AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is entered into on May 11, 2000, by and among
RAMTRON INTERNATIONAL CORPORATION, a Delaware corporation ("Ramtron"), RIC MI
ACQUISITION INC., a Colorado corporation and wholly owned subsidiary of Ramtron
("Ramtron Sub"), MUSHKIN INC., a Colorado corporation ("Mushkin"), and WILLIAM
MICHAEL MUSHKIN and ELIZABETH LORING CRANE, each an individual resident of
Denver, Colorado (each a Shareholder and collectively, the "Shareholders").
Ramtron, Ramtron Sub, Mushkin and the Shareholders are referred to collectively
herein as the "Parties."
RECITALS
The Shareholders own all of the outstanding capital stock of Mushkin,
consisting solely of common stock.
Upon the terms and subject to the conditions of this Agreement and in
accordance with the Colorado Business Corporation Act, as amended (the
"Colorado Act"), Ramtron, Ramtron Sub and Mushkin intend to enter into a
business combination transaction.
The Board of Directors of Mushkin and the Shareholders (i) have determined that
the Merger (as defined in Section 2(a)) is consistent with and in furtherance
of the long-term business strategy of Mushkin and advisable and fair to, and in
the best interests of, Mushkin and its stockholders, and (ii) have approved
this Agreement, the Merger and the other transactions contemplated by this
Agreement.
The Board of Directors of Ramtron (i) has determined that the Merger is
consistent with and in furtherance of the long-term business strategy of
Ramtron and advisable and fair to, and in the best interests of, Ramtron and
its shareholders and (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement.
For federal income tax purposes, it is intended that the Merger shall qualify
as tax-free events under either or both of Section 351 and Section 368 of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code").
Ramtron, Mushkin and the Shareholders wish to make and receive the benefit of
certain representations, warranties and agreements in connection with the
consummation of the transactions contemplated hereunder and to prescribe
various conditions to such transactions.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants herein contained, the
Parties agree as follows.
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1. Definitions.
Definitions shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All references herein to
Articles, Sections, Exhibits, Annexes and Schedules shall be deemed to be
references to Articles and Sections of, and Exhibits, Annexes and Schedules to,
this Agreement unless the context shall otherwise require. All Exhibits,
Annexes and Schedules attached hereto shall be deemed incorporated herein as if
set forth in full herein and, unless otherwise defined therein, all terms used
in any Exhibit, Annex or Schedule shall have the meaning ascribed to such term
in this Agreement. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise expressly provided herein, any
agreement, plan, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement, plan,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
For the purposes of this Agreement, the following terms have the following
meanings:
"33 Act Legend" means the following language placed on a stock certificate:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ESCROWED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT OR, IN THE OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE
OR TRANSFER, PLEDGE OR HYPOTHECATION DOES NOT VIOLATE THE PROVISIONS OF
SUCH ACT.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504.
"Applicable Rate" means the prime rate of interest announced from time to time
by Chase Manhattan Bank.
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"Articles of Merger" means the Articles of Merger in the form of Exhibit A
attached hereto.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"Closing" has the meaning set forth in Section 2(c) below.
"Closing Date" has the meaning set forth in Section 2(c) below.
"Code" has the meaning set forth in the recital above.
"Colorado Act" has the meaning set forth in the recitals above.
"Confidential Information" means any information concerning the businesses and
affairs of Mushkin that is not already generally available to the public, as
described by the Confidentiality and Non-disclosure Agreement entered into by
Mushkin and Ramtron's subsidiary, Enhanced Memory Systems, effective
January 24, 2000.
"Due Diligence Materials" means the notebooks of materials delivered by Mushkin
to Ramtron originally on May 4, 2000, and supplemented by delivery of written
and electronic documentation thereafter through the Closing Date.
"Disclosure Schedule" has the meaning set forth in Section 4 below.
"Effective Time" means the time of filing of the Articles of Merger with the
Secretary of State in accordance with the relevant provisions of the Colorado
Act.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation or
retirement plan or arrangement which is an Employee Pension Benefit Plan,
(b) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
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"Environmental, Health, and Safety Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act of 1976, and the Occupational Safety and Health Act of 1970, each
as amended, together with all other laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges there
under) of federal, state, local, and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, public health
and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Escrow Agreement" means the Escrow Agreement substantially in the form
attached hereto as Exhibit B:
"Escrowed Shares" means any of the Ramtron Shares that are held subject to the
Escrow Agreement from time to time.
"Escrow Legend" means the legend to be placed on a stock certificate as set
forth in the Escrow Agreement.
"Extremely Hazardous Substance" has the meaning set forth in Section 302 of the
Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Financial Statement" has the meaning set forth in Section 4(g) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Indemnified Party" has the meaning set forth in Section 8(d) below.
"Indemnifying Party" has the meaning set forth in Section 8(d) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
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therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all
trade secrets and confidential business information (including ideas, research
and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (f) all computer software
(including data and related documentation), (g) all Internet domain names,
(h) all other proprietary rights, and (i) all copies and tangible embodiments
thereof (in whatever form or medium).
"Knowledge" means actual knowledge of a person.
"Lock-Up Agreement" means the Lock-Up Agreement substantially in the form
attached hereto as Exhibit C.
"Lock-Up Legend" means the legend to be placed on a stock certificate as set
forth in the Lock-Up Agreement.
"Lock-Up Shares" means the number of shares subject to the restrictions in the
Lock-Up Agreement, subject to releases therefrom as applicable.
"Liability" means any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due),
including any liability for Taxes.
"Merger" has the meaning set forth in Section 2(a) below.
"Most Recent Balance Sheet" means the balance sheet contained within the Most
Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in Section 4(g)
below.
"Most Recent Fiscal Month End" has the meaning set forth in Section 4(g) below.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"Mushkin" has the meaning set forth in the recitals above.
"Mushkin Common Stock" means the common stock, no par value per share, of
Mushkin.
"Ordinary Course of Business" means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
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"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Distribution" has the meaning set forth in Section 6(j).
"Person" means an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).
"Prohibited Transaction" has the meaning set forth in ERISA Section 406 and
Code Section 4975.
"Ramtron" has the meaning set forth in the recitals above.
"Ramtron Average Price" means the average of all of the last sale prices of
Ramtron Common Stock as reported on The NASDAQ SmallCap Market for the five
trading days immediately prior to the Closing Date.
"Ramtron Common Stock" means the common stock, $0.01 par value per share, of
Ramtron.
"Ramtron Shares" has the meaning set forth in Section 2(b) below.
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Restricted Shares" has the meaning set forth in Section 6(g).
"Secretary of State" means the Secretary of State of the State of Colorado.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge, or
other security interest, other than (a) mechanic's, materialmen's, and similar
liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings,
(c) purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business
and not incurred in connection with the borrowing of money.
"Shareholders" has the meaning set forth in the preface above.
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of
the directors.
"Surviving Corporation" has the meaning set forth in Section 2(a) below.
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"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8(d) below.
"Unrestricted Shares" has the meaning set forth in Section 6(g).
2. The Merger.
(a) Basic Transaction. At the Effective Time and subject to and upon the
terms and conditions of this Agreement and the applicable provisions
of Colorado Law, Ramtron Sub shall be merged with and into Mushkin
(the "Merger"), the separate corporate existence of Ramtron Sub shall
cease and Mushkin shall continue as the surviving corporation. Mushkin
as the surviving corporation after the Merger is hereinafter sometimes
referred to as the "Surviving Corporation."
(b) Conversion of Shares of Mushkin Common Stock. Each share of Mushkin
Common Stock issued and outstanding immediately prior to the Effective
Time (other than any shares of Mushkin Common Stock that are owned by
Mushkin or any Subsidiary of Mushkin) shall be converted into the
right to receive 467.343 shares of Ramtron Common Stock, being
cumulatively 952,380 shares (the "Ramtron Shares"). At the Effective
Time, all shares of Mushkin Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate that immediately
prior to the Effective Time represented outstanding shares of Mushkin
Common Stock (collectively, the "Mushkin Certificates") shall cease to
have any rights with respect thereto, except the right to receive the
certificates representing the Ramtron Shares to be issued in
consideration therefor upon surrender of such certificate in
accordance with Section 2(i), without interest. No fraction of a share
of Ramtron Common Stock will be issued by virtue of the Merger, but in
lieu thereof each holder of shares of Mushkin Common Stock who would
otherwise be entitled to a fraction of a share of Ramtron Common Stock
(after aggregating all fractional shares of Ramtron Common Stock that
otherwise would be received by such holder) shall receive from Ramtron
an amount of cash (rounded to the nearest whole cent) equal to the
product of (i) such fraction, multiplied by (ii) Ramtron Average
Price.
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(c) Shares of Ramtron Sub. At the Effective Time each share of common
stock, $0.01 par value per share, of Ramtron Sub issued and
outstanding immediately prior to the Effective Time shall be converted
into one validly issued, fully paid and nonassessable share of common
stock, $0.01 par value per share, of the Surviving Corporation. Each
certificate evidencing ownership of shares of the common stock of
Ramtron Sub shall evidence ownership of such shares of capital stock
of the Surviving Corporation.
(d) Effective Time; Closing. Subject to the provisions of this Agreement,
the parties hereto shall cause the Merger to be consummated by filing
Articles of Merger with the Secretary of State in accordance with the
relevant provisions of the Colorado Act as soon as practicable on or
after the Closing Date (as herein defined).
(e) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Ramtron
in Colorado Springs, Colorado, at 9:00 a.m. local time not later than
the second business day following the satisfaction or waiver by each
Party entitled to the benefit of such conditions of all conditions to
the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other
place, time and date as Ramtron and the Shareholders may mutually
determine (the "Closing Date") provided, however, that the Closing
Date shall be not later than June 9, 2000.
(f) Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions
of the Colorado Act. Without limiting the generality of the foregoing,
at the Effective Time all the property, rights, privileges, powers
immunities and franchises of Mushkin and Ramtron Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of
Mushkin and Ramtron Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
(g) Articles of Incorporation; Bylaws; Directors and Officers. At the
Effective Time, the Articles of Incorporation, Bylaws, directors and
officers of Ramtron Sub, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation, Bylaws,
directors and officers of the Surviving Corporation until thereafter
amended or changed as provided by applicable law; provided, however,
that at the Effective Time Article I of the Articles of Incorporation
of the Surviving Corporation shall be amended to read: "The name of
the corporation is Mushkin Inc."
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(h) Deliveries. At the Closing, (i) the Shareholders will deliver to
Ramtron the various certificates, instruments, and documents referred
to in Section 7(a) below, (ii) Ramtron will deliver to the
Shareholders the various certificates, instruments, and documents
referred to in Section 7(b) below, and (iii) the Shareholders will
deliver to Ramtron stock certificates representing Mushkin Common
Stock, endorsed in blank or accompanied by duly executed assignment
documents.
(i) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Ramtron and the Surviving Corporation shall instruct
Ramtron's transfer agent to deliver to each of the Shareholders
certificates representing the Ramtron Shares with the appropriate
legends as set forth in the chart below, together with any dividends
and other distributions with respect thereto and any cash in lieu of
fractional shares, as provided in Sections 2(b) and 2(k) hereof.
Until surrendered as contemplated by this Section 2(i), each
Certificate representing shares of Mushkin Inc. shall be deemed at any
time after the Effective Time to represent only the right to receive
upon such surrender of such certificate the certificates representing
the Ramtron Shares to which such holder is entitled and cash and other
dividends, distributions or payments as contemplated by this Section
2(i).
Shareholder Number of Shares Legends
======================= ============================ ======================
William Michael Mushkin 24.5% of the Ramtron Shares, a..33 Act Legend; and
being 233,333 of the Ramtron b. Lock-Up Legend
Shares
===============================================================================
Elizabeth Loring Crane 25.5% of the Ramtron Shares, a. 33 Act Legend; and
being 242,857of the Ramtron b. Lock-Up Legend
Shares
===============================================================================
William Michael Mushkin 19.6% of the Ramtron Shares, a. 33 Act Legend; and
being 186,666 of the Ramtron b. Lock-Up Legend
Shares
===============================================================================
Elizabeth Loring Crane 20.4% of the Ramtron Shares, a. 33 Act Legend; and
being 194,286 of the Ramtron b. Lock-Up Legend
Shares
===============================================================================
William Michael Mushkin 4.9% of the Ramtron Shares, a. 33 Act Legend,
being 46,667of the Ramtron b. Lock-Up Legend; and
Shares c. Escrow Legend
===============================================================================
Elizabeth Loring Crane 5.1% of the Ramtron Shares, a. 33 Act Legend
being 48,571 of the Ramtron b. Lock-Up Legend; and
Shares c. Escrow Legend
===============================================================================
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(j) Delivery of Ramtron Certificates. Ramtron shall cause its transfer
agent to deliver all certificates in Section 2(i) above by Federal
Express (signature required) no later than five business days after
the Closing Date to:
Elizabeth Loring Crane
Holland & Hart LLP
555 Seventeenth Street, Suite 3200
Denver, CO 80202-3979
Phone: (303) 295-8000
provided however that the Escrowed Shares shall be delivered by the
same manner of delivery and at substantially the same time to the
Escrow Agent to be held pursuant to the Escrow Agreement.
(k) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions or payments declared or made after the Effective
Time with respect to the Ramtron Shares, with a record date after the
Effective Time, and no cash payment in lieu of fractional shares shall
be paid to the holder of any unsurrendered Certificate representing
Mushkin Inc. shares represented thereby until the holder of record of
such Certificate has surrendered such Certificate for exchange as
herein provided.
(l) Tax Free Reorganization. It is intended by the parties hereto that the
Merger shall constitute a reorganization within the meaning of Section
368(a)(1)(A) of the Code. The parties hereto adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the regulations issued under the Code. The parties
believe that the value of the Ramtron Shares to be received in the
Merger is equal, in each instance, to the value of the Mushkin Common
Stock to be surrendered in exchange therefor. The Ramtron Shares
issued in the Merger will be issued solely in exchange for the Mushkin
Common Stock, and no transaction other than the Merger represents,
provides for, or is intended to be an adjustment to, the consideration
paid for the Mushkin Common Stock. Except for cash paid in lieu of
fractional shares, no consideration that could constitute "other
property" within the meaning of Section 356 of the Code is being paid
by Ramtron for the Mushkin Common Stock in the Merger. The total
amount of cash consideration paid to debt and equity security holders
of Mushkin (other than cash in lieu of fractional shares) will not
exceed $600,000. The parties shall not take a position on any tax
returns inconsistent with this Section 2(l).
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Shareholders. Each of the
Shareholders represents and warrants to Ramtron that the statements
contained in this Section 3(a) are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section
3(a)) with respect to himself or herself, except as set forth in
Section 4(p)(4) of the Disclosure Schedule.
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(i) Authorization of Transaction. Each of the Shareholders has full
power and authority to execute and deliver this Agreement and to
perform his or her obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the
Shareholders, enforceable in accordance with its terms and
conditions. The Shareholders need not give any notice to, make
any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement, and
the Shareholders shall duly approve the Plan of Merger pursuant
to the Colorado Act.
(ii) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or
court to which either of the Shareholders is subject or (B)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or
other arrangement to which either of the Shareholders is a party
or by which he or she is bound or to which any of his or her
assets is subject.
(iii) Brokers' Fees. Neither of the Shareholders has any Liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which Ramtron or Ramtron Sub could become liable or
obligated.
(iv) Investment. Each of the Shareholders (A) understands that the
Ramtron Shares have not been, and as of the Closing Date will not
be, registered under the Securities Act, or under any state
securities laws, and are being offered and sold in reliance upon
federal and state exemptions for transactions not involving any
public offering, (B) is acquiring the Ramtron Shares solely for
his or her own account for investment purposes, and not with a
view to the distribution thereof, (C) is a sophisticated investor
with knowledge and experience in business and financial matters,
(D) has received certain information concerning Ramtron and has
had the opportunity to obtain additional information as desired
in order to evaluate the merits and the risks inherent in holding
the Ramtron Shares, (E) is able to bear the economic risk and
lack of liquidity inherent in holding the Ramtron Shares.
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(v) Mushkin Shares. Each of the Shareholders holds of record and owns
beneficially the number of shares of Mushkin Common Stock set
forth in Section 4(b) of the Disclosure Schedule opposite his or
her name, free and clear of any restrictions on transfer (other
than any restrictions under the Securities Act and state
securities laws), Taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and
demands. Neither of the Shareholders is a party to any option,
warrant, purchase right, or other contract or commitment that
could require such Shareholder to sell, transfer, or otherwise
dispose of any capital stock of Mushkin (other than this
Agreement). Neither of the Shareholders is a party to any voting
trust, proxy, or other agreement or understanding with respect to
the voting of any capital stock of Mushkin.
(vi) S Corporation Status. Mushkin has been a validly electing S
corporation, within the meaning of Code Sections 1361 and 1362,
at all times during its existence and Mushkin will be an S
corporation up to and including the Effective Time.
(b) Representations and Warranties of Ramtron. Ramtron represents and
warrants to the Shareholders that the statements contained in this
Section 3(b) are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section 3(b)).
(i) Organization of Ramtron. Ramtron is a corporation duly organized,
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) Authorization of Transaction. Ramtron has full power and
authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally
binding obligation of Ramtron, enforceable in accordance with its
terms and conditions. Ramtron does not need to give any notice
to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
Without limiting the foregoing, Ramtron has complied with all
rules of the NASD applicable to the transactions contemplated
hereby.
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(iii) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or
court to which Ramtron is subject or any provision of its charter
or bylaws or (B) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which Ramtron is a party or
by which it is bound or to which any of its assets is subject,
provided, that Ramtron shall have obtained the written consent of
the National Electrical Benefit Fund, as described in Section
7(a)(x).
(iv) Brokers' Fees. Ramtron has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which
Shareholders could become liable or obligated.
(v) Duly Authorized, Fully Paid and Non-Assessable Stock. The
issuance of the Ramtron Shares has been duly authorized, and upon
issuance to Shareholders pursuant to the terms hereof, will be
validly issued, fully paid and nonassessable and are and will be
free and clear of any lien or encumbrances except restrictions on
transfer under state and federal securities laws and (a) with
respect to the Escrowed Shares as provided in the Escrow
Agreement and (b) with respect to the Lock-Up Shares as provided
in the Lock-Up Agreement. None of the Ramtron Shares are subject
to preemptive rights or rights of first refusal.
(vi) Litigation and Administrative Proceedings. There is no
litigation, proceeding or investigation pending or, to the best
knowledge of Ramtron, threatened against Ramtron in any federal,
state or local court, or before any administrative agency, that
seeks to enjoin or prohibit, or otherwise questions the validity
of, any action taken or to be taken pursuant to or in connection
with this Agreement.
(vii) Registration and Listing. Upon (a) the effectiveness of the
registration statement described in Section 6(f) below and (b)
completion of requirements of listing of additional shares on the
NASDAQ SmallCap system, the Unrestricted Shares will be freely
tradable on the NASDAQ SmallCap quotation system. Ramtron will
also comply with NASDAQ rules and list as additional shares on
NASDAQ SmallCap the Ramtron Shares.
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(viii) Section 16 and Section 13 Compliance. Ramtron has determined
that neither Shareholder is now, and shall not be without his or
her consent, an officer or director of Ramtron, including for the
purposes of Section 16 of the Securities Exchange Act.
Accordingly, as long as a Shareholder does not own more than 10%
of any class of registered equity security of Ramtron, such
Shareholder will not be filing Forms 3, 4 or 5 under Section 16
and Ramtron shall not report such Shareholder as required to make
such filings unless there is a mutually agreed change in a
Shareholder's functions at Ramtron. Each Shareholder shall be
solely responsible for any and all filings required by him or her
under Section 13 of the Exchange Act. Ramtron has provided to
each Shareholder a copy of its trading policies, if any,
including any "black-out" periods and shall keep Shareholder
immediately informed of any such periods during the time that he
or she is an employee of Ramtron.
(ix) Ramtron Filings and Compliance. Ramtron is current with all
filings required by the Securities and Exchange Commission.
Ramtron has provided true and correct copies of its Certificate
of Incorporation and Bylaws, and all amendments thereto, to
Shareholders. Ramtron is in full compliance with all rules of
the National Association of Securities Dealers applicable to it.
(x) Ramtron Capitalization. The Form 10-K filed by Ramtron for the
year ended December 31, 1999 (as amended), contains a true and
correct statement of the authorized, issued and outstanding
equity ownership of Ramtron as of the date thereof. Other than
as set forth therein or as reported in subsequent filings under
the Securities Exchange Act, there are no other outstanding
shares of capital stock or other securities of Ramtron and no
outstanding subscriptions, options, warrants, puts, calls,
rights, exchangeable or convertible securities or other
commitments or agreements of any nature relating to the capital
stock or other securities of Ramtron, or otherwise obligating
Ramtron to issue, transfer, sell, purchase, redeem or otherwise
acquire such stock or securities.
(xi) Ramtron Investigation. As of the Closing Date, Ramtron has no
knowledge of any fact or circumstance that would result in a
claim of indemnification by Ramtron for a breach of a
Shareholder's covenants or a Shareholder's representation or
warranty contained in Section 3(a) or Section 4.
(xii) Taxation. Ramtron represents that it presently intends to
continue Mushkin's historic business or use a significant portion
of Mushkin's business assets in a business. Notwithstanding
anything to the contrary set forth herein, Ramtron makes no
representations or warranty to Mushkin or to any shareholder of
Mushkin regarding the tax treatment of the Merger or whether the
Merger will qualify as a tax-free plan of reorganization under
the Code.
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4. Representations and Warranties Concerning Mushkin. The Shareholders
represent and warrant to Ramtron that the statements contained in this Section
4 are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 4), except as set forth in the disclosure schedule delivered by the
Shareholders to Ramtron on the date hereof and initialed by the Parties (the
"Disclosure Schedule"). The Shareholders have used their best efforts on the
Disclosure Schedule to reference the appropriate section number, however the
failure to reference such section number shall not be a breach of a
representation or warranty contained in a different Section if Ramtron could
reasonably ascertain the effect of the disclosure on the sections not
referenced. The Disclosure Schedule is intended to modify all of the
Shareholder representations and warranties in this Section 4, provided that
nothing in the Disclosure Schedule constitutes an admission against any
Shareholder's Interests. Without limiting the foregoing and regardless of the
language of any representation or warranty, no representations or warranties of
any kind are made with respect to any law of any country (or any sub-
jurisdiction of any country) other than the United States and its sub-
jurisdictions.
(a) Organization, Qualification, and Corporate Power. Mushkin is a
corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation. Mushkin is
duly authorized to conduct business and is in good standing under the
laws of each jurisdiction where the failure to qualify would have a
material adverse effect on Mushkin. Mushkin has full corporate power
and authority and all licenses, permits, and authorizations necessary
to carry on the businesses in which it is engaged and in which it
presently proposes to engage and to own and use the properties owned
and used by it. The Shareholders constitute all of the directors and
officers of Mushkin, provided that Kathy Roth is a vice president -
operations. The Shareholders have delivered to Ramtron correct and
complete copies of the charter and bylaws of Mushkin (as amended to
date). The minute books (containing the records of meetings of the
stockholders, the board of directors, and any committees of the board
of directors), the stock certificate books, and the stock record books
of Mushkin are correct and complete. Mushkin is not in default under
or in violation of any provision of its charter or bylaws that would
have a material adverse effect on Mushkin.
(b) Capitalization. The entire authorized capital stock of Mushkin
consists of 10,000 shares of Mushkin Common Stock, of which 2,040
Mushkin Shares are issued and outstanding. No shares of Mushkin
Common Stock are held in treasury. All of the issued and outstanding
shares of Mushkin Common Stock have been duly authorized, are validly
issued, fully paid, and nonassessable, and are held of record by the
respective Shareholders as set forth in Section 4(b) of the Disclosure
Schedule. There are no outstanding or authorized options, warrants,
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purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Mushkin
to issue, sell, or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights
with respect to Mushkin. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital
stock of Mushkin.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby, will, (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which
Mushkin is subject or any provision of the charter or bylaws of
Mushkin or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or
other arrangement to which Mushkin is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition
of any Security Interest upon any of its assets). Mushkin is not
required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
(d) Brokers' Fees. Mushkin has no Liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Assets. Mushkin has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by it, located
on its premises, or shown on the Most Recent Balance Sheet or acquired
after the date thereof, free and clear of all Security Interests,
except for properties and assets disposed of in the Ordinary Course of
Business since the date of the Most Recent Balance Sheet.
(f) Subsidiaries. Mushkin has no Subsidiaries.
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(g) Financial Statements. Included in the Due Diligence Materials are the
following financial statements (collectively the "Financial
Statements"): (i) unaudited balance sheets and statements of income,
changes in stockholders' equity, and cash flow as of and for the
fiscal years ended December 31, 1996, December 31, 1997, December 31,
1998 and December 31, 1999, for Mushkin, which Financial Statements
have been prepared by Mushkin's accountants; and (ii) unaudited
consolidated and consolidating balance sheets and statements of
income, changes in stockholders' equity, and cash flow (the "Most
Recent Financial Statements") as of and for the three months ended
March 31, 2000 (the "Most Recent Fiscal Month End") for Mushkin. The
Financial Statements (including any notes thereto) have not been
prepared in accordance with GAAP, but have been prepared on a
consistent basis throughout the periods covered thereby and present
fairly the financial condition of Mushkin as of such dates. The
results of operations of Mushkin for such periods, are correct and
complete, and are consistent with the books and records of Mushkin
(which books and records are correct and complete); provided, however,
that the Most Recent Financial Statements are subject to normal year-
end adjustments (which will not be material, individually or in the
aggregate) and the Financial Statements lack footnotes and other
presentation items.
(h) Events Subsequent to Most Recent Fiscal Month End. Since the Most
Recent Fiscal Month End, there has not been any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects of any of Mushkin. Without limiting
the generality of the foregoing, since that date:
(i) Mushkin has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
(ii) Mushkin has not entered into any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) either involving more than $100,000 or outside the
Ordinary Course of Business;
(iii) no party (including Mushkin) has accelerated, terminated,
modified, or cancelled any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses)
involving more than $100,000 to which Mushkin is a party or by
which Mushkin is bound;
(iv) Mushkin has not imposed or allowed to be imposed any Security
Interest upon any of its assets, tangible or intangible;
(v) Mushkin has not made any capital expenditure (or series of related
capital expenditures) either involving more than $100,000 or
outside the Ordinary Course of Business;
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(vi) Mushkin has not made any capital investment in, any loan to, or
any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and
acquisitions) either involving more than $100,000 or outside the
Ordinary Course of Business;
(vii) Mushkin has not issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either involving
more than $100,000 singly or $100,000 in the aggregate;
(viii) Mushkin has not delayed or postponed the payment of accounts
payable and other Liabilities outside the Ordinary Course of
Business;
(ix) Mushkin has not cancelled, compromised, waived, or released any
right or claim (or series of related rights and claims) either
involving more than $100,000 or outside the Ordinary Course of
Business;
(x) Mushkin has not granted any license or sublicense of any rights
under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in the charter or
bylaws of Mushkin;
(xii) Mushkin has not issued, sold, or otherwise disposed of any of its
capital stock, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock;
(xiii) Mushkin has not declared, set aside, or paid any dividend or made
any distribution with respect to its capital stock (whether in cash
or in kind) or redeemed, purchased, or otherwise acquired any of
its capital stock;
(xiv) Mushkin has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to its property;
(xv) Mushkin has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees
outside the Ordinary Course of Business;
(xvi) Mushkin has not entered into any employment contract or collective
bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement;
(xvii) Mushkin has not granted any increase in the base compensation of
any of its directors, officers, and employees outside the Ordinary
Course of Business;
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(xviii) Mushkin has not adopted, amended, modified, or terminated any
bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors,
officers, and employees (or taken any such action with respect to
any other Employee Benefit Plan);
(xix) Mushkin has not made any other change in employment terms for any
of its directors, officers, and employees outside the Ordinary
Course of Business;
(xx) Mushkin has not made or agreed to make any charitable or other
capital contribution outside the Ordinary Course of Business;
(xxi) there has not been any other material occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course
of Business involving Mushkin; and
(xxii) Mushkin has not committed to any of the foregoing.
(i) Undisclosed Liabilities. Mushkin has no Liability and, to the
Knowledge of the Shareholders, there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving rise to any
Liability), except for (i) Liabilities set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and (ii)
Liabilities which have arisen after the Most Recent Fiscal Month End
in the Ordinary Course of Business (none of which results from, arises
out of, relates to, is in the nature of, or was caused by any breach
of contract, breach of warranty, tort, infringement, or violation of
law).
(j) Legal Compliance. Mushkin has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges there under) of federal, state,
local, and foreign governments (and all agencies thereof) in a manner
such that there will be not material adverse effect on Mushkin for a
failure to comply, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against Mushkin alleging any failure so to comply.
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(k) Tax Matters.
(i) Mushkin has filed on or before the date due therefor all Tax
Returns that it was required to file. All such Tax Returns were
correct and complete in all material respects. All Taxes owed by
Mushkin (whether or not shown on any Tax Return) have been paid.
Mushkin is not currently the beneficiary of any extension of time
within which to file any Tax Return. No claim has ever been made
by an authority in a jurisdiction where Mushkin does not file Tax
Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the
assets of any of Mushkin that arose in connection with any
failure (or alleged failure) to pay any Tax.
(ii) Mushkin has withheld and paid on or before the due date therefor
all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
(iii) No Shareholder or director or officer (or employee responsible
for Tax matters) of Mushkin expects any authority to assess any
additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax Liability
of Mushkin either (A) claimed or raised by any authority in
writing or (B) as to which any of the Shareholders and the
directors and officers (and employees responsible for Tax
matters) of Mushkin has Knowledge based upon personal contact
with any agent of such authority. No Tax Returns have been
audited and no Tax Returns are the subject of any current audit.
The Shareholders have delivered to Ramtron correct and complete
copies of all federal income Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to by
Mushkin since December 31, 1996.
(iv) Mushkin has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(v) Mushkin has not filed a consent under Code Section 341(f)
concerning collapsible corporations. Mushkin has not made any
payments, is not obligated to make any payments, and is not a
party to any agreement that under certain circumstances could
obligate it to make any payments that will not be deductible
under Code Section 280G. Mushkin has not been a United States
real property holding corporation within the meaning of Code
Section 897(c)(2) during the applicable period specified in Code
Section 897(c)(1)(A)(ii). Mushkin has disclosed on its federal
income Tax Returns all positions taken therein that could give
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rise to a substantial understatement of federal income Tax within
the meaning of Code Section 6662. Mushkin is not a party to any
Tax allocation or sharing agreement. Mushkin (A) has not been a
member of an Affiliated Group filing a consolidated federal
income Tax Return or (B) does not have any Liability for the
Taxes of any Person (other than any of Mushkin) under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or
otherwise.
(vi) The unpaid Taxes of Mushkin (A) did not, as of the Most Recent
Fiscal Month End, exceed the reserve for Tax Liability (rather
than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of
the Most Recent Balance Sheet (rather than in any notes thereto)
and (B) do not exceed that reserve as adjusted for the passage of
time through the Closing Date in accordance with the past custom
and practice of Mushkin in filing its Tax Returns.
(l) Real Property.
(i) Mushkin owns no real property.
(ii) Section 4(l)(ii) of the Disclosure Schedule lists and describes
briefly all real property leased to Mushkin. No real property is
subleased to Mushkin. The Shareholders have delivered to Ramtron
correct and complete copies of the leases listed in Section
4(l)(ii) of the Disclosure Schedule (as amended to date). With
respect to each lease listed in Section 4(l)(ii) of the
Disclosure Schedule:
(A) the lease is legal, valid, binding, enforceable, and in full
force and effect;
(B) the lease will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated
hereby;
(C) no party to the lease is in breach or default, and no event
has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination,
modification, or acceleration there under;
(D) no party to the lease has repudiated any provision thereof;
(E) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease;
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(F) Mushkin has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the
leasehold;
(G) to the Knowledge of the Shareholders, all facilities leased
there under have received all approvals of governmental
authorities (including licenses and permits) required in
connection with the operation thereof and have been operated
and maintained in accordance with applicable laws, rules,
and regulations;
(H) all facilities leased there under are supplied with
utilities and other services necessary for the operation of
said facilities; and
(I) to the Knowledge of Shareholder, the owner of the facility
leased or subleased has good and marketable title to the
parcel of real property.
(m) Intellectual Property.
(i) To the Knowledge of the Shareholders, Mushkin owns or has the
right to use pursuant to license, sublicense, agreement, or
permission all Intellectual Property necessary for the operation
of the business of Mushkin as presently conducted. Each item of
Intellectual Property owned or used by Mushkin immediately prior
to the Closing hereunder will be owned or available for use by
Mushkin on identical terms and conditions immediately subsequent
to the Closing hereunder.
(ii) To the Knowledge of the Shareholders, Mushkin has not interfered
with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties,
and none of the Shareholders and the directors and officers (and
employees with responsibility for Intellectual Property matters)
of Mushkin has ever received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that Mushkin
must license or refrain from using any Intellectual Property
rights of any third party). To the Knowledge of any of the
Shareholders after reasonable inquiry of the employees with
responsibility for Intellectual Property matters, no third party
has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property
rights of Mushkin.
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(iii) Mushkin has no patents or patent applications. Mushkin has no
registered trademarks or copyrights. With respect to
Intellectual Property that is material to the business of
Mushkin, Section 4(m)(iii) of the Disclosure Schedule identifies
each unregistered trademark, unregistered copyright, registered
domain name, unregistered trade or service name or trade secret
and each license, agreement, or other permission which Mushkin
has granted to any third party with respect to any of its
Intellectual Property. The Shareholders have delivered to
Ramtron correct and complete copies of all such registrations,
applications, licenses, agreements, and permissions (as amended
to date) and have made available to Ramtron correct and complete
copies of all other written documentation evidencing ownership
and prosecution (if applicable) of each such item. With respect
to each item of Intellectual Property required to be identified
in Section 4(m)(iii) of the Disclosure Schedule, to the Knowledge
of the Shareholders:
(A) Mushkin possesses all right, title, and interest in and to
the item, free and clear of any Security Interest, license,
or other restriction;
(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; and
(C) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or is threatened
which challenges the legality, validity, enforceability,
use, or ownership of the item.
(iv) Section 4(m)(iv) of the Disclosure Schedule identifies each item
of Intellectual Property that any third party owns and that
Mushkin uses pursuant to license, sublicense, agreement, or
permission. The Shareholders have delivered to Ramtron correct
and complete copies of all such licenses, sublicenses,
agreements, and permissions (as amended to date). With respect to
each item of Intellectual Property required to be identified in
Section 4(m)(iv) of the Disclosure Schedule, to the Knowledge of
the Shareholders:
(A) the license, sublicense, agreement, or permission covering
the item is legal, valid, binding, enforceable, and in full
force and effect;
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the
Closing;
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(C) no party to the license, sublicense, agreement, or
permission is in breach or default, and no event has
occurred which with notice or lapse of time would constitute
a breach or default or permit termination, modification, or
acceleration there under;
(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above
are true and correct with respect to the underlying license;
(F) the underlying item of Intellectual Property is not subject
to any outstanding injunction, judgment, order, decree,
ruling, or charge;
(G) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or is threatened
which challenges the legality, validity, or enforceability
of the underlying item of Intellectual Property; and
(H) Mushkin has not granted any sublicense or similar right with
respect to the license, sublicense, agreement, or
permission.
(v) To the Knowledge of any of the Shareholders after reasonable
inquiry of Mushkin employees with responsibility for Intellectual
Property matters, none of the Intellectual Property of Mushkin
will interfere with, infringe upon, misappropriate, or otherwise
come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of its
business as presently conducted.
(vi) The merger will not require any third party consents under the
terms of the documentation related to the Software other than as
set forth in Section 4(l)(vi) of the Disclosure Schedule.
(n) Tangible Assets. Mushkin owns or leases all buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its
business as presently conducted. Each such tangible asset is free from
defects (patent and latent), has been maintained in accordance with
normal industry practice, is in good operating condition and repair
(subject to normal wear and tear), and is suitable for the purposes
for which it presently is used.
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(o) Inventory. The inventory of Mushkin consists of purchased parts, all
of which are merchantable and fit for the purpose for which they were
procured, and none of which is obsolete, damaged, or defective,
subject only to the reserve for inventory writedown set forth on the
face of the Most Recent Balance Sheet (rather than in any notes
thereto) as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of Mushkin.
(p) Contracts. Section 4(p) of the Disclosure Schedule lists the following
contracts and other agreements to which Mushkin is a party:
(i) any agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease
payments in excess of $10,000 per annum;
(ii) any agreement (or group of related agreements) for the purchase
or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of
services, the performance of which will extend over a period of
more than one year, result in a material loss to Mushkin, or
involve consideration in excess of $50,000;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which it has
created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$50,000 or under which it has imposed a Security Interest on any
of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or noncompetition;
(vi) any agreement with any of the Shareholders and their Affiliates;
(vii) any profit sharing, stock option, Merger, stock appreciation,
deferred compensation, severance, or other material plan or
arrangement for the benefit of its current or former directors,
officers, and employees;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a full-
time, part-time, consulting, or other basis providing annual
compensation in excess of $50,000 or providing severance
benefits;
(x) any agreement under which it has advanced or loaned any amount to
any of its directors, officers and employees outside the Ordinary
Course of Business;
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(xi) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of Mushkin; or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000.
The Shareholders have delivered to Ramtron a correct and complete copy
of each written agreement listed in Section 4(p) of the Disclosure
Schedule and a written summary setting forth the terms and conditions
of each oral agreement referred to in Section 4(p) of the Disclosure
Schedule. With respect to each such agreement: (A) the agreement is
legal, valid, binding, enforceable, and in full force and effect; (B)
the agreement will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (C) no party is
in breach or default, and to the Knowledge of the Shareholders, no
event has occurred which with notice or lapse of time would constitute
a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any
provision of the agreement.
(q) Notes and Accounts Receivable. All notes and accounts receivable of
Mushkin are reflected properly on its books and records, are valid
receivables subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at
their recorded amounts, subject only to the reserve for bad debts set
forth on the face of the Most Recent Balance Sheet (rather than in any
notes thereto) as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of Mushkin.
(r) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of any of Mushkin.
(s) Insurance. Included in the Due Diligence Materials are true and
correct copies of each insurance policy (including policies providing
property, casualty, liability, and workers' compensation coverage and
bond and surety arrangements) to which Mushkin has been a party, a
named insured, or otherwise the beneficiary of coverage at any time.
With respect to each such insurance policy: (A) the policy is legal,
valid, binding, enforceable, and in full force and effect; (B) the
policy will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the consummation of
the transactions contemplated hereby; (C) neither Mushkin nor any
other party to the policy is in breach or default (including with
respect to the payment of premiums or the giving of notices), and no
event has occurred which, with notice or the lapse of time, would
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constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (D) no party to
the policy has repudiated any provision thereof. Mushkin has at all
times been covered by insurance in scope and amount customary and
reasonable for the businesses in which it has engaged. Section 4(s)
of the Disclosure Schedule describes any self-insurance arrangements
affecting Mushkin.
(t) Litigation. Section 4(t) of the Disclosure Schedule sets forth each
instance in which Mushkin (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a
party or is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator. None of the actions,
suits, proceedings, hearings, and investigations set forth in Section
4(t) of the Disclosure Schedule could result in any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects of Mushkin. None of the Shareholders
after inquiry of employees of Mushkin with responsibility for
litigation matters has any reason to believe that any such action,
suit, proceeding, hearing, or investigation may be brought or
threatened against Mushkin.
(u) Product Warranty. Each product sold, leased, or delivered by Mushkin
has been in conformity with all applicable contractual commitments and
all express and implied warranties, and Mushkin has no Liability (and
there is no Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against
Mushkin giving rise to any Liability) for replacement or repair
thereof or other damages in connection therewith, subject only to the
reserve for product warranty claims set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted
for the passage of time through the Closing Date in accordance with
the past custom and practice of Mushkin. No product sold, leased, or
delivered by Mushkin is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of sale
or lease. Tab C33 of the Due Diligence Materials includes copies of
the standard terms and conditions of sale or lease for Mushkin
(containing applicable guaranty, warranty, and indemnity provisions).
(v) Product Liability. Mushkin has no Liability (and there is no Basis for
any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against Mushkin
giving rise to any Liability) arising out of any injury to individuals
or property as a result of the ownership, possession, or use of any
product sold, leased, or delivered by Mushkin.
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(w) Employees. To the Knowledge of any of the Shareholders after
reasonable inquiry of the employees of Mushkin with responsibility for
employment matters, no executive, key employee, or group of employees
has any plans to terminate employment with Mushkin. Mushkin is not a
party to or bound by any collective bargaining agreement, nor has
Mushkin experienced any strikes, grievances, claims of unfair labor
practices, or other collective bargaining disputes. None of the
Shareholders after reasonable inquiry of the employees of Mushkin with
responsibility for employment matters, has any Knowledge of any
organizational effort presently being made or threatened by or on
behalf of any labor union with respect to employees of Mushkin.
(x) Employee Benefits.
(i) Section 4(x) of the Disclosure Schedule lists each Employee
Benefit Plan that Mushkin maintains or to which Mushkin
contributes.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) complies in form and in
operation in all respects with the applicable requirements,
if any, of ERISA, the Code, and other applicable laws.
(B) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, PBGC-1's, and
Summary Plan Descriptions) have been filed or distributed
appropriately with respect to each such Employee Benefit
Plan. The requirements of Part 6 of Subtitle B of Title I of
ERISA and of Code Section 4980B have been met with respect
to each such Employee Benefit Plan which is an Employee
Welfare Benefit Plan.
(C) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have
been paid to each such Employee Benefit Plan which is an
Employee Pension Benefit Plan and all contributions for any
period ending on or before the Closing Date which are not
yet due have been paid to each such Employee Pension Benefit
Plan or accrued in accordance with the past custom and
practice of Mushkin. All premiums or other payments for all
periods ending on or before the Closing Date have been paid
with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan.
(D) The market value of assets under each such Employee Benefit
Plan which is an Employee Pension Benefit Plan (other than
any Multiemployer Plan) equals or exceeds the present value
of all vested and nonvested Liabilities there under
determined in accordance with PBGC methods, factors, and
assumptions applicable to an Employee Pension Benefit Plan
terminating on the date for determination.
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(E) The Shareholders have delivered to Ramtron correct and
complete copies of the plan documents and summary plan
descriptions, the most recent determination letter received
from the Internal Revenue Service, the most recent Form 5500
Annual Report, and all related trust agreements, insurance
contracts, and other funding agreements which implement each
such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that Mushkin maintains
or ever has maintained or to which Mushkin contributes, ever has
contributed, or ever has been required to contribute:
(A) No such Employee Benefit Plan which is in Employee Pension
Benefit Plan (other than any Multiemployer Plan) has been
completely or partially terminated or been the subject of a
Reportable Event as to which notices would be required to be
filed with the PBGC. No proceeding by the PBGC to terminate
any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or threatened.
(B) There have been no Prohibited Transactions with respect to
any such Employee Benefit Plan. No Fiduciary has any
Liability for breach of fiduciary duty or any other failure
to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan.
No action, suit, proceeding, hearing, or investigation with
respect to the administration or the investment of the
assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending or threatened. None of the
Shareholders after inquiry of employees of Mushkin with
responsibility for employee benefits matters, has any
Knowledge of any Basis for any such action, suit,
proceeding, hearing, or investigation.
(C) Mushkin has not incurred, and none of the Shareholders and
the directors and officers (and employees with
responsibility for employee benefits matters) of Mushkin has
any reason to expect that Mushkin will incur, any Liability
to the PBGC (other than PBGC premium payments) or otherwise
under Title IV of ERISA (including any withdrawal Liability)
or under the Code with respect to any such Employee Benefit
Plan which is an Employee Pension Benefit Plan.
(iii) Mushkin has never contributed to, or ever has been required to
contribute to any Multiemployer Plan or has any Liability
(including withdrawal Liability) under any Multiemployer Plan.
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(iv) Mushkin does not maintain or contribute, and has never maintained
or contributed, or ever has been required to contribute to any
Employee Welfare Benefit Plan providing medical, health, or life
insurance or other welfare-type benefits for current or future
retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code Section 4980B).
(y) Guaranties. Mushkin is not a guarantor or otherwise is liable for any
Liability or obligation (including indebtedness) of any other Person.
(z) Environment, Health, and Safety.
(i) Mushkin has complied with all Environmental, Health, and Safety
Laws in a manner such that there will be no claim that would have
a material adverse effect on Mushkin, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them
alleging any failure so to comply.
(ii) Mushkin does not have any Liability (and Mushkin has not handled
or disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property or
facility in any manner that could form the Basis for any present
or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against Mushkin giving rise
to any material Liability) for damage to any site, location, or
body of water (surface or subsurface), for any illness of or
personal injury to any employee or other individual, or for any
reason under any Environmental, Health, and Safety Law.
(iii) All properties and equipment used in the business of Mushkin have
been free of asbestos, PCB's, methylene chloride,
trichloroethylene, 1,2-trans-dichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous Substances.
(aa) Compliance with Export Control Laws and Regulations.
Mushkin is and has been at all times in compliance with all
applicable U.S. export control laws, including without
limitation all Export Control Regulations, International
Traffic in Arms Regulations and export controls of the
Nuclear Regulatory Commission. In addition, Mushkin is and
has been at all times in compliance with all U.S. embargoes
and other controls that may be or from time to time have
been applicable to Mushkin's international business.
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(ab) Certain Business Relationships with Mushkin. Other than
being employees, officers and shareholders, none of the
Shareholders or their Affiliates has been involved in any
business arrangement or relationship with Mushkin within
the past 12 months, and none of the Shareholders and their
Affiliates owns any asset, tangible or intangible, which is
used in the business of any of Mushkin.
(ac) Disclosure. The representations and warranties contained in
this Section 4 do not contain any untrue statement of a
material fact or omit to state any material fact necessary
in order to make the statements and information contained
in this Section 4 not misleading.
(ad) Shareholder Investigation. As of the Closing Date, no
Shareholder has any knowledge of any fact or circumstance
that would result in a claim of indemnification by such
Shareholder for a breach of Ramtron's covenants or a
representation or warranty contained in Section 3(b).
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use his or its best efforts to take
all action and to do all things necessary, proper, or advisable in
order to consummate and make effective the transactions contemplated
by this Agreement (including satisfaction, but not waiver, of the
closing conditions to be fulfilled by such Party set forth in Section
7 below).
(b) Notices and Consents. The Shareholders will cause Mushkin to give any
notices to third parties, and will cause Mushkin to use its best
efforts to obtain any third-party consents, that Ramtron may request
in connection with the matters referred to in Section 4(c) above. Each
of the Parties will (and the Shareholders will cause Mushkin to) give
any notices to, make any filings with, and use its good faith efforts
to obtain any authorizations, consents, and approvals of governments
and governmental agencies in connection with the matters referred to
in Section 3(a)(ii), Section 3(b)(ii), and Section 4(c) above.
(c) Operation of Business. The Shareholders will not cause or permit
Mushkin to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting
the generality of the foregoing, the Shareholders will not cause or
permit Mushkin to (i) declare, set aside, or pay any dividend or make
any distribution with respect to its capital stock or redeem,
purchase, or otherwise acquire any of its capital stock, (ii) issue
any additional capital stock, or (iii) otherwise engage in any
practice, take any action, or enter into any transaction of the sort
described in Section 4(h) above. Notwithstanding the foregoing,
Mushkin may make the Permitted Distribution.
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(d) Preservation of Business. The Shareholders will use their best efforts
to cause Mushkin to keep its business and properties substantially
intact, including its present operations, physical facilities, working
conditions, and relationships with lessors, licensors, suppliers,
customers, and employees.
(e) Full Access. Each of the Shareholders will permit, and the
Shareholders will cause Mushkin to permit, representatives of the
Ramtron to have full access at all reasonable times, and in a manner
so as not to interfere with the normal business operations of Mushkin,
to all premises, properties, personnel, books, records (including Tax
records), contracts, and documents of or pertaining to Mushkin.
(f) Notice of Developments. The Shareholders may elect to give prompt
written notice to Ramtron of any material adverse development causing
a breach of any of the representations and warranties in Section 4
above. Unless Ramtron terminates this Agreement under Section
9(a)(ii), the written notice pursuant to this Section 5(f) will be
deemed to have amended the Disclosure Schedule, to have qualified the
representations and warranties contained in Section 4 above, and to
have cured any misrepresentation or breach of warranty that otherwise
might have existed under this Agreement by reason of the developed.
(g) Exclusivity. None of the Shareholders will (and the Shareholders will
not cause or permit Mushkin to) (i) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or
any substantial portion of the assets of, Mushkin (including any
acquisition structured as a merger, consolidation, or share exchange)
or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to
do or seek any of the foregoing. Neither of the Shareholders will vote
their Mushkin Shares in favor of any such acquisition structured as a
merger, consolidation, or share exchange. The Shareholders will notify
Ramtron immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.
6. Post-Closing Covenants. The Parties agree as follows with respect to the
period following the Closing.
(a) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as
any other Party reasonably may request, all at the sole cost and
expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor under Section 8 below). The
Shareholders acknowledge and agree that from and after the Closing
Ramtron or the Surviving Corporation will be entitled to possession of
all documents, books, records (including Tax records), agreements, and
financial data of any sort relating to Mushkin (provided that the
Shareholders shall be entitled to commercially reasonable copies of
such records (at Shareholder expense) for archival purposes only.
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(b) Litigation Support. In the event and for so long as any Party actively
is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement
or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure
to act, or transaction on or prior to the Closing Date involving
Mushkin, each of the other Parties will cooperate with him, her or it
and his, hers or its counsel in the contest or defense, make available
their personnel, and provide such testimony and access to their books
and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled
to indemnification therefor under Section 8 below).
(c) Transition. None of the Shareholders will take any action that is
designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate of Mushkin
from maintaining the same business relationships with Mushkin after
the Closing as it maintained with Mushkin prior to the Closing. Each
of the Shareholders will refer all customer inquiries relating to the
businesses of Mushkin to Ramtron or the Surviving Corporation from and
after the Closing.
(d) Confidentiality. Each of the Shareholders will treat and hold as such
all of the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and
deliver promptly to Ramtron or destroy, at the request and option of
Ramtron, all tangible embodiments (and all copies) of the Confidential
Information which are in his or her possession. In the event that
either of the Shareholders is requested or required (by oral question
or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, that Shareholder
will notify Ramtron promptly of the request or requirement so that
Ramtron may seek an appropriate protective order or waive compliance
with the provisions of this Section 6(d). If, in the absence of a
protective order or the receipt of a waiver hereunder, of the
Shareholder is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for
contempt, that Shareholder may disclose the Confidential Information
to the tribunal; provided, however, that the disclosing Shareholder
shall use his or her best efforts to obtain, at the reasonable request
of Ramtron, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information
required to be disclosed as Ramtron shall designate. The foregoing
provisions shall not apply to any Confidential Information which is
generally available to the public immediately prior to the time of
disclosure.
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(e) Covenant Not to Compete. Through December 31, 2001, neither of the
Shareholders will engage directly or indirectly in the business of
selling integrated circuits or other computer memory products of any
sort over the Internet or any other e-commerce medium (the
"Competitive Business") in any geographic area in which any of Mushkin
conducts that business as of the Closing Date; provided, however, that
ownership of less than five percent (5%) of the outstanding stock of
any publicly traded corporation shall not be deemed to constitute
engaging in such business solely by reason of such stockholding. If
the final judgment of a court of competent jurisdiction declares that
any term or provision of this Section 6(e) is invalid or
unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power
to reduce the scope, duration, or area of the term or provision, to
delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid
and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time
within which the judgment may be appealed.
(f) Registration of the Ramtron Shares.
(i) For purposes of this Section 6(f), the following definitions
shall apply:
(A) The terms "register," "registered" and "registration" refer
to a registration under the Securities Act effected by
preparing and filing a registration statement or similar
document in compliance with the Securities Act or an
amendment thereto, and the declaration or ordering of
effectiveness of such registration statement, document or
amendment thereto.
(B) The term "Registrable Securities" means the Ramtron Shares
and any securities of the Ramtron or securities of any
successor corporation issued as, or issuable upon the
conversion or exercise of any warrant, right or other
security that is issued as, a dividend or other distribution
with respect to, or in exchange for or in replacement of,
the Ramtron Shares.
(ii) (A) At any time after the ninety-first (91st) day following the
Closing Date (the "Registration Date"), and from time to
time thereafter, any Shareholder shall have the right to
require by notice in writing that the Ramtron register all
or any part of such Registrable Securities held by such
Shareholder (a "Demand Registration") and the Ramtron shall
thereupon effect such registration in accordance herewith.
As a separate covenant, in addition to Demand Registrations
rights above, Ramtron agrees to file a registration
statement on Form S-3 (the "Form S-3 Registration") prior to
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30 days immediately following the Closing Date in order to
register the Shareholders' respective resales of the Ramtron
Shares, and to use best efforts to cause such registration
statement to be declared effective as soon as practicable
thereafter and to use best efforts to have such time be not
later than the Registration Date.
(B) Ramtron shall not be obligated to effect a Demand
Registration pursuant to Subsection (f)(ii)(A): (1) if all
of the Registrable Securities held by a Shareholder which
are intended to be covered by the Demand Registration are,
at the time of the request of a Demand Registration,
included in an effective registration statement and Ramtron
is in compliance with its obligations under Subsection
(f)(iv)(B) through (E) hereof with respect to such
registration statement, or (2) within 180 days after the
effective date of any other registration as to which a
Shareholder was given piggy-back rights pursuant to
Subsection (f)(iii) hereof and in which the Shareholders
cumulatively were able to register and sell at least eighty
percent (80%) of the Registrable Securities requested by
such Shareholders to be included in such registration. The
exceptions under (1) and (2) above do not apply to the
previously filed Form S-3 Registration.
(iii) If Ramtron proposes to register (including for this purpose a
registration effected by Ramtron for shareholders other than a
Shareholder) any of its stock or other securities under the
Securities Act in connection with a public offering of such
securities (other than a registration on Form S-4, Form S-8 or
other limited purpose form) after the Registration Date and such
Registrable Securities have not heretofore been included in a
registration statement under Subsection (f)(ii) which remains
effective, Ramtron shall, at such time, promptly give the
Shareholders written notice of such registration. Upon the
written request of one or more Shareholders given within twenty
(20) days after receipt of such notice by such Shareholders,
Ramtron shall cause to be registered under the Securities Act all
of the Registrable Securities that Shareholders have requested to
be registered. However, Ramtron shall have no obligation under
this Subsection (iii) to the extent that, with respect to a
public offering registration, any underwriter of such public
offering reasonably requests that the Registrable Securities or a
portion thereof be excluded therefrom.
(iv) Whenever required under this Subsection (f) to effect the
registration of any Registrable Securities, Ramtron shall, as
expeditiously as reasonably possible:
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(A) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best
efforts to cause such registration to become effective and,
upon the request of any Shareholder, keep such registration
statement effective for so long as such Shareholder desires
to dispose of the securities covered by such registration
statement (but not after such Shareholder in the reasonable
opinion of its counsel is free to sell such securities under
the provisions of Rule 144(k) under the Securities Act).
(B) Prepare and file with the SEC such amendments and
supplements to such registration statements and the
prospectus used in connection with such registration
statement as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(C) Furnish to each Shareholder whose Registrable Securities are
included in a registration statement such numbers of copies
of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the 1933 Securities Act,
and such other documents as such Shareholder may reasonably
request in order to facilitate the disposition of
Registrable Securities owned such Seller.
(D) Use its best efforts to register and qualify the securities
covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by each Shareholder whose
Registrable Securities are included in a registration
statement, provided that the Ramtron shall not be required
in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service and
process in any such states or jurisdictions.
(E) Notify each Shareholder whose Registrable Securities are
included in a registration statement, of the happening of
any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an
untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing.
(F) Furnish, at the request of each Shareholder whose
Registrable Securities are included in a registration
statement, an opinion of counsel of Ramtron, dated the
effective date of the registration statement, as to the due
authorization and issuance of the securities being
registered and compliance with securities laws by Ramtron in
connection with the authorization and issuance thereof.
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<PAGE>
(v) Each Shareholder whose Registrable Securities are included in a
registration statement shall furnish to Ramtron in connection
with any registration under this Section 6 such information
regarding itself, the Registrable Securities and other securities
of Ramtron held by it, and the intended method of disposition of
such securities as shall be required to effect the registration
of the Registrable Securities held by Shareholder.
(vi) (A) Ramtron shall indemnify, defend and hold harmless each
holder of Registrable Securities which are included in a
registration statement pursuant to the provisions of
Subsections (f)(ii) or (f)(iii), any underwriter (as defined
in the Securities Act) for such holder, and the directors,
officers and controlling persons of such holder or
underwriter from and against, and shall reimburse all of
them with respect to, any and all claims, suits, demands,
causes of action, losses, damages, liabilities, costs or
expenses (singly, "Liability" and collectively,
"Liabilities") to which any of them may become subject under
the Securities Act or otherwise, arising from or relating to
(1) any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement
thereto, or (2) the 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;
provided, however, that Ramtron shall not be liable in any
such case to the extent that any Liability arises out of or
is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in
conformity with information furnished by such person in
writing specifically for use in the preparation thereof.
(B) Each holder of Registrable Securities included in a
registration pursuant to the provisions of Subsection
(f)(ii) or (f)(iii) shall indemnify, defend, and hold
harmless Ramtron, its directors, officers and controlling
persons, and shall reimburse the Ramtron, its directors,
officers and controlling persons with respect to, any and
all Liabilities to which any of them may become subject
under the Securities Act or otherwise, arising from or
relating to (1) any untrue statement or alleged untrue
statement of any material fact contained in such
registration statement, any prospectus contained therein or
any amendment or supplement thereto, or (2) the 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, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in
reliance upon and in conformity with written information
furnished by or on behalf of such holder specifically for
use in the preparation thereof.
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<PAGE>
(C) Promptly after receipt by an indemnified party pursuant to
the provisions of Subsection (f)(vi)(A) or (f)(vi)(B) of
notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions, such
indemnified party shall, if a claim thereof is to be made
against the indemnifying party pursuant to the provisions of
Subsection (f)(vi)(A) or (f)(vi)(B), promptly notify the
indemnifying party of the commencement thereof; provided,
however, that the failure to so notify the indemnifying
party shall not relieve it from its indemnification
obligations hereunder except to the extent that the
indemnifying party is materially prejudiced by such failure.
If such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, if the defendants
in any action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses
different from or in addition to those available to the
indemnifying party, or if there is conflict of interest
which would prevent counsel for the indemnifying party from
also representing the indemnified party, the indemnified
party shall have the right to select separate counsel to
participate in the defense of such action on behalf of such
indemnified party. After notice from the indemnifying party
to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable
to such indemnified party pursuant to Subsection (f)(vi)(A)
or (f)(vi)(B) for any expense of counsel subsequently
incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of
investigation, unless (1) the indemnified party shall have
employed counsel in accordance with the provisions of the
preceding sentence, or (2) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time
after the notice of the commencement of the action. An
indemnifying party shall not be responsible for amounts paid
in settlement without its consent, provided that its consent
may not be unreasonably withheld.
(vii) (A) With respect to the inclusion of Registrable Securities in a
registration statement pursuant to Subsections (f)(ii) or
(f)(iii), all fees, costs and expenses of and incidental to
such registration, inclusion and public offering shall be
borne by Ramtron; provided, however, that any
securityholders participating in such registration shall
bear their pro rata share of the underwriting discounts and
commissions, if any.
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(B) The fees, costs and expenses of registration to be borne by
Ramtron as provided in this Subsection (f)(vii) shall
include, without limitation, all registration, filing and
NASD fees, printing expenses, fees and disbursements of
counsel and accountants for Ramtron, and all legal fees and
disbursements and other expenses of complying with state
securities or Blue Sky laws of any jurisdiction or
jurisdictions in which securities to be offered are to be
registered and qualified. Fees and disbursements of counsel
and accountants for the selling securityholders shall,
however, be borne by the respective selling securityholder.
(viii) The rights to cause Ramtron to register all or any portion of
Registrable Securities pursuant to this Subsection (f) may be
assigned by any Shareholder to a transferee or assignee of 20% or
more of the Ramtron Shares originally issued to such Shareholder
hereunder. Within a reasonable time after such transfer the
Shareholder shall notify Ramtron of the name and address of such
transferee or assignee and the securities with respect to which
such registration rights are being assigned. Such assignment
shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. Any transferee
asserting registration rights hereunder shall be bound by the
provisions of this Subsection (f).
(ix) From and after the date of this Agreement, Ramtron shall not
agree to allow the holders of any securities of Ramtron to
include any of their securities in any registration statement
filed by Ramtron pursuant to Subsection (f)(ii) unless the
inclusion of such securities will not reduce the amount of the
Registrable Securities included therein.
(g) Restrictions on transfer of the Ramtron Shares.
(i) The certificates for 50% of the total number of the Ramtron
Shares issued to each Shareholder (the "Restricted Shares") will
be subject to the restrictions of the Lock-Up Agreement.
(ii) The Ramtron Shares that are not Restricted Shares (the
"Unrestricted Shares") shall be transferable at any time by
Shareholders; subject to the restrictions in Section 1(a) of the
Lock-Up Agreement
(h) Employee Stock Option Plan. Ramtron agrees that all employees of
Mushkin will, so long as 80% or more of Mushkin is owned by Ramtron,
be entitled to participate in such employee stock option plans as may
be available to Ramtron's employees. In the event that Ramtron's
Subsidiary, Enhanced Memory Systems, Inc. ("EMS"), becomes a publicly
traded company at any time during which Mushkin is operating a part of
an affiliated EMS business, the employees of Mushkin shall be entitled
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to receive, in substitution for such Ramtron stock option rights,
rights in EMS stock or stock options of value equal to or greater than
such Ramtron stock option rights. In addition to the employee stock
options to be granted to William M. Mushkin in the Employment
Agreement described in Section 7(a) of this Agreement, Ramtron agrees
that fifteen thousand (15,000) employee stock options to purchase
Ramtron Common Stock will be available for grants to employees of
Mushkin, the respective grantees and numbers of options to be
reasonably determined by William M. Mushkin in consultation with
Ramtron. Certain additional option grants and salary adjustments for
employees of Mushkin other than William M. Mushkin have been agreed in
a separate schedule previously communicated to and from Ramtron and
William M. Mushkin, which schedule shall be initialed by those parties
prior to the Closing.
(i) Abandonment. In the event that Ramtron at any time ceases substantial
use of the domain "mushkin.com" Ramtron will sell such domain and any
and all trademarks using the word "Mushkin" or a confusingly similar
variant thereof to Mushkin for $10,000 payable to Ramtron at the time
of execution of appropriate bills of sale selling the rights "as-is"
without any warranties except warranty of ownership.
(j) S Corporation. The Shareholders shall timely file a final Tax Return
for the partial year ended the Closing Date as an S Corporation. Prior
to the Closing, Mushkin may pay the Shareholders a cash amount
estimated to equal 40% multiplied by the amount of income allocable to
such Shareholder for such partial year (the "Permitted Distribution").
(k) Employees. Immediately after the Closing, Ramtron shall offer
employment to all current Mushkin employees on substantially similar
or better terms than they are currently employed. Such persons shall
not be required to relocated during the first year of employment
without their consent. Such persons shall receive credit for the time
employed with Mushkin for benefit plan purposes (except stock option
vesting).
(l) Contingent Payment Covenant. If on the date of the effectiveness of
the Form S-3 Registration covering the Shareholders' resale of the
Ramtron Shares as provided in Section 6(f), the price per share of
Ramtron Common Stock, such price to be the amount per share equal to
the average of the closing sale prices on the Nasdaq Stock Market for
the five (5) trading days ending with the trading day immediately
preceding the date of the effectiveness of that registration statement
(the "Contingent Payment Price"), is less than $10.50, then Ramtron
shall promptly pay to the Shareholders a cumulative amount (the
"Contingent Payment Amount") equal to $10.50 less the Contingent
Payment Price, multiplied by the number of the Ramtron Shares, subject
to the proviso of the immediately following sentence. Notwithstanding
the immediately preceding sentence, the Contingent Payment Amount
shall not in any event exceed Five Hundred Thousand Dollars
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($500,000), regardless of the Contingent Payment Price. The
Contingent Payment Amount shall be paid pro rata to the respective
holders of the certificates representing the Ramtron Shares based on
the number of such shares held of record by such holders. The
Contingent Payment Amount may, at Ramtron's sole option, be paid in
cash or by delivery of that number of shares of Ramtron Common Stock
determined by dividing the Contingent Payment Amount by the Contingent
Payment Price, with any entitlement to fractional shares being in any
event payable in cash.
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of Ramtron. The obligations of Ramtron to
consummate the transactions provided in this Agreement are subject to
satisfaction of the following conditions at or prior to the Closing,
the imposition of which is solely for the benefit of Ramtron and any
one or more of which may be expressly waived by Ramtron, in its sole
discretion:
(i) the representations and warranties set forth in Section 3(a) and
Section 4 above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) Mushkin shall have procured all of the third party consents, if
any, required with respect to the material agreement or
agreements listed on Section 4(p) of the Disclosure Schedule;
(iii) The Shareholders shall have executed and delivered the Lock-Up
Agreement.
(iv) no action, suit, or proceeding shall be pending, or to
Shareholders' knowledge, threatened before any court or quasi-
judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of Ramtron to own
the Common Stock of the Surviving Corporation and to control the
Surviving Corporation, or (D) affect adversely the right of the
Surviving Corporation to own its assets and to operate its
businesses (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);
(v) the Shareholders shall have delivered to Ramtron a certificate to
the effect that each of the conditions specified above in Section
7(a)(i)-(iv) is satisfied in all respects;
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(vi) Ramtron and William Michael Mushkin shall have entered into an
Employment Agreement in form and substance as set forth in
Exhibit D attached hereto and the same shall be in full force and
effect;
(vii) Ramtron, Shareholders and an escrow agent satisfactory to all
such Parties shall have entered into the Escrow Agreement;
(viii) Ramtron shall have received from counsel to the Shareholders an
opinion in substance as set forth in Exhibit E attached hereto,
addressed to Ramtron and dated as of the Closing Date;
(ix) Ramtron shall have received the resignations, effective as of the
Closing, of each director and officer of Mushkin;
(x) Ramtron shall have obtained the written consent of the National
Electrical Benefit Fund, under and pursuant to the Loan Agreement
dated August 6, 1999, between Ramtron and the National Electrical
Benefit Fund, consenting to the transactions to be effected
pursuant to this Agreement;
(xi) all actions to be taken by the Shareholders in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Ramtron; and
(xii) Mushkin shall, after making the Permitted Distribution, have at
the Closing a free and unencumbered net cash balance of not less
than Five Hundred Thousand Dollars ($500,000) on deposit at Union
Bank and Trust, and the Shareholders shall have notified the
responsible Bank official that Ramtron shall be permitted to
confirm such deposit.
Ramtron may waive any condition specified in this Section 7(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Shareholders. The obligation of the
Shareholders to consummate the transactions to be performed by them in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in Section 3(b)
above shall be true and correct in all material respects at and
as of the Closing Date;
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(ii) no action, suit, or proceeding shall be pending or, to Ramtron's
knowledge, threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by
this Agreement (B) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall
be in effect); or (C) affect adversely the right of the
Shareholders to own the Ramtron Shares;
(iii) Ramtron shall have delivered to the Shareholders a certificate to
the effect that each of the conditions specified above in Section
7(b)(i)-(ii) is satisfied in all respects;
(iv) Ramtron and William Michael Mushkin shall have entered into the
Employment Agreement in form and substance as set forth in
Exhibit D and the same shall be in full force and effect;
(v) the Shareholders shall have received from counsel to Ramtron an
opinion in substance as set forth in Exhibit F attached hereto,
addressed to the Shareholders, and dated as of the Closing Date;
(vi) all actions to be taken by Ramtron in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be
satisfactory in form and substance to the Shareholders; and
(vii) Ramtron, Shareholders and an escrow agent satisfactory to all
such Parties shall have entered into the Escrow Agreement.
The Shareholders may waive any condition specified in this Section 7(b)
if they execute a writing so stating at or prior to the Closing.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties.
The representations and warranties of a Party contained in Sections 3
and 4 of this Agreement shall survive the Closing hereunder and
continue in full force and effect for a period of twelve months
thereafter at which time they shall expire unless a claim for
indemnification has been made by such date, and provided further that
the representations and warranties of parties contained in Sections
3(b)(x), 4(b) and 4(k) above shall survive the Closing and continue in
full force and effect, subject to any applicable statutes of
limitations.
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(b) Indemnification Provisions for Benefit of Ramtron. Subject to the
limitations in Section 8(f), in the event either of the Shareholders
breaches (or in the event any third party alleges facts that, if true,
would mean either of the Shareholders has breached) any of their
representations or warranties contained in Sections 3 or 4 above, and
provided that Ramtron makes a written claim for indemnification
against any of the Shareholders in accordance with Section 10(j) below
within the survival period pursuant to Section 8(a) above, then each
of the Shareholders agrees to indemnify Ramtron from and against the
entirety of any Adverse Consequences Ramtron may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences Ramtron may suffer after the end of such survival period)
resulting from, arising out of, relating to, in the nature of, or
caused by the breach (or the alleged breach); provided, however, that
the Shareholders shall not have any obligation to indemnify Ramtron
from and against any Adverse Consequences resulting from, arising out
of, relating to, in the nature of, or caused by the breach (or alleged
breach) of any representation or warranty of the Shareholders
contained in Section 3 or Section 4 above until Ramtron has suffered
Adverse Consequences by reason of all such breaches (or alleged
breaches) in excess of a $50,000 aggregate threshold (at which point
the Shareholders will be obligated to indemnify Ramtron from and
against all such Adverse Consequences relating back to the first
dollar).
(c) Indemnification Provisions for Benefit of the Shareholders. In the
event Ramtron breaches (or in the event any third party alleges facts
that, if true, would mean Ramtron has breached) any of its
representations or warranties in Section 3(b) above and, provided that
any of the Shareholders makes a written claim for indemnification
against Ramtron in accordance with Section 10(j) below within the
survival period pursuant to Section 8(a) above, then Ramtron agrees to
indemnify each of the Shareholders from and against the entirety of
any Adverse Consequences the Shareholders may suffer through and after
the date of the claim for indemnification (including any Adverse
Consequences the Shareholders may suffer after the end of any
applicable survival period) resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or the alleged breach).
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other
Party (the "Indemnifying Party") under this Section 8, then the
Indemnified Party shall promptly notify each Indemnifying Party
thereof in writing; provided, however, that no delay on the part
of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.
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(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of
its choice reasonably satisfactory to the Indemnified Party so
long as (A) the Indemnifying Party notifies the Indemnified Party
in writing within 15 business days after the Indemnified Party
has given notice of the Third Party Claim that the Indemnifying
Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim, (B) the Indemnifying
Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party
will have the financial resources to defend against the Third
Party Claim and fulfill its indemnification obligations
hereunder, and (D) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 8(d)(ii) above,
(A) the Indemnified Party may retain separate co-counsel at its
sole cost and expense and participate in the defense of the Third
Party Claim, (B) the Indemnified Party will not consent to the
entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C) the
Indemnifying Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnified Party
(not to be withheld unreasonably).
(iv) In the event any of the conditions in Section 8(d)(ii) above is
or becomes unsatisfied, however, (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter
into any settlement with respect to, the Third Party Claim in any
manner it reasonably may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith), (B) the
Indemnifying Parties will reimburse the Indemnified Party
promptly and periodically for the costs of defending against the
Third Party Claim (including reasonable attorneys' fees and
expenses), and (C) the Indemnifying Parties will remain
responsible for any Adverse Consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim to the fullest
extent provided in this Section 8.
(e) Determination of Adverse Consequences. The Parties shall take into
account the time cost of money (using the Applicable Rate as the
discount rate) in determining indemnification amounts for Adverse
Consequences for purposes of this Section 8.
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(f) Recoupment Under Escrow Agreement. Notwithstanding any provision
herein to the contrary, except for fraud by the Shareholders,
Ramtron's sole remedy for any Adverse Consequences it may suffer shall
be recovery of the Escrowed Shares pursuant to the Escrow Agreement.
The number of Escrowed Shares to be recovered for any Adverse
Consequences shall be calculated by dividing the dollar amount of such
Adverse Consequences by the last sale price of Ramtron Common Stock on
the day immediately preceding the date of the determination of the
amount of Adverse Consequences.
(g) Waiver. Each of the Shareholders hereby agrees that he or she will not
make any claim for indemnification against Mushkin by reason of the
fact that he or she was a director, officer, employee, or agent of
Mushkin or was serving at the request of Mushkin as a partner,
trustee, director, officer, employee, or agent of another entity
(whether such claim is for judgments, damages, penalties, fines,
costs, amounts paid in settlement, losses, expenses, or otherwise and
whether such claim is pursuant to any statute, charter document,
bylaw, agreement, or otherwise) with respect to any action, suit,
proceeding, complaint, claim, or demand brought by Ramtron against
such Shareholder (whether such action, suit, proceeding, complaint,
claim, or demand is pursuant to this Agreement, applicable law, or
otherwise).
9. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) Ramtron, Mushkin and the Shareholders may terminate this
Agreement by their mutual written consent at any time prior to
the Closing;
(ii) Ramtron may terminate this Agreement by giving written notice to
the Shareholders at any time prior to the Closing (A) in the
event either of the Shareholders has breached any material
representation, warranty, or covenant contained in this Agreement
in any material respect, Ramtron has notified the Shareholders of
the breach, and the breach has continued without cure for a
period of 10 days after the notice of breach, or (B) if the
Closing shall not have occurred on or before June 9, 2000, by
reason of the failure of any condition precedent under Section
7(a) hereof (unless the failure results primarily from Ramtron
itself breaching any representation, warranty, or covenant
contained in this Agreement); and
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(iii) Mushkin and the Shareholders may terminate this Agreement by
giving written notice to Ramtron at any time prior to the Closing
(A) in the event Ramtron has breached any material
representation, warranty, or covenant contained in this Agreement
in any material respect, Mushkin or the Shareholders have
notified Ramtron of the breach, and the breach has continued
without cure for a period of 10 days after the notice of breach
or (B) if the Closing shall not have occurred on or before
June 9, 2000, by reason of the failure of any condition precedent
under Section 7(b) hereof (unless the failure results primarily
from any of Mushkin or the Shareholders themselves breaching any
representation, warranty, or covenant contained in this
Agreement).
(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any
other Party (except for any liability of any Party then in breach).
10. Miscellaneous.
(a) Nature of Certain Obligations. The covenants of each of the
Shareholders in this Agreement are joint and several obligations. This
means that each Shareholder will be responsible to the extent provided
in Section 8 above for the entirety of any Adverse Consequences
Ramtron may suffer as a result of any breach thereof.
(b) Further Action, Reasonable Efforts. Upon the terms and subject to the
conditions hereof, each of the parties hereto shall use commercially
reasonable efforts to (i) promptly make its respective filings, and
thereafter make any other required submissions, under any applicable
governmental law or regulation with respect to the transactions
contemplated hereby, and (ii) take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the Merger and related transactions
in the most expeditious manner practicable, including using
commercially reasonable efforts to obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of
governmental entities, making all filings and required submissions
with governmental entities, obtaining all consents and approvals from
third parties to contracts as are necessary for the consummation of
the Merger and related transactions and defending any lawsuit or legal
challenges, whether judicial or administrative, challenging this
Agreement or the transactions contemplated hereby. In case at any time
after the Effective Time any other action is necessary or desirable to
carry out the purposes of this Agreement, each party to this Agreement
shall use their reasonable efforts to take all such action.
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(c) Good Faith Performance. Without limiting any covenant or agreement
herein, each party shall use reasonable commercial efforts not to take
any action, or enter into any transaction, which would result in a
breach of any covenant made by such party in this Agreement, or cause
any representation or warranty to be or become untrue.
(d) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior
written approval of Ramtron and the Shareholders; provided, however,
that any Party may make any public disclosure it believes in good
faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its good faith efforts to advise the other
Parties prior to making the disclosure).
(e) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(f) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by
or among the Parties, written or oral, to the extent they related in
any way to the subject matter hereof.
(g) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this
Agreement or any of his or its rights, interests, or obligations
hereunder without the prior written approval of Ramtron and the
Shareholders.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
(i) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(j) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given (i) if (and then two business days after) it is sent by
registered or certified mail, return receipt requested, postage
prepaid, or (ii) if (and then one business day after) it is sent via a
nationally recognized overnight courier service and, in either case,
addressed to the intended recipient as set forth below:
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If to Mushkin or the Shareholders:
376 Ogden Street
Denver, CO 80218
fax: 303-282-7707
Copy to:
Ben Sparks
Sparks Willson Borges Brandt & Johnson, P.C.,
128 S. Tejon, Suite 300
Colorado Springs, CO 80903
fax: 719-632-2017
If to Ramtron:
Ramtron International Corporation
1850 Ramtron Drive
Colorado Springs, CO 80921
attn: President
fax: (719) 481-9294
Copy to:
John A. St. Clair
Coudert Brothers
950 Seventeenth Street, Suite 1800
Denver, CO 80202
fax: (303) 607-1080
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
messenger service, fax, telex, ordinary mail, or electronic mail), but
no such notice, request, demand, claim, or other communication shall
be deemed to have been duly given unless and until it actually is
received by the intended recipient. Any Party may change the address
to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in
the manner herein set forth.
(k) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Colorado without
giving effect to any choice or conflict of law provision or rule.
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(l) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and
signed by all Parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(m) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
(n) Expenses. Each of the Parties will bear his, her or its own costs and
expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. Mushkin
may pay on or after the Closing Date the fees of Sparks Willson Borges
Brandt and Johnson, P.C. incurred prior to the Closing in connection
with this transaction up to a limit of $35,000.
(o) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference
to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated there
under, unless the context requires otherwise. The word "including"
shall mean including without limitation. The Parties intend that each
representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any respect,
the fact that there exists another representation, warranty, or
covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall
not detract from or mitigate the fact that the Party is in breach of
the first representation, warranty, or covenant.
(p) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
(q) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Denver, Colorado
in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court. Each of the
Parties waives any defense of inconvenient forum to the maintenance of
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any action or proceeding so brought and waives any bond, surety, or
other security that might be required of any other Party with respect
thereto. Any Party may make service on any other Party by sending or
delivering a copy of the process to the Party to be served at the
address and in the manner provided for the giving of notices in
Section 10(j). Nothing in this Section 10(q), however, shall affect
the right of any Party to bring suit in any other court of competent
jurisdiction or to serve legal process in any other manner permitted
by law or at equity.
(r) Spousal Consents. The Shareholders are a married couple, and each of
them hereby consents to the execution, delivery and performance by the
other Shareholder of this Agreement and each of the other documents to
be executed by such other Shareholder hereunder.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
RAMTRON: RAMTRON INTERNATIONAL CORPORATION
By /S/ L. David Sikes
----------------------
Name: L. David Sikes
Title: Chairman and CEO
RAMTRON SUB: RIC MI ACQUISTION INC.
By /S/ L. David Sikes
----------------------
Name: L. David Sikes
Title: Chief Executive Officer
MUSHKIN: MUSHKIN, INC.
By /S/ William M. Mushkin
-------------------------
Name: William M. Mushkin
Title: President
SHAREHOLDERS: By /S/ William Michael Mushkin
-------------------------------
William Michael Mushkin
By /S/ Elizabeth Loring Crane
-------------------------------
Elizabeth Loring Crane
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EXHIBIT A
ARTICLES OF MERGER OF
RIC MI ACQUISITION INC.
INTO
MUSHKIN INC.
Pursuant to C.R.S. Section 7-111-105, the undersigned corporations, desiring to
effect a merger, set forth the following facts:
ARTICLE I
The names of the merging corporations are Mushkin Inc., a domestic corporation,
incorporated in the State of Colorado on July 25, 1996, and RIC MI Acquisition
Inc., a domestic corporation, incorporated in the State of Colorado on May 10,
2000. The name of the surviving corporation is Mushkin Inc.
ARTICLE II
The Plan of Merger, containing the information required by C.R.S. Section
7-111-101, is set forth in Exhibit 1, which is attached hereto and made a part
hereof.
ARTICLE III
The Plan of Merger was unanimously adopted by the board of directors of Mushkin
Inc. and, upon the board of directors' recommendation of the Plan of Merger to
the shareholders of Mushkin Inc., such plan was duly approved by a unanimous
vote of all of Mushkin Inc.'s shareholders
ARTICLE IV
The Plan of Merger was unanimously adopted by the board of directors of RIC MI
Acquisition Inc. and, upon the board of directors' recommendation of the Plan
of Merger to the shareholders of RIC MI Acquisition Inc., such plan was duly
approved by the vote of RIC MI Acquisition Inc.'s sole shareholder.
ARTICLE V
These Articles of Merger will be effective upon filing.
MUSHKIN INC.
By: /S/ William M. Mushkin
---------------------------
Willliam M. Mushkin
President Dated: June 14, 2000
RIC MI ACQUISITION INC.
By: /S/ L. David Sikes
---------------------------
Chief Executive Officer Dated: June 14, 2000
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Exhibit 1
PLAN OF MERGER
BETWEEN
RIC MI ACQUISITION INC.
AND
MUSHKIN INC.
1. Parties to the Merger. Upon the Effective Time (as described below), RIC
MI Acquisition Inc. ("RMAI"), a wholly-owned subsidiary of Ramtron
International Corporation ("Ramtron"), shall be merged with and into Mushkin
Inc. ("Mushkin"), RMAI's separate corporate existence shall cease and Mushkin
shall continue as the surviving corporation (the "Merger"). Mushkin, as the
surviving corporation after the Merger, is hereinafter sometimes referred to as
the "Surviving Corporation."
2. Terms and Conditions of the Merger.
a. The Merger shall become effective on such date as the Articles of
Merger are filed with the Secretary of State for the State of Colorado
(or such later time as may be agreed in writing by Mushkin and Ramtron
and specified in the Articles of Merger) (the "Effective Time").
b. At the Effective Time, all the property, rights, powers, privileges,
powers and franchises of Mushkin and RMAI shall vest in the Surviving
Corporation, and all the debts, liabilities and duties of Mushkin and
RMAI shall become the debts, liabilities and duties of the Surviving
Corporation.
c. At the Effective Time, the Articles of Incorporation, Bylaws, directors
and officers of RMAI, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation, Bylaws, directors and
officers of the Surviving Corporation until thereafter amended or
changed as provided by law; provided, however, that at the Effective
Time, Article 1 of the Articles of Incorporation of the Surviving
Corporation shall be amended to read: "The name of the corporation is
Mushkin Inc."
3. Conversion of Shares. At the Effective Time, by virtue of the Merger and
without any action on the part of RMAI, Mushkin or the holders of any of the
following securities:
a. Each share of common stock, no par value per share, of Mushkin
("Mushkin Common Stock") issued and outstanding immediately prior to
the Effective Time will be canceled and extinguished and automatically
converted (upon surrender of the certificates representing such shares
of Mushkin Common Stock) into the right to receive 467.343 shares of
common stock, par value $0.01 per share, of Ramtron ("Ramtron Common
Stock").
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b. Each share of common stock, $0.01 par value per share, of RMAI issued
and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share
of common stock, $0.01 par value per share, of the Surviving
Corporation. Each certificate evidencing ownership of shares of the
common stock of RMAI shall evidence ownership of such shares of capital
stock of the Surviving Corporation at and after the Effective Time.
c. No fraction of a share of Ramtron Common Stock will be issued by virtue
of the Merger, but in lieu thereof each holder of shares of Mushkin
Common Stock who would otherwise be entitled to a fraction of a share
of Ramtron Common Stock (after aggregating all fractional shares of
Ramtron Common Stock that otherwise would be received by such holder)
shall receive from Ramtron an amount of cash (rounded to the nearest
whole cent) equal to the product of (i) such fraction, multiplied by
(ii) the average of all of the last sales prices of Ramtron's Common
Stock as reported on the NASDAQ SmallCapMarket for the five (5) prior
trading days.
4. Amendments to Articles of Incorporation. The amendments to the Articles of
Incorporation of the Surviving Corporation shall be as stated in Section 2(c)
above.
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EXHIBIT B
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is dated as of May 14, 2000, by and among William Michael
Mushkin and Elizabeth Loring Crane as pledgors (the "Shareholders"), Ramtron
International Corporation, a Delaware corporation as pledgee ("Ramtron") and US
Bank National Association as escrow agent (the "Agent").
Recitals
The Shareholders and Ramtron are parties to an Agreement and Plan of Merger
dated as of May 11, 2000 (the "Merger Agreement"), providing for the merger of
a wholly owned subsidiary of Ramtron with Mushkin Inc., a Colorado corporation
owned by the Shareholders.
Pursuant to the Merger Agreement, Shareholders have received 952,380 shares of
Ramtron's Common Stock, and Shareholders have agreed to secure certain
indemnification obligations under the Merger Agreement with 95,238 of such
shares (the "Escrowed Shares").
NOW THEREFORE, in consideration of the foregoing recitals and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Shareholders and Ramtron agree as follows:
1. Pledge
As security of the satisfaction by the Shareholders of their obligations under
the indemnification provisions of Section 8 of the Merger Agreement in full,
the Shareholders hereby pledge, assign, hypothecate and deliver to Ramtron and
grant to Ramtron a first priority and duly perfected security interest in the
Escrowed Shares and any certificates therefor, and, subject to Section 4
hereof, all cash, securities and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Escrowed Shares (the Escrowed Shares and all such
certificates, cash, securities, instruments and other property are referred to
collectively herein as the "Escrowed Collateral").
2. Procedures for Claims and Resolution of Disputes
(a) Escrowed Shares. Ramtron has delivered to Agent as escrow agent for
the Shareholders and Ramtron all certificates evidencing the
Shareholders' ownership of the Escrowed Shares, accompanied by
instruments of transfer duly executed in blank by the Shareholders. At
any time or times prior to one year from the date of this Agreement
(the "Expiration Date") Ramtron may make claims against the Escrowed
Collateral for amounts due for indemnification under Article 8 of the
Merger Agreement. Ramtron shall notify the Shareholders and the
Escrow Agent in writing of each such claim ("Notice of Claim"),
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including a brief description of the amount and nature of such claim.
If the amount subject to the claim is unliquidated, Ramtron shall make
a good faith estimate as to the amount of the claim for purposes of
determining the number of Escrow Shares and amount of other Escrowed
Collateral, if any, to be withheld by the Escrow Agent if such claim
is not resolved or otherwise adjudicated by the Expiration Date. Such
good faith estimate shall be included in the Notice of Claim. If the
Shareholders shall dispute a claim or Ramtron's estimate as to the
amount of the claim, the Shareholders shall give written notice
thereof to Ramtron and to the Escrow Agent within 30 days after the
date Ramtron's Notice of Claim was received by the Shareholders, in
which case the Escrow Agent shall continue to hold the Escrowed
Collateral in accordance with the terms of this Agreement; otherwise,
such liquidated claim shall be deemed to have been acknowledged to be
payable out of the Escrowed Collateral in the full amount thereof as
set forth in the Notice of Claim and the Escrow Agent shall use its
best efforts to pay such liquidated claim from the Escrowed Collateral
to Ramtron within three business days after expiration of said 30-day
period. Unliquidated claims shall not be paid by the Escrow Agent
until liquidated, but the Set Aside Amount (as defined below) shall be
reserved for payment upon such liquidation. Disputes as to Ramtron's
good faith estimate of a claim shall be resolved as provided below.
The value of Escrowed Collateral paid to satisfy a claim under this
Agreement shall be allocated pro rata among the Shareholders based on
their proportionate interests in the aggregate Escrowed Collateral.
With respect to each Shareholder, the amount paid to satisfy a claim
under this Agreement shall be deducted from the Escrowed Collateral
allocable to such Shareholder. If the amount of the claim exceeds the
aggregate value of the Escrowed Collateral subject thereto, the Escrow
Agent shall have no liability or responsibility for any deficiency.
(b) Payment of Escrowed Shares. The Escrow Agent shall effect the payment
of Escrowed Shares to Ramtron by surrendering such Escrowed Shares to
Ramtron's stock transfer agent for cancellation upon receipt by the
transfer agent of a copy of a letter from Ramtron to transfer agent,
instructing transfer agent to issue a new certificate to the Escrow
Agent for the remaining Escrowed Shares after giving effect to such
payment. The value per share of the Escrowed Shares for purposes of
this Agreement shall as set forth in Section 8 of the Merger
Agreement. All claims paid out of the Escrowed Shares shall be rounded
to the nearest whole share. The Escrow Agent shall not be responsible
for and shall have no liability in connection with determining whether
the transfer of any Escrowed Shares or other Escrowed Collateral
complies with federal or state securities laws.
(c) Dispute of Claims. If the Shareholders shall give notice to Ramtron
and the Escrow Agent pursuant to Section 2(a)disputing a Ramtron
claim, no distribution of the Escrowed Collateral shall be made by the
Escrow Agent to Ramtron or to the Shareholders of the Set Aside Amount
(as defined in below) with respect to such claim until either:
(i) such disputed claim has been resolved as evidenced by a written
notice executed by Ramtron and the Shareholders instructing the Escrow
Agent as to the distribution of such Set Aside Amount or a portion
thereof; or (ii) such dispute shall have been adjudicated in
accordance with the arbitration procedures described below.
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(d) Resolution Procedures. If the Shareholders shall dispute an
indemnification claim of Ramtron as provided in Section 2(a), the
Escrow Agent shall set aside a portion of the Escrowed Collateral
equal to the amount of the claim as set forth in the Notice of Claim
(the "Set Aside Amount"), which amount may subsequently be modified by
arbitration. If the Shareholders shall dispute the Set Aside Amount
as provided in Section 2(a), the Escrowed Collateral constituting the
Set Aside Amount shall be withheld pursuant to the immediately
preceding sentence until otherwise determined by arbitration. The Set
Aside Amount shall be allocated pro rata among the Shareholders based
upon their percentage interests in the aggregate Escrowed Collateral.
With respect to each Shareholder, the amount constituting the Set
Aside Amount shall be deducted, to the extent necessary, from the
Escrowed Collateral allocable to such Shareholder. In the event
Ramtron notifies the Escrow Agent in writing that it has made out-of-
pocket expenditures or anticipates that it will incur legal expenses
in connection with any such disputed claim with respect to which it is
entitled to be indemnified under the Merger Agreement, a portion of
the Escrowed Collateral equal to such reasonable incurred or
anticipated expenditures shall also be set aside and added to and
become a part of the Set Aside Amount; provided, that in the event
that it shall be agreed (as evidenced by a written notice executed by
Ramtron and the Shareholders) or determined through an arbitration
proceeding described in Section 2(e) that Ramtron is not entitled to
indemnification with respect to such claim or such expenses, Ramtron
shall not be entitled to the portion of the Escrowed Collateral set
aside for such expenses.
(e) Arbitration. If, within 60 days after either of the Shareholders
sends notice of a dispute, the Escrow Agent has not received written
notice executed by Ramtron and the Shareholders to the effect that the
disputed indemnification claim has been resolved, the indemnification
claim shall be referred to an arbitrator chosen by agreement of the
Shareholders and Ramtron. If no agreement is reached regarding
selection of the arbitrator within 30 days after written request from
either party to the other, Ramtron or the Shareholders may submit the
matter in dispute to the Judicial Arbitration and Mediation Service,
to be settled by arbitration in Colorado Springs, CO in accordance
with the commercial arbitration rules of such association. Ramtron
and the Shareholders agree to act in good faith to select mutually an
arbitrator. The fees and expenses of any arbitration shall be borne
equally by the Shareholders as a group and Ramtron, unless and until
the arbitrator determines otherwise. Any fees or expenses
attributable to the Shareholders as a group shall be payable only out
of the Escrowed Collateral. In no event shall the Escrow Agent be
responsible for any fees or expenses of any party to any arbitration
proceedings. The determination of the arbitrator as to the amount, if
any, of the indemnification claim that is properly allowable shall be
conclusive and binding upon the parties hereto and judgment may be
entered thereon in any court having jurisdiction thereof, including,
without limitation, any court in the State of Colorado. The Escrow
Agent shall make payments of such claim, as and to the extent allowed,
to Ramtron within three business days following its receipt of a copy
of the arbitration award determination.
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3. Disposal of Escrowed Collateral
The Shareholders may not sell or otherwise transfer the Escrowed Collateral
except with the express written consent of Ramtron, and any permitted
purchaser's or transferee's right, title and interest in such shares shall be
subject to the rights of the Agent and Ramtron hereunder.
4. Voting, Dividends and Other Payments
(a) Except with respect to any portion of the Escrowed Collateral that has
been released to Ramtron pursuant to Section 2:
(i) each Shareholder shall be entitled to exercise any and all voting
and/or consensual rights and powers relating or pertaining to
such Escrowed Collateral pledged by it or any part thereof for
any purpose not inconsistent with the terms hereof;
(ii) the Agent shall execute and deliver (or cause to be executed and
delivered) to each Shareholder all such proxies, powers of
attorney, dividend orders and other instruments as the
Shareholder may reasonably request for the purpose of enabling
the Shareholder to exercise the voting and/or consensual rights
and powers which it is entitled to exercise pursuant to paragraph
(i) above;
(iii) each Shareholder shall be entitled to receive dividends made in
the ordinary course of business on the Escrowed Shares; and
(iv) any and all stock or liquidating dividends, distributions in
property, returns of capital or other distributions and payments
made on or in respect of the Escrowed Collateral, whether
resulting from a subdivision, combination or reclassification of
the outstanding Escrowed Collateral or received in exchange
therefor or for any part thereof or as a result of any merger,
consolidation, acquisition or other exchange of assets to which
any such issuer may be a party or otherwise, and any and all cash
and other property received in exchange for or redemption of any
Escrowed Collateral shall be and become part of the Escrowed
Collateral and, if received by a Shareholder, shall be held in
trust by such Shareholder for the benefit of Ramtron and shall
forthwith be delivered by the Shareholder to the Agent
(registered in the name of the Agent, or accompanied by proper
instruments of assignment executed by the Shareholder, in
accordance with the Agent's instructions) to be held subject to
the terms hereof. Any and all money and other property paid over
to or received by Ramtron pursuant to the provisions of this
subsection (a)(iv) shall be retained by the Agent as part of the
Escrowed Collateral and be applied in accordance with the
provisions hereof.
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(b) With respect to any Escrowed Collateral released to Ramtron, all
rights of the Shareholders to exercise the voting and/or consensual
rights and powers which it is entitled to exercise pursuant to
Section 4(a)(i) shall cease, and all such rights shall thereupon
become vested in Ramtron, who shall have the sole and exclusive right
and authority to exercise such voting and/or consensual rights and
powers. With respect to any Escrowed Collateral released to Ramtron
(and until any claim for indemnification pursuant to Section 8 of the
Merger Agreement shall have been paid in full) Ramtron shall be
entitled to receive dividends made in the ordinary course of business
on the Escrowed Collateral included in such Set Aside Amount, which
dividends shall be held as additional collateral hereunder.
5. Representations, Warranties and Covenants
Each of the Shareholders represents and warrants to, and covenants with,
Ramtron as follows:
(a) that the Escrowed Shares of such Shareholder are duly authorized,
validly issued, fully paid and owned by such Shareholder of record and
beneficially, free and clear of any lien, claim, restriction upon
transfer (other than pursuant to the applicable securities laws) or
upon voting, option, charge, security interest or other encumbrance
("Lien") thereon or affecting the title thereto ;
(b) that such Shareholder has legal title and good right and lawful
authority to pledge, assign and deliver the Escrowed Shares; and
(c) that such Shareholder will not create, assume or suffer to exist any
Lien on the Escrowed Collateral other than pursuant to this Agreement.
6. Application of Escrowed Collateral
The value pursuant to Section 8 of the Merger Agreement of any Escrowed
Collateral released to Ramtron hereunder shall be applied as follows:
First: to the payment of the costs and expenses of the Agent and the
reasonable fees and out-of-pocket expenses of counsel employed by
the Agent in connection with the claim;
Second: to Ramtron to satisfy the amount due under Section 8 of the
Merger Agreement; and
Third: the balance (if any) of such proceeds shall be held by the Agent
as a part of the Escrowed Collateral in the manner provided in
Section 4(a)(iv).
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7. Release
The Shareholders shall be discharged from their obligations hereunder, the
security granted to Ramtron shall be immediately released and this Agreement
shall terminate upon the termination of the provisions of Section 8 of the
Merger Agreement. Escrow Agent shall release to the shareholders on the
Expiration Date all Escrowed Collateral that has not been released to Ramtron
or is not a Set Aside Amount. Each Shareholder understands and acknowledges
that neither the Agent nor Ramtron shall have an obligation to release any of
the Escrowed Collateral to either Shareholder until the time of such discharge.
8. Further Assurances; Negative Covenant
(a) Each Shareholder agrees to do such further acts and things, and to
execute and deliver such additional conveyances, assignments, agreements and
instruments, as the Agent or Ramtron may at any time reasonably request in
connection with the administration or enforcement of this Agreement or related
to the Escrowed Collateral or any part thereof or in order better to assure and
confirm unto the Agent and Ramtron their rights, powers and remedies hereunder.
Each Shareholder hereby irrevocably appoints the Agent as its attorney-in-fact,
with full authority in the place and stead of the Shareholder, and in the name
of the Shareholder or otherwise, to perform, or cause performance of, any
agreement of such Shareholder contained herein which such Shareholder fails to
perform. Each Shareholder agrees to indemnify the Agent for any claims,
losses, liabilities and expenses reasonably incurred by it in connection with
the Agent's exercise of the foregoing power of attorney.
(b) The Agent agrees to do such further acts and things and to execute and
deliver such documents as either Shareholder may reasonably request in order to
effect the discharge and release referred to in Section 8 above.
9. Notices
All notices, requests, demands, claims, and other communications hereunder will
be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly given (i) if (and then two business days after)
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or (ii) if (and then one business day after) it is sent via a
nationally recognized overnight courier service and, in either case, addressed
to the intended recipient as set forth below:
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If to the Shareholders:
376 Ogden Street
Denver, CO 80218
fax: 303-282-7707
Copy to:
Ben Sparks
Sparks Willson Borges Brandt & Johnson, P.C.,
128 S. Tejon, Suite 300
Colorado Springs, CO 80903
fax: 719-632-2017
If to Ramtron:
Ramtron International Corporation
1850 Ramtron Drive
Colorado Springs, CO 80921
attn: President
fax: (719) 481-9294
Copy to:
John A. St. Clair
Coudert Brothers
950 Seventeenth Street, Suite 1800
Denver, CO 80202
fax: (303) 607-1080
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, messenger service, fax, telex,
ordinary mail, or electronic mail), but no such notice, request, demand, claim,
or other communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.
10. Expenses
Ramtron agrees to reimburse the Agent for all reasonable attorneys' fees and
expenses and all other reasonable expenses in connection with the enforcement
of the rights of the Agent hereunder.
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11. Agent
(a) Ramtron hereby appoints the Agent to act as its agent as herein
specified and irrevocably authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and to exercise such
powers hereunder as are specifically delegated to the Agent and such
powers as are reasonably incidental thereto. In performing its
functions hereunder the Agent shall act solely as the agent of Ramtron
and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for
either Shareholder.
(b) The Agent shall not be liable for any action taken or omitted by it
hereunder, or in connection herewith, except for its gross negligence
or willful misconduct. Ramtron agrees to indemnify and hold the Agent
harmless from and against any and all liabilities, damages, penalties,
judgments, suits, expenses and other costs of any kind or nature
whatsoever imposed on, incurred by or asserted against the Agent in
respect of its obligations hereunder, except for its gross negligence
or willful misconduct; provided, however, that this subsection 11(b)
shall not be construed to limit or eliminate any obligations of
Ramtron hereunder.
(c) The Agent shall be entitled to rely upon any communication or document
believed by it to be genuine and correct and to have been signed, sent
or made by the proper person or persons and to act upon the advice of
legal counsel and other experts selected by it concerning all matters
pertaining to this Agreement and its duties hereunder, and shall not
be liable to any of the other parties hereto for any of the
consequences of such reliance.
(d) The Agent may, without liability to account, engage in any kind of
business with Ramtron as if it were not the Agent.
(e) Ramtron shall make payment in immediately available funds to the Agent
for any amounts due from Ramtron to the Agent (whether for its own
account of for the account of Ramtron) hereunder by delivery to the
Agent or to the account of the Agent specified by the Agent at such
bank in such city as the Agent shall designate by notice to Ramtron
from time to time. Any such payments shall be made within 30 days of
the date of the Agent's written notice to Ramtron of the amount due
hereunder.
(f) Determinations made by the Agent and contained in notices from the
Agent to either of the Shareholders or Ramtron shall be conclusive and
binding on the Shareholders and Ramtron, absent manifest error in
computation or transmission.
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(g) The Agent, by giving written notice thereof to the Shareholders and
Ramtron, may resign and designate as a successor Agent hereunder any
legal entity controlled by an affiliate of the Agent. Upon the
designation of a successor Agent and upon the acceptance by such
successor Agent of its appointment, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder. After
any such designation, resignation or removal hereunder as Agent, the
provisions of this Section 11 and of Section 12 shall continue in
effect for the benefit of the retiring Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent
hereunder.
12. Miscellaneous
Neither this Agreement nor any provision hereof may be amended, modified,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the amendment, modification,
waiver, discharge or termination is sought. The provisions of this Agreement
shall be binding upon the successors and assigns of each of the parties hereto.
The captions in this Agreement are for convenience of reference only and shall
not define or limit the provisions hereof. This Agreement shall be construed
in accordance with and governed by the laws of the State of Colorado.
13. Counterparts
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
/S/ William Michael Mushkin /S/ Elizabeth Loring Crane
----------------------------- ----------------------------
William Michael Mushkin Elizabeth Loring Crane
RAMTRON INTERNATIONAL US BANK NATIONAL ASSOCIATION
CORPORATION
By /S/ L. David Sikes By /S/ Adam M. Dalmy
---------------------- ----------------------
Name: L. David Sikes Name: Adam M. Dalmy
Title: CEO Title: Vice President
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EXHIBIT C
LOCK-UP AGREEMENT
This Lock-Up Agreement (the "Agreement") is made and entered into as of May 14,
2000, by and among RAMTRON INTERNATIONAL CORPORATION, a Delaware corporation
("Ramtron"), and WILLIAM MICHAEL MUSHKIN and ELIZABETH LORING CRANE, each an
individual resident of Denver, Colorado (each a Shareholder and collectively,
the "Shareholders"). Ramtron and the Shareholders are referred to collectively
herein as the "Parties." Capitalized terms not defined herein shall have the
meaning given to them in the Merger Agreement (as defined below).
RECITALS
In connection with the Merger Agreement of this date (the "Merger Agreement")
between the Parties and Mushkin Inc., a Colorado corporation ("Mushkin") and
RIC MI ACQUISITION, INC., a Colorado Corporation ("Ramtron Sub"), the Parties
desire to restrict as provided herein the sale or transfer of the Ramtron
Shares issued to the Shareholders under and pursuant to the Merger Agreement.
AGREEMENT
For good and valuable consideration, the Parties hereby agree as follows:
1. Restriction on Transfer. A Shareholder shall not be permitted to
transfer, assign, hypothecate, encumber, pledge or otherwise alienate
(hereinafter "transfer") the Ramtron Shares except in accordance with
subsections (a) and (b) below, respectively, and in all respects subject to
compliance with state and federal securities laws,:
(a) With respect to the 476,190 Unrestricted Shares, the Shareholders
cumulatively shall be permitted to transfer the following amounts:
Dates Unrestricted Shares Permitted to Transfer
=============================================================================
After Closing Date and 40% being 190,476 shares
Prior to 90 days after the
Closing Date, or thereafter.
=============================================================================
90 days after the Closing Date Additional 30% 142,857 being shares
to 180 Days after the Closing (for a total of 70%) being a total of
Date, or thereafter. 333,333 shares
=============================================================================
After 180 days after the Additional 30% 142,857 being shares
Closing Date (for a total of 100% being a total of
476,190 shares
=============================================================================
(b) With respect to the 476,190 Restricted Shares, the Shareholder shall
be permitted to transfer the following amounts:
Dates Restricted Shares Permitted to Transfer
=============================================================================
From and after the first 33.33% being 158,730 shares.
anniversary of the Closing
Date to the second anniversary
of the Closing Date, or
==============================================================================
From and after the second Additional 33.33% being 158,730 shares
anniversary of the Closing (for a total of 66.66%) being a total
Date to the third anniversary of 317,460 shares.
of the Closing Date, or
thereafter.
==============================================================================
After the third anniversary Additional 33.34% being 158,730 shares
of the Closing Date (for a total of 100%) being 476,190
shares.
==============================================================================
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Any attempt to transfer any Ramtron Shares or any rights therein in violation
of this Lock-Up Agreement shall be null and void ab initio and Ramtron shall
not register or recognize for any purpose any such attempted transfer.
2. Certain Gifts Exempt. Notwithstanding Section 1 above, a Shareholder may
make a gift of shares of Ramtron to his or her spouse, issue, other members of
his or her immediate family, or to a United States trust for the benefit only
of such shareholder, spouse, issue or other members (collectively, the
"Permitted Transferees"), without complying with the provisions of this
Agreement, provided that the transferee is (i) a resident of the United States
and (ii) agrees in writing prior to the transfer to be subject to the
provisions of this Agreement.
3. termination. The restrictions imposed by this Agreement shall terminate
immediately upon (i) mutual consent of the parties, (ii) any reorganization,
merger or consolidation of Ramtron with any other corporation in which Ramtron
is not the surviving corporation, (iii) a sale of substantially all of
Ramtron's assets, (iv) a complete liquidation of Ramtron, or (v) a sale of at
least 80% of the outstanding stock of Ramtron (on an as converted to Common
basis) to a single purchaser or group of purchasers.
4. legends. Each certificate representing shares of Ramtron subject to this
Agreement shall bear the following legend (the "Lock-Up Legend"):
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN
LOCK-UP AGREEMENT BY AND BETWEEN THE STOCKHOLDER AND RAMTRON. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER UPON WRITTEN REQUEST TO THE
SECRETARY OF RAMTRON."
Upon request of a Shareholder, Ramtron shall promptly cause its transfer agent
to remove the Lock-Up Legend with respect to any shares not subject to Section
1 hereof and deliver an unlegended certificate to the requesting Shareholder
for such shares (and a legended certificate for any shares remaining subject to
Section 1) upon normal and appropriate surrender procedures of outstanding
certificates.
5. Miscellaneous.
5.1 Successors and Assigns. Except as otherwise provided herein, this
Agreement and the rights and obligations of the parties hereunder
shall inure to the benefit of, and be binding upon, the parties'
respective successors, assigns and legal representatives.
5.2 Amendments and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the Ramtron and a respective
Shareholder.
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5.3 Notices. Any notice required or permitted by this Agreement shall be
delivered in the manner provided in the Merger Agreement.
5.4 Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of
the State of Delaware, without giving effect to principles of
conflicts of law.
5.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
The parties have executed this Lock-up Agreement as of the date first written
above.
RAMTRON: RAMTRON INTERNATIONAL CORPORATION
By /S/ L. David Sikes
----------------------
Name: L. David Sikes
Title: CEO
SHAREHOLDERS: By /S/ William Michael Mushkin
-------------------------------
William Michael Mushkin
By /S/ Elizabeth Loring Crane
-------------------------------
Elizabeth Loring Crane
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EXHIBIT D
May 14, 2000
Mr. William Michael Mushkin
376 Ogden Street
Denver, Colorado 80218
Dear Mr. Mushkin:
I am pleased to confirm Mushkin, Inc.'s offer for the position of Vice
President of Mushkin, Inc.
The following are the essential points of our arrangement:
1. Your salary shall be $125,000.00 annually, paid semi-monthly.
2. A contract will be entered into between yourself and Ramtron (copy
attached); whereby Ramtron will pay your base salary through the contract
period if you leave involuntarily.
I very much look forward to your employment with Mushkin, Inc. and feel your
leadership will be significant in achieving our overall objectives.
Please sign and return one of the originals of this offer indicating your
acceptance of this offer.
Sincerely, I accept this offer.
/S/ L. David Sikes /S/ William Michael Mushkin
------------------------ ---------------------------
L. David Sikes William Michael Mushkin
Chairman and CEO
Enclosure
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May 14, 2000
Mr. William Michael Mushkin
376 Ogden Street
Denver, Colorado 80218
Dear Mr. Mushkin:
This letter agreement ("Agreement") sets forth our agreement to the terms of
your employment with Mushkin, Inc. (the "Company").
1. Term. The term of this Agreement shall begin on May 14, 2000 and shall
continue for a period of three years, unless sooner terminated as provided in
paragraph 2 below.
2. Termination. Should you voluntarily terminate your employment (other than
for Good Reason) or should your employment be terminated for cause, the Company
shall be relieved of all of its obligations provided herein including, but not
limited to, its obligation to pay you the salary provided in paragraph 3 below.
Termination for cause shall include:
(a) chronic absenteeism (not due to physical or mental illness, not
constituting permanent disability, habitual alcoholism, drug abuse or
addiction);
(b) the commission of a felony or fraud on the Company or any of its
affiliates or any of their respective employees, customers,
stockholders, or vendors;
(c) misappropriation of any money or other assets or properties of the
Company or any of its affiliates or any of their respective employees,
customers, stockholders or vendors;
(d) violation of reasonable, specific and lawful directions received from
the Company's Board of Directors and/or CEO, in connection with and
pertaining to your duties as Vice President of the Company; or
(e) the unauthorized disclosure or use of any trade secrets or financial
information or data belonging to the Company or any of its affiliates
which results, or is likely to result, in material injury or damage to
the Company or any of its affiliates.
"Good Reason" means that, without your written consent the Company
(a) reduces your base salary more than 10% without cause; (b)
significantly reduces your job authority or responsibility without
cause; or (c) requires you to move the location of your job, office,
or residence so that you will be based at a location more than twenty-
five miles from the Company's Denver location.
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Upon termination of this Agreement, you shall be paid your regular
salary and accrued vacation time, if any, up to the termination date
less applicable income tax withholdings and any other lawful offset
for charges or indebtedness which may be owed by you to the Company or
both. If the Company terminates your employment for any reason other
than cause during the term of this Agreement, or you resign for Good
Reason, then the Company shall be obligated to continue to pay you the
salary provided in paragraph 3 below until such term expires. IT IS
EXPRESSLY ACKNOWLEDGED AND UNDERSTOOD THAT YOUR EMPLOYMENT WITH THE
COMPANY IS AN EMPLOYMENT "AT WILL" SITUATION.
3. Salary. The salary to be paid by the Company to you shall be Ten Thousand
Four Hundred Sixteen Dollars and Sixty Seven Cents ($10,416.67) per month
($125,000.00 per annum), which amount shall be paid in equal installments on or
about the 15th and 30th of each month. All such payments shall be subject to
withholding and other applicable taxes.
4. Benefits. You will be entitled to receive benefits, including health
insurance, life insurance, disability insurance, vacation time and
participation in employee stock option plans in accordance with the policies of
Ramtron International Corporation ("Ramtron") from time to time. In addition,
you shall be granted, subject to board approval, an incentive stock option to
purchase Twenty Thousand (20,000) shares of Common Stock under Ramtron's
Employee Stock Option Plan and Ramtron's standard Employee Stock Option
Agreement, copies of which Ramtron has delivered to you in the forms attached
hereto as Attachments 1 and 2, respectively. The Employee Stock Option
Agreement will provide for an exercise price to be determined by Ramtron's
Board at the time of such Board's approval and grant of the incentive stock
option and that such option shall vest annually from the date of this Agreement
in equal amounts over four years. Management will recommend approval of the
option to Ramtron's Board. For eligibility and participation in Ramtron's
benefit plans your date of employment will be considered the date you started
for the Company.
5. Ownership of Documents, Patents and Copyrights. Any documents, inventions
or copyrightable material that you may prepare while employed by the Company
shall be subject to the non-disclosure and assignment requirements provided in
the Invention and Non-Disclosure Agreement between you and the Company dated
the date hereof in the form of Attachment 3 hereto. The termination or
expiration of this Agreement shall have no affect on your duties and
obligations as provided in said Invention and Non-Disclosure Agreement.
6. Change of Ownership. If during the term of this contract, a change of
ownership (defined as the sale or transfer of more than 50% of the assets or
stock to a single new owner) of Ramtron, Enhanced Memory Systems, Inc. ("EMS")
or the Company occurs and your employment hereunder is not continued (or an
equivalent job is not offered to you with the new entity), then you shall be
entitled to a severance package that would include:
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Your salary until departure date
Any unpaid expense reimbursement
Accrued vacation pay
One year's salary to be paid in one lump sum or
monthly over 12 months at the discretion of the Company
7. Arbitration. Should any dispute arise under this Agreement or out of its
termination or cancellation, the matter shall be submitted to and decided by
arbitration. The arbitration shall be held at a mutually agreeable location
within the State of Colorado and shall be held in accordance with the terms and
conditions outlined in the Colorado Uniform Arbitration Act, C.R.S. Section 13-
22-201.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
9. Severability. In case any one or more of the provisions of this Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected thereby.
10. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon your successors, assigns and legal
representatives and the successors and assigns of the Company. Neither party
may assign, transfer, pledge, encumber or otherwise dispose of this Agreement
or any rights or obligations hereunder, and any such attempt at delegation or
disposition shall be null and void and without effect; except that the Company
may assign or transfer this Agreement or any rights or obligations hereunder,
to either Ramtron or EMS.
11. Complete Agreement; Modification; Waiver. This Agreement constitutes the
complete agreement and understanding between the parties with respect to the
subject matter hereof. This Agreement shall not be altered, modified or
amended except by written instruments signed by each of the parties hereto.
Waivers of any provision contained herein or any default hereunder shall only
be effective if in writing and signed by the party to be charged therewith.
Any written waiver shall not operate or be construed as a waiver of any or
other subsequent breach or default by any party.
Please indicate your agreement to the foregoing by signing below.
Sincerely,
/S/ L. David Sikes
L. David Sikes
Chairman and CEO
This Agreement is hereby agreed to and accepted, effective as of May 14, 2000.
/S/ William Michael Mushkin June 14, 2000
------------------------------ -----------------
William Michael Mushkin Date
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EXHIBIT E
SPARKS WILLSON BORGES BRANDT & JOHNSON, P.C.
Attorneys at Law
R. KENNETH SPARKS 128 South Tejon, Suite 304 DAVID P. STEIGERWALD
ROBERT M. WILLSON Post Office Box 1678 JENNIFER M. STOKLEY
KENT H. BORGES Colorado Springs, Colorado 80901 STEPHEN A. HESS
BEN SPARKS MICHELE B. FAGIN
CHRISTOPHER M. BRANDT Telephone: (719) 475-0097
SCOTT W. JOHNSON Facsimile: (719) 633-8477
MARK A. MINICH Website: www.sparkswillson.com
TIMOTHY V. DIX DALE B. HALLING, Of Counsel
Of Counsel Registered Patent Attorney
June 14, 2000
Ramtron International Corporation
1850 Ramtron Drive
Colorado Springs, CO 80921
Gentlemen and Ladies:
We are counsel to WILLIAM MICHAEL MUSHKIN and ELIZABETH LORING CRANE (the
"Shareholders") and MUSHKIN INC., a Colorado corporation ("Mushkin"), in
connection with the Merger Agreement entered into May 11, 2000 (the "Merger
Agreement"), by and among the Shareholders, Mushkin, RAMTRON INTERNATIONAL
CORPORATION, a Delaware corporation ("Ramtron") and RIC MI ACQUISITION, INC.
CORPORATION, a Colorado corporation and wholly-owned subsidiary of Ramtron
("Ramtron Sub). This opinion is being delivered to you pursuant to Section
7(a)(viii) of the Merger Agreement. Unless otherwise indicated, all terms used
herein which are defined in the Merger Agreement shall have the respective
meanings given to them in the Merger Agreement.
In connection with this opinion we have examined the following;
1. The Merger Agreement and the documents to be delivered in connection
therewith;
2. The Due Diligence Materials;
3. A Certificate of the Shareholders dated as of the date of this opinion, a
copy of which is attached hereto.
In rendering our opinions herein we have, with your consent, relied only on our
examination of the foregoing documents and certificates. We have, with your
consent, made no independent verification of the factual matters set forth in
the documents, the certificates or in the Merger Agreement.
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We have assumed the genuineness of all signatures (other than signatures of the
Shareholder and persons acting on behalf of Mushkin) of persons signing all
documents and instruments in connection with this opinion, the authority of
such persons signing on behalf of the parties thereto(other than signatures of
the Shareholder and persons acting on behalf of Mushkin) , the conformity to
originals of all documents submitted to us as copies, and the authenticity of
the originals of all documents submitted to us as copies. In rendering the
opinions expressed below, we have assumed that the Merger Agreement has been
duly authorized, executed and delivered by and constitutes a legal, valid and
binding obligation of each party thereto other than Mushkin and the
Shareholders.
We are licensed to practice law in the State of Colorado and do not express any
opinion herein as to matters other than the laws of the State of Colorado and
the federal laws of the United States of America.
We assume no obligation to revise or supplement any of these opinions should
such laws be changed by legislative action, judicial decision or otherwise. We
express no opinion to the extent that the laws of any jurisdiction other than
those identified above are applicable to the subject matter hereof. Our
opinions are limited to the facts as they presently exist. We express no
opinion as to, and expressly disclaim any undertaking or obligation to update
any of these opinions in respect of, changes, circumstances or events which
occur subsequent to the date hereof.
In connection with the opinions expressed herein as being limited to "our
knowledge," such knowledge examination has been limited to discussions with the
Shareholders in the course of this transaction and the knowledge of the lawyers
of our firm with active involvement in negotiating the transactions provided
for by the Merger Agreement and in preparing or commenting on the Merger
Agreement or preparing this opinion.
Based upon, and subject to, the foregoing and the matters disclosed in the
Disclosure Schedule to the Merger Agreement, it is our opinion that:
1. Mushkin is a corporation duly incorporated and validly existing and in good
standing under the laws of the State of Colorado.
2. The authorized capital stock of Mushkin is 10,000 shares of Common Stock,
no par value per share, of which, to our knowledge, the Shares, comprising
2,040 shares of the Common Stock of Mushkin, constitute all of the issued
and outstanding capital stock of Mushkin, are validly issued and
outstanding, fully paid and nonassessable, and are owned of the record by
the Shareholders. To our knowledge, there are no outstanding warrants,
options or rights (preemptive or otherwise) or other securities, plans or
agreements that give the Shareholders or any other person the right to
purchase or otherwise acquire any shares of capital stock of any of Mushkin
or any securities convertible into, exchangeable or exercisable for shares
of such capital stock or under which any such warrant, option, right or
security may be issued in the future.
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3. The Merger Agreement has been duly executed and delivered by the
Shareholders and Mushkin and constitutes a legal, valid and binding
obligation of the Shareholders and Mushkin, enforceable against the
Shareholders and Mushkin in accordance with its terms except as (a)
enforceability may be limited by bankruptcy, insolvency, reorganization of
similar laws affecting creditors' rights generally, (b) the enforceability
of the Shareholders' and Mushkin's obligations under the Merger Agreement
are subject to general principles of equity (whether it is considered in a
proceeding in equity or law), and (c) as to the enforceability of the
indemnification provision of Sections 6(f) of the Merger Agreement, to
public policy considerations or court decisions which may limit the right
of any indemnified party thereunder to obtain indemnification and (d) as to
the geographic scope and time restrictions of Section 6(e).
4. The execution and delivery by the Shareholders and Mushkin of the Merger
Agreement and the performance by the Shareholders and Mushkin of their
respective obligations thereunder do not and will not (a) violate any
provision of the Articles of Incorporation or Bylaws of Mushkin; (b) to
our knowledge, violate any law, rule, regulation, order, writ, or
injunction of the State of Colorado or the United States applicable to the
Shareholders or Mushkin or both or require the Shareholders or Mushkin or
both to obtain any approval, consent or waiver of, or make any filing with,
any person or entity (governmental or otherwise); or (c) to our knowledge,
result in a breach of, constitute a default under, accelerate any
obligation under, or give rise to a right of termination of any indenture
or loan or credit agreement or any other agreement, contract, instrument,
mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award to which Mushkin or
the Shareholders or both are parties, or result in the creation or
imposition of any mortgage, pledge, lien, security interest or other charge
or encumbrance on any of the assets of Mushkin, provided however, that our
opinion with respect to 4(b) and (c) above is limited to those events or
occurrences enumerated above that would have a Material Adverse Effect on
the Company.
5. To our knowledge, there is no litigation or governmental or administrative
proceeding or investigation pending or threatened against any Shareholder
or Mushkin or both which could prevent or hinder the consummation of the
transactions contemplated by the Merger Agreement.
The opinions set forth above are subject to the following additional
qualifications:
(a) We have assumed that Ramtron and Ramtron Sub have all requisite power
and authority and have taken all necessary corporate action to
execute, deliver and perform the Merger Agreement and all documents
and agreements executed in connection therewith to which Ramtron and
Ramtron Sub are a party and to effect the transactions contemplated
thereby and, as to our opinion set forth in paragraph 4 above, that
performance by Ramtron of the Merger Agreement and each of the other
documents delivered in connection therewith will not violate
applicable law.
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(b) We have assumed the due execution and delivery for value of the Merger
Agreement by Ramtron and of each of the other documents delivered in
connection therewith by Ramtron and Ramtron Sub.
(c) Our opinion is limited to matters expressly set forth herein and no
opinion is to be implied or inferred beyond the matters expressly so
stated.
(d) We have assumed that you are not aware of any facts, laws, rules,
regulations, requirements or ordinances of any federal, state, local
or municipal government or regulatory agency that are contrary to, or
cause you to doubt, the opinions expressed herein.
(e) Our opinion is governed by, and shall be interpreted in accordance
with, the following sections of the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991) (the "Governing
Sections"):
(i) Section 4 - Reliance by Opinion Giver on Assumptions;
(ii) Section 14 - Other Common Qualifications;
(iii) Section 19 - Specific Legal Issues.
As a consequence, it is subject to the qualifications, exceptions, definitions,
limitations on coverage and other limitations, described in Governing Sections
of the Accord, and our opinion should be read in conjunction therewith.
(f) We express no opinion as to the effect or availability of rules of law
governing equitable remedies (regardless of whether any such remedy is
considered in a proceeding at law or equity), bankruptcy, insolvency,
nor the availability or enforceability of any remedies provided for in
the Merger Agreement.
(g) We express no opinion as to matters of local, state or federal tax
laws, federal export control laws or state and federal
telecommunications laws.
This opinion is being furnished by us as counsel to Mushkin and the
Shareholders. It is solely for your benefit in connection with the transactions
contemplated by the Merger Agreement and may not be relied upon by you for any
other purpose or by any other person for any purpose, nor may you furnish
copies of this opinion to any other person without our consent.
Sincerely,
/S/ SPARKS WILLSON BORGES BRANDT & JOHNSON, P.C.
SPARKS WILLSON BORGES BRANDT & JOHNSON, P.C.
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EXHIBIT F
June 14, 2000
Mr. William M. Mushkin
Ms. Elizabeth L. Crane
Mushkin Inc.
376 Ogden St.
Denver, Colorado 80218
Dear Mr. Mushkin and Ms. Crane:
Ramtron International Corporation, a Delaware corporation (the "Company"), has
requested that we provide to you this opinion pursuant to Section 7(b)(v) of
the Agreement and Plan of Merger dated May 11, 2000 (the "Merger Agreement"),
among the Company, Mushkin Inc., RIC MI Acquisition Inc. (the "Merger Sub") and
you. Capitalized terms used herein without definition have the meanings
specified in the Merger Agreement (including the definition of you as the
"Shareholders").
For purposes of this opinion, we have examined such questions of law and fact
as we have deemed to be necessary or appropriate and have also examined a copy
of the executed Merger Agreement and each of the documents attached as exhibits
thereto, and such other documents as we have deemed necessary or appropriate,
including, without limitation, the following documents:
(i) The Articles of Incorporation of the Company, as amended to date,
certified by the Secretary of State of the State of Delaware as of
June 8, 2000 (the "Certificate of Incorporation");
(ii) Bylaws of the Company and the Certificate of the Company's Secretary
dated June 14, 2000, certifying the effectiveness of those Bylaws (the
"Bylaws");
(iii) The Certificate of Incorporation of the Merger Sub, certified by the
Secretary of State of the State of Colorado as of June 1, 2000;
(iv) Bylaws of the Merger Sub and the Certificate of the Merger Sub's
Secretary dated June 14, 2000, certifying the effectiveness of those
Bylaws;
(v) Resolutions regarding the Merger Agreement and the transactions
contemplated thereby adopted by the Company's Board of Directors by
unanimous written consent dated May 10, 2000, and the Certificate of
the Company's Secretary dated June 14, 2000, certifying the adoption
of those resolutions;
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(vi) Resolutions regarding the Merger Agreement and the transactions
contemplated thereby adopted by the Merger Sub's Board of Directors by
unanimous written consent dated May 11, 2000, and the Certificate of
the Merger Sub's Secretary dated June 14, 2000, certifying the
adoption of those resolutions;
(vii) The Officers' Certificate dated June 14, 2000, of certain officers of
the Company, certifying certain factual matters, including the
accuracy of the representations and warranties of the Company in the
Merger Agreement;
(viii) The Officers' Certificate dated June 14, 2000, of certain officers of
the Merger Sub, certifying certain factual matters, including the
accuracy of certain matters regarding the Merger Sub;
(ix) The Incumbency Certificate dated June 14, 2000, certifying the
authenticity of certain of the Company's officers' signatures;
(x) The Incumbency Certificate dated June 14, 2000, certifying the
authenticity of certain of the Merger Sub's officers' signatures; and
(xi) A specimen of the stock certificates used to evidence shares of the
Company's Common Stock.
For purposes of this opinion, we have assumed: (i) in examining the above-
referenced documents, the authenticity of all documents submitted to us as
originals, the completeness and conformity with originals of all documents
submitted to us as copies, and the genuineness of all signatures on such
documents; and (ii) that (a) the transactions contemplated in the Merger
Agreement were fair to the Company and its stockholders as of the time they
were authorized by the Company's Board of Directors; (b) the transactions
contemplated in the Merger Agreement insofar as they relate to Mushkin Inc. and
the Shareholders are in compliance with any law or laws applicable to them;
(c) the certificates evidencing the Ramtron Shares to be issued to the
Shareholders will be evidenced by certificates in the form of the specimen
certificate described in paragraph (xi) hereof and signed by duly authorized
officers of the Company; and (d) each of the Shareholders is an "accredited
investor" as that term is defined in Section 501(a) of Regulation D promulgated
under the United States Securities Act of 1933, as amended (the "Securities
Act").
In rendering this opinion, we have relied without independent investigation on
the representations and warranties as to factual matters made by the Company,
the Merger Sub, Mushkin Inc. and the Shareholders in or pursuant to the Merger
Agreement. We have assumed that those representations and warranties are true
and correct as of the date hereof and we have not been made aware of any facts
that would cause us to believe otherwise. With respect to the Company's
capitalization, we have assumed that, consistent with the resolutions adopted
by the Company's Board of Directors as mentioned in paragraph (v) hereof, at
the time or times any shares of the Company's Common Stock are issued to the
Shareholders pursuant to the Merger Agreement (the "Ramtron Shares"), the
Company will have sufficient authorized but unissued shares of Common Stock to
effectuate the issuance of the number of shares of Common Stock to be so
issued.
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Our opinion is subject to the following qualifications:
(A) We do not represent the Company generally but only with respect to
such specific matters as to which we may from time to time be retained by the
Company.
(B) We are attorneys admitted to the Bar of the State of Colorado and this
opinion relates solely to the laws of the State of Colorado and to the General
Corporation Law of the State of Delaware, and we express no opinion with
respect to the effect or applicability of the laws of any other jurisdiction.
(C) The authorization of the Ramtron Shares and the transactions
contemplated by the Merger Agreement may be subject to various judicial and
statutory provisions imposing fiduciary duties upon a board of directors or
committee thereof in authorizing corporate transactions, and we express no
opinion as to the satisfaction of such duties by, as applicable, the Company's
Board of Directors or the Merger Sub's Board of Directors in authorizing such
items.
(D) We have not made any investigation or searches for judgments, liens or
court or administrative actions or proceedings against the Company or against
the Merger Sub.
(E) We have not advised the Company, the Merger Sub or any other person
regarding the characterization of the transactions contemplated by the Merger
Agreement under or pursuant to the tax laws of the United States or of any
state, nor regarding the effects of such transactions under any of said laws
and we express no opinion herein as to any characterization or effect of such
transactions under said laws.
(F) Whenever a statement or opinion herein is qualified by the phrase "to
the best of our actual knowledge" or similar phrase, it is intended to indicate
that, during the course of our representation of the Company and the Merger
Sub, no facts or circumstances that would give us actual knowledge of the
inaccuracy of such statement or opinion have come to our attention. However,
except to the extent expressly set forth herein, we have not undertaken any
special or independent investigation to determine the accuracy of such
statement or opinion, and any limited inquiry undertaken by us during the
preparation of this opinion letter should not be regarded as such an
investigation; and no inference as to our knowledge of the existence of any
such facts or circumstances should be drawn merely from our representation of
the Company and the Merger Sub as above described.
Subject to and based on the foregoing assumptions and qualifications, and
subject to the limitations stated herein, we are of the opinion that:
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1. Each of the Company and the Merger Sub has all necessary corporate power
and authority to execute, deliver and perform its obligations under the Merger
Agreement. The Company's execution and delivery to Mushkin Inc. and the
Shareholders of the Merger Agreement, and the Company's issuance of the Ramtron
Shares to the Shareholders in accordance with the terms of the Merger
Agreement, have been duly authorized by all necessary corporate action of the
Company and do not violate the Company's Certificate of Incorporation or
Bylaws. The Merger Sub's execution and delivery to Mushkin Inc. and the
Shareholders of the Merger Agreement have been duly authorized by all necessary
corporate action of the Merger Sub and do not violate the Merger Sub's Articles
of Incorporation or Bylaws.
2. The Merger Agreement has been duly executed and delivered by the Company
and the Merger Sub, respectively, and constitutes the legal, valid and binding
obligation of the Company and the Merger Sub, respectively, enforceable against
the Company and the Merger Sub, respectively, in accordance with its terms
subject to (a) applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance and similar laws which relate to or affect creditors'
rights generally, (b) general principles of equity, including the possible
unavailability of specific performance, injunctive relief or any other
equitable remedy, and (c) concepts of materiality, reasonableness,
conscionability, good faith and fair dealing. We express no opinion and
explicitly exclude from the foregoing opinion the validity or enforceability of
the provisions in Sections 6(e) and 6(f) of the Merger Agreement, and we
express no opinion regarding the availability of any remedies provided in, or
the severability of any provision of, the Merger Agreement.
3. The Ramtron Shares, when issued and delivered in accordance with the terms
of the Merger Agreement, will be duly and validly issued, fully paid and
nonassessable, and to the best of our actual knowledge free of all liens,
claims and encumbrances other than any liens or encumbrances created by or
imposed upon the holders thereof and imposed pursuant to the Merger Agreement,
Escrow Agreement and Lock-Up Agreement.
4. The Ramtron Shares are not subject to preemptive rights or any other
similar rights of first refusal of the stockholders of the Company contained in
the Certificate of Incorporation or Bylaws, or, to the best of our actual
knowledge, contained in any agreement or other document binding on the Company.
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We undertake no obligation to advise you of facts or changes in law occurring
after the date hereof which might affect the opinions expressed herein. This
opinion is furnished to you by us as special counsel to the Company in
connection with the transactions provided in the Merger Agreement and may be
relied on only by you, is solely for your benefit, and is not to be otherwise
used, circulated, quoted or referred to without our prior written consent.
Very truly yours,
/S/ Coudert Brothers
COUDERT BROTHERS
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