCIAL
STATEMENTS") comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance with GAAP
consistently applied (except as may be indicated in the notes thereto or, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) and
present fairly the consolidated financial position of DeltaPoint at the dates
thereof and the consolidated results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
audit adjustments).
IV.4 NO MATERIAL ADVERSE CHANGE. Since the date of the balance sheet
included in DeltaPoint's most recently filed report on Form 10-K or 10-Q,
DeltaPoint has conducted its business in the ordinary course and there has
not occurred: (a) any material adverse change in the financial condition,
liabilities, assets or business of DeltaPoint and its subsidiaries, taken as
a whole; (b) any amendment or change in the Certificate of Incorporation or
Bylaws of DeltaPoint (other than restatements of the Certificate or
Incorporation which did not require stockholders' approval); or (c) any
damage to, destruction or loss of any assets of DeltaPoint,
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(whether or not covered by insurance) that materially and adversely affects
the financial condition or business of DeltaPoint and its subsidiaries, taken
as a whole.
IV.5 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which DeltaPoint has received
any notice of assertion against DeltaPoint, which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement or, if adversely determined, is reasonably
likely to have a material adverse effect on the financial condition or
business of DeltaPoint as a whole.
IV.6 BROKERS AND FINDERS' FEES. DeltaPoint has not incurred, now will
incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby other than (i) as to be
satisfied pursuant to the terms of Section 5.8 hereof or (ii) as otherwise
assumed pursuant to DeltaPoint's purchase of all of the capital stock of Site
hereunder.
IV.7 SECURITIES LAW COMPLIANCE; DUE ISSUANCE. The issuance of the
shares of DeltaPoint Common Stock pursuant to this Agreement are transactions
exempt from the registration provisions under the Securities Act of 1933, as
amended, and applicable state securities laws. Upon issuance of the shares
of DeltaPoint Common Stock to be issued hereunder in accordance with the
terms of this Agreement, such shares shall be duly authorized, validly
issued, fully paid and non-assessable by DeltaPoint and not subject to
preemptive rights created by statute, DeltaPoint's Articles of Incorporation
or Bylaws or any agreement to which DeltaPoint is a party or by which it is
bound.
ARTICLE V
COVENANTS
V.1 EXPENSES. All fees and expenses incurred in connection with the
Acquisition, including without limitation, all legal, accounting, financial
advisory, consulting and all other fees and expenses of third parties ("THIRD
PARTY EXPENSES") incurred by DeltaPoint or Site (but not its stockholders)
other than as to be satisfied pursuant to the terms of Section 5.8 hereof
shall be the obligation of DeltaPoint; PROVIDED, HOWEVER, that DeltaPoint
shall not be responsible for reasonable Third Party Expenses for actual
billed time and expenses of Site exceeding $40,000. The Principal Site
Stockholders shall be responsible for, pro rata with respect to their
relative ownership of Site capital stock immediately prior to the
Acquisition, all other Third Party Expenses.
V.2 NONCOMPETITION AGREEMENTS. Concurrent with the execution and
delivery of this Agreement, DeltaPoint and each of Ron Sauers, Shawn Cannon
and Anil Peres-Da-Silva are entering into a Noncompetition Agreement
substantially in the form of EXHIBIT D hereto.
V.3 REGISTRATION RIGHTS AGREEMENT. Concurrent with the execution and
delivery of this Agreement, DeltaPoint, Allan Kaplan Investments, Ron Sauers,
Shawn Cannon, Anil Peres-Da-Silva and each of those other persons or entities
who or which were preferred stockholders of Site immediately prior to the
Acquisition shall enter into a Registration Rights Agreement substantially in
the form of EXHIBIT E hereto.
V.4 EMPLOYMENT OF SITE EMPLOYEES. Concurrent with the execution and
delivery of this Agreement, DeltaPoint agrees to enter into employment
agreements with Ron Sauers, Shawn Cannon and Anil Peres-Da-Silva (the
"Employees") on terms mutually satisfactory to such Employees and DeltaPoint.
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Such employment agreements shall provide that DeltaPoint will provide office
space located in or about Raleigh, North Carolina for such Employees that
remain in Site's or DeltaPoint's employ and fund Site's operations in such
location sufficiently to permit the employment of such employees that remain
in Site's or DeltaPoint's employ until the later of (i) the first anniversary
of this Agreement or (ii) the date occurring three months after DeltaPoint
gives written notice to such Employees of its intent to re-locate the place
of their employment.
V.5 APPOINTMENT TO DELTAPOINT BOARD. Concurrent with the execution and
delivery of this Agreement, Stephen Mendel is being appointed to serve as a
member of the Board of Directors of DeltaPoint until his successor is elected
and qualified.
V.6 ROYALTY.
(a) DeltaPoint agrees that for the first 12 months after First
Customer Shipment (as defined below) of SiteSweeper 2 by DeltaPoint or Site,
it or Site will pay to those who receive shares of DeltaPoint Common Stock
pursuant to this Agreement (the "Holders") aggregate royalties calculated at
the rate of 5% of net revenues, if any, received by DeltaPoint for units of
SiteSweeper 2 or successor products sold, licensed, sublicensed or
distributed by DeltaPoint, Site, any transferee of the rights to SiteSweeper
2 or any of their related or affiliated entities to unaffiliated third
parties. Such royalties shall be paid to the Holders pro rata in accordance
with the respective number of shares of DeltaPoint Common Stock received by
the Holders pursuant to this Agreement. For purpose of this Section 5.6, the
term "First Customer Shipment" shall mean the first commercial shipment of
SiteSweeper 2 by DeltaPoint or its agents or customers to any retail
distributor or other customer that is: (i) paying a license fee or purchase
price therefor, (ii) not an alpha or beta site evaluation customer of such
product and (iii) not a purchaser of the product through sales over the
Internet or from DeltaPoint's web site. For the purpose of this Section 5.6,
the term "net revenues" shall mean actual cash receipts less taxes, duties,
excises, other governmental charges and fees of any kind, refunds, credits
and returns.
(b) Within forty-five (45) days after the end of each fiscal
quarter during the twelve months after the First Customer Shipment of
SiteSweeper 2, DeltaPoint or Site will provide each of the Holders with a
statement of net revenues and the royalties due to the Holders calculated at
a rate of 5% of such net revenues, if any, received by DeltaPoint for units
of SiteSweeper 2 or successor products sold, licensed, sublicensed or
distributed by DeltaPoint, Site, any transferee of the rights to SiteSweeper
2 or any of their related or affiliated entities to unaffiliated third
parties, during the first year after First Customer Shipment of SiteSweeper 2
(the "ROYALTY STATEMENT"). In conjunction with any such Royalty Statement,
DeltaPoint or Site will pay such each Holder the royalties determined to be
due as a result of such sales in cash or check by wire transfer. The Holders
shall have the right, at their cost, to have an independent auditor of the
Holders' choice perform an audit of the books and financial records of
DeltaPoint, Site or any of their related or affiliated entities to verify the
accuracy and completeness of payments pursuant to this Section 5.6 on
reasonable notice to DeltaPoint during DeltaPoint's business hours at the
expense of the Holders, PROVIDED that such audit shall occur not later than
180 days following the end of the first anniversary of the date of First
Customer Shipment of SiteSweeper 2. If such audit determines that there has
been an underpayment to the Holders, DeltaPoint shall remit such amount
pro-rata to the Holders and if such amount is greater than 10% of the
royalties originally paid, then DeltaPoint shall reimburse the Holders for
the reasonable cost of the audit.
(c) The payments made under this Section 5.6 to Ron Sauers, Shawn
Cannon and Anil Peres-Da-Silva are being made in satisfaction of certain
salary amounts owed to such persons and shall be subject to and conditioned
upon proper withholding of taxes for such payments, which withholdings shall
be
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deducted from such payments. The obligations of DeltaPoint to Ron Sauers,
Shawn Cannon and Anil Peres-Da-Silva set forth in this Section 5.6 and
Section 5.9 shall be subject to each of those individuals entering into a
release in favor of Site and DeltaPoint, in the form of EXHIBIT F hereto.
V.7 OFFICERS AND DIRECTORS. Effective upon the signing and delivery of
this of the Agreement, the officers and directors of Site, pursuant to
resignations and appointments accomplished by Site prior to but effective
upon such time, shall be identical to the officers and directors of
DeltaPoint then in office.
V.8 CERTAIN FEES. Upon the signing and delivery of this of the
Agreement and in full satisfaction of any finder's fees, financial advisory
fees or other fees due to Allan Kaplan Investments in connection with the
transactions contemplated by this Agreement, DeltaPoint shall, subject to
Allan Kaplan Investments executing and delivering to DeltaPoint a release in
the form of EXHIBIT G hereto, issue to Allan Kaplan Investments 33,211 shares
of DeltaPoint Common Stock.
V.9 PAYMENT OF SALARIES. Upon the signing and delivery of this of the
Agreement and in satisfaction of certain salary amounts owed to Ron Sauers,
Shawn Cannon and Anil Peres-Da-Silva, DeltaPoint shall issue to Ron Sauers,
Shawn Cannon and Anil Peres-Da-Silva 8,572, 6,717 and 214 shares,
respectively, of DeltaPoint Common Stock, subject to and conditioned upon
proper withholding of taxes for such payments, which withholdings shall be
(i) paid by such respective persons to Site and/or DeltaPoint or (ii)
deducted from other amounts to be paid to such respective persons by Site
and/or DeltaPoint.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
VI.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
All of the representations and warranties in this Agreement of all parties
hereto shall survive the Acquisition and continue until 5:00 p.m., California
time, on the date which is one year following the date of this Agreement.
The Principal Site Stockholders, jointly and severally, agree to indemnify
and hold harmless each of DeltaPoint, Site and their affiliates for any
claims, losses, liabilities, damages, deficiencies, costs and expenses,
including reasonable attorneys' fees and expenses, and expenses of
investigation and defense (hereinafter individually a "LOSS" and collectively
"LOSSES") incurred by DeltaPoint, Site, their officers, directors, or
affiliates directly or indirectly as a result of (A) any inaccuracy or breach
of a representation or warranty of Site and/or Principal Site Stockholders
contained herein, (B) any failure by Site or Principal Site Stockholders to
perform or comply with any covenant contained herein or (C) any failure of a
Stockholder of Site to enter into this Agreement as a Principal Site
Stockholder or an other Site Stockholder; provided (i) notice of such Loss or
Losses is given to the Principal Site Stockholders within one year of the
date of this Agreement; (ii) the indemnification obligation of each Principal
Site Stockholder under this Section 6.1 shall be limited to the Fair Market
Value on the date of indemnification of the DeltaPoint Common Stock held by
such Site Stockholder plus the net cash proceeds of any shares of DeltaPoint
Common Stock that were sold by such Principal Site Stockholder on or prior to
the date of indemnification plus any cash payments payable to such Site
Principal Stockholder hereunder received or accrued to the date of
indemnification; and (iii) Site Stockholder shall have no obligations under
this Section 6.1 until the aggregate Losses exceed $25,000, at which time
Site Stockholder shall provide indemnification for all Losses subject to the
other limitations set forth above. Any Principal Site Stockholder may
satisfy its indemnification obligation under this Section 6.1 in whole or
part by delivering to DeltaPoint, Site or their affiliates, as applicable,
shares of DeltaPoint Common Stock and shall
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be credited with respect to such obligation based upon the average daily
closing price per share of DeltaPoint Common Stock for the five (5)
consecutive trading days which precede the date of indemnification ("Fair
Market Value"). As defined above, "LOSS" and "LOSSES" shall exclude the
amount of any tax benefit actually received by the indemnified party as a
result of such Losses, after taking into account the tax consequences of any
related indemnification payment made under this Article VI in relation to
such Losses. If such benefits have not yet been actually received at the
time for the payment of indemnification hereunder, then the related Losses
shall not exclude such benefit, but such benefit, when received, shall be
refunded to the indemnifying party. Other than as set forth in this Section
6.1, no Principal Site Stockholder shall have any liability or obligation for
any Losses to DeltaPoint, Site or their affiliates.
VI.2 DELTAPOINT'S KNOWLEDGE OF BREACHES. DeltaPoint shall not be
barred from receiving indemnification under this Article VI because it had
knowledge, prior to the date of this Agreement or at any other time, of a
breach of representation, warranty or covenant of Site or a Site Stockholder.
VI.3 MATERIALITY. For the purposes of determining the amount of Losses
under this Article VI, all representations and warranties of Site or a Site
Stockholder contained herein or in any instrument, document or agreement
contemplated hereby shall be deemed to be without any materiality or material
adverse effect exceptions or qualifications or any similar exceptions or
qualifications that may be present in such representations and warranties.
VI.4 NO RIGHT OF CONTRIBUTION. The Principal Site Stockholders shall
have no right of contribution against Site for any Losses.
VI.5 THIRD-PARTY CLAIMS. In the event DeltaPoint becomes aware of a
third-party claim which DeltaPoint believes may result in Losses, DeltaPoint
shall notify the Principal Site Stockholders of such claim, and the Principal
Site Stockholders shall be entitled, at their expense, to participate in any
defense of such claim. DeltaPoint shall have the right in its sole
discretion, using reasonable business judgment, to settle any such claim;
provided, however, that except with the consent of the Principal Site
Stockholders, the amount of the settlement of any such claim with third-party
claimants shall not be determinative of the amount of any claim under this
Article VI. In the event that the Principal Site Stockholders have consented
to any such settlement, the Principal Site Stockholders shall have no power
or authority to object under any provision of this Agreement to the amount of
any claim by DeltaPoint under this Article VI with respect to such settlement
to the extent that such amount is consistent with the terms of such
settlement.
VI.6 INDEMNIFICATION OF PRINCIPAL SITE STOCKHOLDERS. DeltaPoint
agrees to indemnify and hold harmless the Principal Site Stockholders and the
Other Site Stockholders for any Losses incurred by them directly or
indirectly as a result of (A) any inaccuracy or breach of a representation or
warranty of DeltaPoint contained herein or in any instrument, document or
agreement contemplated hereby or (B) any failure by DeltaPoint to perform or
comply with any covenant contained herein; provided (i) notice of such Loss
or Losses is given to the Principal Site Stockholders within one year of the
date of this Agreement; (ii) that the indemnification obligation of
DeltaPoint under this Section 6.6 shall be limited to the (x) total cash
consideration payable, but not yet paid, to the Principal Site Stockholders
and the Other Site Stockholders pursuant to this Agreement and (y) the number
of the shares of DeltaPoint Common Stock to which the Principal Site
Stockholders and the Other Site Stockholders are entitled to pursuant Section
1.1 hereof multiplied by $1.49271 and (iii) that DeltaPoint shall have no
indemnification obligations under this Section 6.6 until the aggregate Losses
exceed $25,000, at which time DeltaPoint shall indemnify for all Losses
subject only to the limitation imposed by provisions (i) and (ii) above.
Other than as set forth in this Section 6.6, DeltaPoint shall have no
liability or obligation for any Losses to the Principal Site Shareholders
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or the Other Site Shareholders.
VI.7 SITE STOCKHOLDER REPRESENTATIVE. Steven Fingerhood (the "SITE
SHAREHOLDER REPRESENTATIVE") is hereby irrevocably appointed as agent of the
Site Shareholders to make all determinations and decisions under or relating
to this Article VI that would otherwise be made by the Site Shareholders on
their own behalf. The Site Shareholder Representative shall have full
authority to take all actions on behalf of the Site Shareholders with respect
to any indemnification claims by or against them pursuant to this Article VI
including, but not limited to, any actions relating to settlement discussion,
negotiations or agreements. The foregoing shall be deemed a full and
irrevocable power of attorney coupled with an interest.
ARTICLE VII
GENERAL PROVISIONS
VII.1 AMENDMENT; WAIVER. This Agreement may be amended by the
parties hereto at any time by execution of an instrument in writing signed on
behalf of each of the parties hereto. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
VII.2 INTERPRETATION. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by
the words "without limitation." The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
VII.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
VII.4 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, the Schedules
and Exhibits hereto, and the documents and instruments and other agreements
among the parties hereto referenced herein: (a) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof; (b) are not
intended to confer upon any other person any rights or remedies hereunder;
and (c) shall not be assigned by operation of law or otherwise except as
otherwise specifically provided, except that DeltaPoint and Site may assign
their respective rights and delegate their respective obligations hereunder
to their respective affiliates.
VII.5 SEVERABILITY. In the event that any provision of this
Agreement or the application thereof becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect, and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with
a valid and enforceable provision that will achieve, to the extent possible,
the economic, business and other purposes of such void or unenforceable
provision.
VII.6 OTHER REMEDIES. Except as otherwise provided herein, any and
all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred
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hereby, or by law or equity upon such party, and the exercise by a party of
any one remedy will not preclude the exercise of any other remedy.
VII.7 GOVERNING LAW; FORUM. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof. Each of the parties hereto agrees that process
may be served upon them in any manner authorized by the laws of the State of
California for such persons and waives and covenants not to assert or plead
any objection which they might otherwise have to such jurisdiction and such
process. The parties expressly stipulate that any litigation under this
Agreement shall be brought in the state courts of the County of Santa Clara,
California and in the United States District Court for the Northern District
of California. The parties agree to submit to the jurisdiction and venue of
those courts.
VII.8 RULES OF CONSTRUCTION. The parties hereto agree that they
have been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
VII.9 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
VII.10 FURTHER ASSURANCES. If, at any time after the Acquisition,
any such further action is necessary or desirable to carry out the purposes
of this Agreement, the parties hereto will take all such lawful and necessary
action.
VII.11 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO EXPRESSLY
WAIVES ANY RIGHT TO A TRIAL BY A JURY IN ANY ACTION OR PROCEEDING RELATED TO
OR TO ENFORCE OR DEFEND ANY RIGHT, POWER OR REMEDY UNDER, IN RESPECT OF,
RELATED TO OR CONTEMPLATED BY THIS AGREEMENT OR ANY AMENDMENT, SUPPLEMENT,
AGREEMENT, INSTRUMENT OR DOCUMENT DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION SHALL BE
RESOLVED BEFORE A COURT AND NOT A JURY.
VII.12 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any person or entity other than the parties
hereto and their respective successors and permitted assigns, other than as
set forth in Article VI hereof.
VII.13 NOTICES. Any and all notices permitted or required to be
given under this Agreement must be in writing. Notices will be deemed given
(i) when personally received or when sent by facsimile transmission (to the
receiving party's facsimile number), (ii) on the first business day after
having been sent by commercial overnight courier with written verification of
receipt, or (iii) on the third business day after having been sent by
registered or certified mail from a location on the United States mainland,
return receipt requested, postage prepaid, whichever occurs first, at the
address set forth below or at any new address, notice of which will have been
given in accordance with this Section:
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If to DeltaPoint: DeltaPoint, Inc.
22 Lower Ragsdale Drive
Monterey, CA 93940
Attn: Jeffrey F. Ait
With a copy to: Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attn: Jeffrey D. Saper, Esq.
If to a Site Stockholder, at such Site Stockholder's address set forth on the
signature page of this Agreement beneath such Site Stockholder's name or at
such other address provided to DeltaPoint by such Site Stockholder.
VII.14 INDEPENDENT COUNSEL.
(a) The Site Shareholders have had the opportunity to be
represented by counsel of their choosing in the negotiation and execution of
this Agreement and have not relied upon counsel for Site, General Counsel
Associates LLP and Dorsey & Whitney, or counsel for DeltaPoint, Wilson
Sonsini Goodrich & Rosati, P.C., with respect to any matter relating hereto.
(b) Site has been represented by General Counsel Associates LLP
and Dorsey & Whitney in the negotiation and execution of this Agreement and
has not relied on any other legal counsel with respect to any matter relating
thereto. DeltaPoint has been represented by Wilson Sonsini Goodrich & Rosati,
P.C., in the negotiation and execution of this Agreement and has not relied
on any other legal counsel with respect to any matter relating thereto.
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<PAGE>
IN WITNESS WHEREOF, DeltaPoint, Site and Principal Site Stockholders
have caused this Agreement to be signed (by their duly authorized respective
officers, as applicable), all as of the date first written above.
DELTAPOINT, INC.: SITE/TECHNOLOGIES/INC.:
By /s/ Jeffrey F. Ait By /s/ Ron Sauers
--------------------------------- ------------------------------------
Name: Jeffrey F. Ait Name: Ron Sauers
------------------------------ ---------------------------------
Title: Chief Executive Officer Title: President
----------------------------- --------------------------------
For the purposes of Articles I, VI and VII of the Agreement only:
PRINCIPAL SITE STOCKHOLDERS:
SLF Partners II, L.P.:
By: /s/
--------------------------------
Name:
-------------------------
Title:
------------------------
Address:
----------------------
SLF Partners III, L.P.:
By: /s/
--------------------------------
Name:
-------------------------
Title:
------------------------
Address:
----------------------
JG Partnership Ltd.:
By: /s/
--------------------------------
Name:
-------------------------
Title:
------------------------
Address:
----------------------
Chrysalis Ventures Limited Partnership:
By: /s/
--------------------------------
Name:
-------------------------
Title:
------------------------
Address:
----------------------
Windcrest Partners:
By: /s/
--------------------------------
Name:
-------------------------
Title:
------------------------
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Address:
----------------------
For the purposes of Articles I and VII of the Agreement only:
OTHER SITE STOCKHOLDERS:
/s/
Matthew Adler
Address:
---------------------------
---------------------------
/s/
Benjamin B. Brodey, M.D.
Address:
---------------------------
---------------------------
/s/
Darrell J. Cannon
Address:
---------------------------
---------------------------
/s/
Sallie Van Dyke DeGolia
Address:
---------------------------
---------------------------
/s/
Richard DeGolia
Address:
---------------------------
---------------------------
/s/
Daniel Egger
Address:
---------------------------
---------------------------
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/s/
Gordon Link
Address:
---------------------------
---------------------------
/s/
Todd Schafer
Address:
---------------------------
---------------------------
WS Investment Company
By: /s/
--------------------------------
Name:
-------------------------
Title (if applicable:)
--------
Address:
----------------------
----------------------
/s/
Stephen F. Mendel
Address:
---------------------------
---------------------------
/s/
Ron Sauers
Address:
---------------------------
---------------------------
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made as of July
11, 1997, by and among DeltaPoint, Inc., a California corporation (the
"COMPANY") and the persons and entities listed on the signature page hereto
under the caption Shareholders (the "SHAREHOLDERS").
R E C I T A L S
A. Concurrent or after with the execution and delivery of this Agreement,
the Shareholders are receiving certain shares (the "SHARES") of the Company's
Common Stock pursuant to a Stock Exchange Agreement, dated the date hereof,
between the Company and certain of the Shareholders.
B. In connection with the receipt of such shares, the Shareholders
wish to obtain certain registration and other rights from the Company and the
Company wishes the Shareholders to be subject to certain market standoff
restrictions and other obligations.
NOW, THEREFORE, in reliance on the foregoing recitals, and in and for
the mutual covenants and consideration set forth herein, the parties hereto
agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the common stock of the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"HOLDER" shall mean any holder, or an assignee under Section 13
hereof, of outstanding Registrable Securities.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" shall refer
to a registration effected by preparing and filing a registration statement
in compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" shall mean the Shares and any shares of
Common Stock issued in respect of securities issued pursuant to the
conversion of the Shares upon any stock split, stock dividend,
recapitalization, substitution, or similar event; provided, however, that
Registrable Securities shall not include any (a) shares of Common Stock which
have previously been registered,
<PAGE>
(b) shares of Common Stock which have previously been sold to the public, or
(c) securities which would otherwise be Registrable Securities held by a
Holder who is then permitted to sell all of such securities within any three
(3) month period following the Company's initial public offering pursuant to
Rule 144 if such securities then held by such Holder constitute less than one
percent of the Company's outstanding equity securities.
"REGISTRATION EXPENSES" shall mean all expenses (excluding
underwriting discounts and selling commissions) incurred in connection with a
registration under Sections 5 and 6 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements
of counsel for the Company, blue sky fees and expenses, and the expense of
any special audits incident to or required by any such registration.
"RESTRICTED SECURITIES" shall mean the securities of the Company
required to bear or bearing the legend set forth in Section 3 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities.
"SHARES" shall mean shares of the Company's Common Stock received
by the Shareholders pursuant to the terms of the Stock Exchange Agreement,
dated as of the date hereof, by and between the Company and certain of the
Shareholders.
2. RESTRICTIONS ON TRANSFERABILITY. The Restricted Securities held by
the Shareholders shall not be transferred except upon the conditions
specified in this Agreement, which conditions are intended to insure
compliance with the provisions of the Securities Act or, in the case of
Section 14 hereof, to assist in an orderly distribution. Each Shareholder
will cause any proposed transferee of Restricted Securities held by that
Shareholder to agree to take and hold those securities subject to the
provisions and upon the conditions specified in this Agreement.
3. RESTRICTIVE LEGEND. Each certificate representing (i) the Shares
and (ii) any securities issued in respect of the Shares upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event,
shall (unless otherwise permitted or unless the securities evidenced by such
certificate shall have been registered under the Securities Act) be stamped
or otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, (THE "ACT") OR ANY STATE SECURITIES LAWS. SUCH
SHARES MAY NOT BE SOLD OR
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<PAGE>
OFFERED FOR SALE IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT. COPIES OF THE AGREEMENT
COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT
THE PRINCIPAL EXECUTIVE OFFICE OF THE CORPORATION.
Upon request of a holder of such a certificate, the Company shall
remove the foregoing legend from the certificate or issue to such holder a
new certificate therefor free of any transfer legend, if, with such request,
the Company shall have received either the opinion referred to in Section
4(i) or the "no-action" letter referred to in Section 4(ii) to the effect
that any transfer by such holder of the securities evidenced by such
certificate will not violate the Securities Act and applicable state
securities laws, unless any such transfer legend may be removed pursuant to
Rule 144(k), in which case no such opinion or "no-action" letter shall be
required.
4. NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in
all respects with the provisions of this Section 4. Prior to any proposed
transfer of any Restricted Securities (other than under circumstances
described in Section 5 hereof), the holder thereof shall give written notice
to the Company of such holder's intention to effect such transfer. Each such
notice shall describe the manner and circumstances of the proposed transfer
in sufficient detail, and shall be accompanied (except in transactions in
compliance with Rule 144 promulgated under the Securities Act or for a
transfer to a holder's spouse, ancestors, descendants or a trust for any of
their benefit, or in transactions involving the distribution without
consideration of Restricted Securities by a holder to any of its partners or
retired partners or to the estate of any of its partners or retired partners)
by either (i) a written opinion of legal counsel to the holder who shall be
reasonably satisfactory to the Company, addressed to the Company and
reasonably satisfactory in form and substance to the Company's counsel, to
the effect that the proposed transfer of the Restricted Securities may be
effected without registration under the Securities Act or (ii) a "no-action"
letter from the Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the
staff of the Commission that action be taken with respect thereto, whereupon
the holder of such Restricted Securities shall be entitled to transfer such
Restricted Securities in accordance with the terms of the notice delivered by
such holder to the Company. Each certificate evidencing the Restricted
Securities transferred as above provided shall bear the restrictive legend
set forth in Section 3 above, except that such certificate shall not bear
such restrictive legend if the opinion of counsel or "no-action" letter
referred to above expressly indicates that such legend is not required in
order to establish compliance with the Act or if such legend is no longer
required pursuant to Rule 144(k).
5. REGISTRATION.
(a) REGISTRATION AFTER NINE MONTHS. Prior to the date occurring
nine months after
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the date hereof, but subject to the conditions set forth below in Section
5(c) below, the Company shall use its best efforts to effect registration
(including, without limitation, the execution of an undertaking to file post
effective amendments, appropriate qualification under applicable blue sky or
other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or facilitate
the sale and distribution of all or such portion of such Registrable
Securities that are released from the market standoff restrictions set forth
in Section 14(b)(i) hereof on the date occurring nine months after the date
hereof.
(b) REGISTRATION AFTER TWELVE MONTHS. Prior to the date occurring
twelve months after the date hereof, but subject to the conditions set forth
below in Section 5(c) below, the Company shall use its best efforts to effect
registration (including, without limitation, the execution of an undertaking
to file post effective amendments, appropriate qualification under applicable
blue sky or other state securities laws and appropriate compliance with
applicable regulations issued under the Securities Act) as would permit or
facilitate the sale and distribution of all or such portion of such
Registrable Securities that are released from the market standoff
restrictions set forth in Section 14(b)(ii) hereof on the date occurring
twelve months after the date hereof.
(c) LIMITATIONS ON REGISTRATION OBLIGATION.
(i) The Company shall not be obligated to effect, or to take
any action to effect, any such registration pursuant to this
Section 5:
(A) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act; or
(B) After the Company has effected two (2) such
registrations pursuant to this Section 5 and such registrations have
been declared or ordered effective and the sales of such Registrable
Securities have closed.
(ii) If the Company shall furnish to the Holders a certificate
signed by the President of the Company stating that in the good faith
judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such
registration statement to be filed on or before the time filing would
be required and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer
such filing (but not more than twice) for a period of not more than
sixty (60) days after the date by which such registration would
otherwise be required.
The registration statement filed pursuant to the request of the
Holders, may, subject to the provisions of Section 5(d) below, include other
securities of the Company which are held by officers or directors of the
Company or which are held by persons who, by virtue of agreements with
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the Company, are entitled to include their securities in any such
registration, but the Company shall have no right to include any of its
securities in any such registration except as provided in Section 5(d) below.
(d) UNDERWRITING. If Holders holding at least 60% of the Shares
intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company at least three
months prior to the date that registration is to be effected pursuant to
Section 5(a) or 5(b), without regard to the effect of Section 5(c). The
right of any Holder to registration pursuant to Section 5 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's eligible Registrable Securities in the
underwriting to the extent provided herein. A Holder may elect to include in
such underwriting all or a part of the Registrable Securities he holds that
are eligible for such registration.
If officers or directors of the Company shall request inclusion of
securities of the Company other than Registrable Securities in any
registration pursuant to Section 5, or if holders of securities of the
Company who are entitled by contract with the Company to have securities
included in such a registration (such officers, directors, and other
shareholders being collectively referred to as the "OTHER SHAREHOLDERS")
request such inclusion, the Holders shall, offer to include the securities of
such Other Shareholders in the underwriting and may condition such offer on
their acceptance of the further applicable provisions of this Agreement. The
Company shall (together with all Holders and Other Shareholders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters (the "UNDERWRITER") selected for such
underwriting by sixty percent (60%) of the Holders and reasonably acceptable
to the Company. Notwithstanding any other provision of this Section 5, if
the Underwriter determines that marketing factors require a limitation on the
number of shares to be underwritten and so advises the Holders and the
Company in writing, then the number of shares of Registrable Securities that
may be included in the registration and underwriting shall be allocated among
all such Holders in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities owned by such Holders at the time of filing
such registration statement and eligible for inclusion in registration and no
shares of Other Shareholders shall be included in such registration. No
Registrable Securities excluded from the underwriting by reason of the
Underwriter's marketing limitation shall be included in such registration.
If any Holder or Other Shareholder disapproves of the terms of any such
underwriting, such holder may elect to withdraw therefrom by written notice
to the Company and the Underwriter. Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
If the Underwriter has not limited the number of Registrable Securities or
other securities to be underwritten, the Company may include its securities
for its own account in such registration if the underwriter so agrees and if
the number of Registrable Securities and other securities which would
otherwise have been included in such registration and underwriting will not
thereby be limited.
6. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Company, and all Selling Expenses shall be borne
by the holders of the securities so registered pro rata on the
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basis of the number of their shares so registered; provided, however, that
the Company shall not be required to pay any Registration Expenses if, as a
result of the withdrawal of a request for registration by Holders, the
registration statement does not become effective, unless such withdrawal is
caused by a material adverse change in the business or operations of the
Company after such request for registration, or unless the Holders agree to
have such registration considered a registration pursuant to Section
5(c)(i)(B). If the Company is not required to pay any Registration Expenses,
then the Holders and Other Shareholders requesting registration shall bear
such Registration Expenses pro rata on the basis of the number of their
shares so included in the registration request, and such registration shall
not be considered a registration for purposes of Section 5(c)(i)(B).
7. REGISTRATION PROCEDURES. In the case of each registration effected
by the Company pursuant to this Agreement, the Company will keep each Holder
advised in writing as to the initiation of such registration and as to the
completion thereof. At its expense, the Company will:
(a) Keep such registration effective for a period of one-hundred
and eighty (180) days or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto,
whichever first occurs; and
(b) Furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request; and
(c) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 5 hereof, the Company will
enter into any underwriting agreement reasonably necessary to effect the
offer and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions, and provided further that if the
underwriter so requests the underwriting agreement will contain customary
indemnification and contribution provisions, and provided further that the
Underwriter is reasonably acceptable to the Company.
Notwithstanding the foregoing, the Company shall have the right to
suspend sales of Registrable Securities by Holders who propose to sell such
Registrable Securities pursuant to Section 5 hereof in the event that the
Company determines, in its good faith judgment, that there exists material
information regarding the Company that has not been disclosed to the public
and which is not disclosed (or incorporated by reference) in the registration
statement covering such Registrable Securities (the "UNDISCLOSED MATERIAL
INFORMATION"). In furtherance of the foregoing, prior to making any such
sale, any such Holder shall furnish to the Company a written notice stating
that it intends to make a sale. Within two (2) days of receipt of such
notice, the Company shall provide written notice to the Holders proposing to
sell Registrable Securities as to whether the Company shall suspend such sale
due to the existence of Undisclosed Material Information. The Holders shall
suspend any further sale of Registrable Securities pursuant to the
registration statement until the Company advises such Holders that the
registration statement has been amended. In such event, the Company shall
cause the registration statement to be amended as soon as reasonably
practicable, provided that the Company shall not be required to amend the
registration statement during any time
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when the Company's officers and directors are prohibited from buying or
selling the Common Stock pursuant to the Company's insider trading policy.
Notwithstanding the foregoing sentence, the Company shall file any amendment
necessary for the Holders to recommence their sales under the registration
statement concurrently with the commencement of any period in which directors
and officers of the Company are allowed to buy or sell Common Stock pursuant
to the Company's insider trading policy. For such time period that the
Holders are not permitted to sell Registrable Securities registered under a
registration statement as a result of the application of the provisions of
this paragraph, such registration statement shall not be considered effective
during such time period for the purpose of any provision of this Agreement
that relates to the time period for which such registration statement shall
remain effective.
8. INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, and each person controlling such Holder, if
Registrable Securities held by such Holder are included in the securities
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by
the Company of the Securities Act including any rule or regulation thereunder
applicable to the Company relating to action or inaction required of the
Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating
and defending any such claim, loss, damage, liability or action, provided
that the Company will not be liable in any such case to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement (or alleged untrue statement) or omission (or alleged
omission) based upon written information furnished to the Company by such
Holder or underwriter and stated to be specifically for use therein.
(b) Each Holder and Other Shareholder will, if Registrable
Securities or other securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors, officers and
agents and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other such Holder and Other Shareholder and each
of their officers, directors and partners, and each person controlling such
Holder or Other Shareholder, against all claims, losses, damages and
liabilities (or actions in respect thereof)
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arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any such registration statement, prospectus,
offering circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading, and will reimburse the Company and such Holders, Other
Shareholders, directors, officers, agents, partners, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating of defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder or Other Shareholder and
stated to be specifically for use therein; provided, however, that the
obligations of such Holders and Other Shareholders hereunder shall be limited
to an amount equal to the proceeds to each such Holder or Other Shareholder
of securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 8
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Agreement. No Indemnifying Party in the defense of any such claim or
litigation shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
9. INFORMATION BY HOLDER. Each Holder and each Other Shareholder
holding securities included in any registration shall furnish to the Company
such information regarding such Holder or Other Shareholder as the Company
may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Agreement.
10. LIMITATIONS ON REGISTRATION OF ISSUES OF SECURITIES. From and
after the date of this Agreement, the Company shall not enter into any
agreement with any holder or prospective holder of any securities of the
Company giving such holder or prospective holder the right to require the
Company to initiate any registration of any securities of the Company in
conflict with the rights granted to the Shareholders hereunder. Any right
given by the Company to any holder or
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prospective holder of the Company's securities in connection with the
registration of securities shall be conditioned such that it shall be
consistent with the provisions of this Agreement and with the rights of the
Holders provided in this Agreement.
11. RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission which may permit the sale
of the Restricted Securities to the public without registration, the Company
agrees to:
(a) Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
from and after the date occurring nine months after the date hereof;
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become subject
to such reporting requirements;
(c) So long as a Shareholder owns any Restricted Securities,
furnish to the Shareholder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at
any time from and after the date occurring nine months after the date
hereof), and of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed as a Shareholder may reasonably request in availing itself
of any rule or regulation of the Commission allowing a Shareholder to sell
any such securities without registration.
12. NO-ACTION LETTER OR OPINION OF COUNSEL IN LIEU OF REGISTRATION.
Notwithstanding anything in this Agreement to the contrary, if the Company
shall have obtained from the Commission a "no-action" letter in which the
Commission has indicated that it will take no action if, without registration
under the Securities Act, any Holder disposes of Registrable Securities
covered by any request for registration made under this Agreement in the
manner in which such Holder proposes to dispose of the Registrable Securities
included in such request, or if in the opinion of counsel for the Company
concurred in by counsel for such Holder no registration under the Securities
Act is required in connection with such disposition, the Registrable
Securities included in such request shall not be eligible for registration
under this Agreement; provided, however, with respect to any Holder who may
deemed to be an "affiliate," as that term is defined under Rule 144, if,
notwithstanding the opinion of such counsel, the Holder is unable to dispose
of all of the Registrable Securities included in his request in the manner in
which such Holder so proposes without registration, the Registrable
Securities included in such request shall be eligible for registration under
this Agreement.
13. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Shareholder's securities granted to Shareholder by
the Company under Section 5 hereof may be transferred or assigned by
Shareholder to any of the following persons ("Permitted Transferees"): (i)
any partner, former partner or affiliate of such Shareholder or (ii) a
transferee or assignee holding
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at least 10,000 shares of Restricted Securities, provided that the Company is
given written notice by Shareholder at the time of said transfer or
assignment, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and provided further that the transferee or
assignee of such rights is not deemed by the Board of Directors of the
Company, in its reasonable judgment, to be a competitor of the Company; and
provided further that the transferee or assignee of such rights assumes the
obligations of a Shareholder under this Agreement.
14. "MARKET STAND-OFF" AGREEMENTS.
(a) Each Shareholder agrees, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, not to sell
or otherwise transfer or dispose of any Common Stock (or other securities) of
the Company held by Shareholder (except to Permitted Transferees who have
agreed in writing to be bound by this Agreement as if they were Shareholders)
during a period of time determined by the Company and its underwriters (not
to exceed 180 days) following the effective date of a registration statement
of the Company filed under the Securities Act, provided that all officers and
directors of the Company who then hold Common Stock (or other securities) of
the Company enter into similar agreements and provided that the Company uses
reasonable efforts to obtain a similar covenant from all holders of at least
1% of the Company's outstanding securities. If any officer or director is
released from his obligations under such agreements prior to the end of the
lock-up period, each Shareholder shall similarly be released. Such agreement
shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop-transfer instructions with respect
to the Shares (or securities) subject to the foregoing restriction until the
end of said period.
(b)
(i) Each Shareholder agrees not to sell or otherwise transfer
or dispose of more than 50% of the Shares initially held by
Shareholder (or any securities issued in respect thereof) until the
date occurring nine months after the date hereof.
(ii) Each Shareholder agrees not to sell or otherwise transfer
or dispose of the remainder of the Shares initially held by
Shareholder (or any securities issued in respect thereof) until the
date occurring twelve months after the date hereof.
(iii) The Company may impose stop-transfer instructions
with respect to the Shares subject (or any securities issued in
respect thereof) to the foregoing restrictions until the end of
said respective periods.
(iv) The provisions of this Section 14(b) shall not be
applicable to transfers to Permitted Transferees who have agreed in
writing to be bound by this Agreement as if they were Shareholders.
15. GOVERNING LAW. This Agreement and the legal relations between the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California. The parties hereto agree to submit
to the jurisdiction of the federal and state courts of the State of
California with respect to the breach or interpretation of this Agreement or
the enforcement of any and all rights, duties, liabilities, obligations,
powers, and other relations between the parties
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arising under this Agreement.
16. ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties regarding rights to
registration. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.
17. NOTICES, ETC. Any and all notices permitted or required to be
given under this Agreement must be in writing. Notices will be deemed given
(i) when personally received or when sent by facsimile transmission (to the
receiving party's facsimile number), (ii) on the first business day after
having been sent by commercial overnight courier with written verification of
receipt, or (iii) on the third business day after having been sent by
registered or certified mail from a location on the United States mainland,
return receipt requested, postage prepaid, whichever occurs first, at the
address set forth below or at any new address, notice of which will have been
given in accordance with this Section:
If to DeltaPoint: DeltaPoint, Inc.
22 Lower Ragsdale Drive
Monterey, CA 93940
Attn: Jeffrey F. Ait
With a copy to: Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Attn: Jeffrey D. Saper, Esq.
If to a Shareholder or any Shareholder's assignee or transferee meeting the
requirements of Section 13, at such Shareholder's address set forth on the
signature page of this Agreement or at such other address provided to
DeltaPoint by such Shareholder or any such assignee or transferee.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
19. AMENDMENTS. Any provision of this Agreement may be amended, waived
or modified upon the written consent of the Company and the Shareholders (or
their assignees to whom Shareholders have expressly assigned their rights in
compliance with Section 13 hereof) who then hold at least fifty percent (50%)
of the Registrable Securities then held by persons entitled to registration
rights hereunder provided further, any such amendment, waiver or modification
applies by its terms to each applicable Shareholder and each such assignee
and, provided further, that a Shareholder or such assignee hereunder may
waive any of such Holder's rights or the Company's obligations hereunder
without obtaining the consent of any other Shareholder or assignee.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
DELTAPOINT, INC.
By: /s/ JEFFREY F. AIT
----------------------------------
Name: Jeffrey F. Ait
Title: Chief Executive Officer
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SHAREHOLDER
(Print Name of Shareholder)
/s/
(Signature of Shareholder or Authorized Signatory)
(Print Name and Title of Authorized Signatory)
Address: ______________________________________
______________________________________
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