ASSET PURCHASE AND SALE AGREEMENT AMONG SYS AND cVIDEO, INC. AND CERTAIN OF THE STOCKHOLDERS OF cVIDEO, INC. November 10, 2005
AMONG
AND
cVIDEO,
INC.
AND
CERTAIN
OF
THE
STOCKHOLDERS OF
cVIDEO,
INC.
_____________________
November
10, 2005
TABLE OF CONTENTS
ARTICLE
I THE
ACQUISITION
|
|
1.1
Asset Purchase and Sale
|
1.2 Closing
Date
ARTICLE
II PAYMENT
OF ACQUISITION CONSIDERATION AND ASSUMPTION OF
LIABILITIES
|
|
2.1
Acquisition Consideration
|
2.2 Earnout
Consideration
2.3 Restrictive
Legend
2.4 Assumption
of Liabilities
2.5 Non-Assignable
Obligations
2.6 Internal
Revenue Code Election
ARTICLE
III REPRESENTATIONS
AND WARRANTIES OF SYS
|
|
3.1
Organization and Standing
|
3.2 Corporate
Power and Authority
3.3 Conflicts;
Consents and Approvals
3.4 Actions
3.5 Available
Shares
3.6 Capitalization
of SYS
3.7 Brokerage
and Finders’ Fees
3.8 SYS
SEC
Documents
3.9 Books
and
Records
3.10 No
Undisclosed Liabilities
3.11 No
Material Adverse Change
3.12 Disclosure
ARTICLE
IV REPRESENTATIONS
AND WARRANTIES OF cVIDEO AND STOCKHOLDERS
|
|
4.1
Organization and Standing
|
4.2 Subsidiaries
4.3 Power
and
Authority
4.4 Capitalization
of cVideo
4.5 Conflicts;
Consents and Approvals
4.6 Brokerage
and Finders’ Fees
4.7 Books
and
Records; Financial Statements
4.8 Compliance
with Law
4.9 Actions
4.10 No
Material Adverse Change
4.11 Taxes
4.12 Intellectual
Property
4.13 Title
to
Assets and Properties
4.14 Employee
Benefit Plans
4.15 Contracts
4.16 Labor
Matters
4.17 Undisclosed
Liabilities
4.18 Operation
of cVideo’s Business; Relationships
4.19 Permits
4.20 Real
Property
4.21 Environmental
Matters
4.22 Accounts
Receivable
4.23 Insurance
4.24 Product
or Service Warranty
4.25 Data
Protection Matters
4.26 Foreign
Corrupt Practices Act
4.27 Government
Contracts
4.28 Relations
with Governments
4.29 No
Existing Discussions
4.30 Review
of
SYS SEC Documents
4.31 Interested
Party Transactions
4.32 Board
Recommendation
4.33 Payments
to Stockholders and Others
4.34 Disclosure
ARTICLE
V COVENANTS
OF THE PARTIES
|
|
5.1
Mutual Covenants
|
5.2 Covenants
of SYS
5.3 Covenants
of cVideo
ARTICLE
VI CONDITIONS
|
|
6.1
Conditions to the Obligations of Each Party
|
6.2 Conditions
to Obligations of cVideo and the Stockholders
6.3 Conditions
to Obligations of SYS
ARTICLE
VII TERMINATION
AND AMENDMENT
|
|
7.1
Termination
|
7.2 Effect
of
Termination
ARTICLE
VIII GENERAL
SURVIVAL AND INDEMNIFICATION
|
|
8.1
Survival of Representations and Warranties
|
8.2 Indemnification
ARTICLE
IX MISCELLANEOUS
|
|
9.1
Notices
|
9.2 Interpretation
9.3 Counterparts
9.4 Entire
Agreement
9.5 Third-Party
Beneficiaries
9.6 Governing
Law; Venue
9.7 Arbitration
9.8 Specific
Performance
9.9 Assignment
9.10 Expenses
9.11 Severability
9.12 Amendment
EXHIBITS
|
List
of Acquired Assets
|
Exhibit
A
|
|
List
of Assumed Liabilities
|
Exhibit
B
|
|
List
of Liabilities to be Paid at Closing
|
Exhibit
C
|
SCHEDULES
|
cVideo
Disclosure Schedule
|
Attached
|
STOCK
ACQUISITION AGREEMENT
This
Asset Purchase and Sale Agreement (this “Agreement”) is made and entered into as
of November 10, 2005 by and among SYS, a California corporation (“Buyer” or
“SYS”); cVideo, Inc., a Delaware corporation (“Seller” or “cVideo);” and Xxxxxxx
Xxxxxx (“Xxxxxx”), Xxxxxx Xxxxxx, individually and as Trustee of the Xxxxxx
Family Trust (“Xxxxxx”), Xxxxxxx Xxxxxxxx, individually and as Trustee of the
Xxxxxxxx Family Trust (“Xxxxxxxx”), and Cubic Corporation, a Delaware
corporation (“Cubic”), each of whom is a stockholder of cVideo, with regard to
the acquisition by SYS of all of the assets and specified liabilities of
cVideo,
Inc. Such stockholders are referred to individually herein as a
“Stockholder,”“Shareholder” or “cVideo Stockholder” and, collectively, as the
“Stockholders,”“Shareholders” or “cVideo Stockholders.” cVideo and the
Stockholders are sometimes collectively referred to herein as “the Seller
Parties.”
PRELIMINARY
STATEMENTS
WHEREAS,
the respective Boards of Directors of SYS and cVideo have determined that
the
acquisition by SYS of all of the assets and certain specified liabilities
of
cVideo, in the manner contemplated herein (the “Acquisition”), is desirable and
in the best interests of their respective stockholders and, by resolutions
duly
adopted, have approved this Agreement and the Acquisition;
WHEREAS,
SYS, cVideo and the Stockholders desire to make certain representations,
warranties, covenants and agreements in connection with the Acquisition and
also
to prescribe various conditions to the Acquisition.
NOW,
THEREFORE, in consideration of these premises and their promises hereinafter
set
forth, the parties hereto agree as follows:
ARTICLE
I
THE
ACQUISITION
1.1 Asset
Purchase and Sale.
Subject
to the terms and conditions of this Agreement, and pursuant to a Xxxx of
Sale
delivered by Seller in a form and with a substance satisfactory to Buyer,
at the
Closing Seller shall sell, transfer, assign and deliver, and Buyer shall
purchase, accept and receive, all right, title and interest in, to or arising
from the “Acquired Assets” as defined below and all associated goodwill, free
and clear of any and all security interests, mortgages, pledges, conditional
sale and other title retention agreements, assessments, covenants, restrictions,
commitments, liens, charges and encumbrances, obligations, liabilities and
other
burdens of every nature (collectively referred to as “Encumbrances”), in
exchange for the “Acquisition Consideration” as defined in Paragraph 2.1
hereof. At least twelve (12) days before the Closing, Buyer shall give notice
of
the transfer of the Acquired Assets in the manner prescribed by
Section 6107 of the California Uniform Commercial Code. For purposes of
this Agreement, the term “Acquired Assets” shall mean any and all tangible and
intangible assets, rights and interests owned, used, useful, acquired for
use or
held by Seller in connection with the conduct of Seller’s Business (as
hereinafter defined) including goodwill and including, but not limited to,
those
types of assets listed on Exhibit A
hereto,
but excluding all Excluded Assets, which shall be defined as Seller’s corporate
charter, qualifications to conduct business as a foreign corporation in any
state, taxpayer and other identification numbers, seals, minute books, stock
transfer books, blank stock certificates and all other documents relating
to
Seller’s corporate organization, maintenance or existence; and any of Seller’s
rights under this Agreement or any other agreement between Seller and Buyer
entered into before, on or after the date of this Agreement.
1.2 Closing
Date.
A
closing (the “Closing”) shall be held at the offices of SYS’s counsel, Xxxx,
Forward, Xxxxxxxx & Scripps LLP (“Xxxx Xxxxxxx”), 000 Xxxx
Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000, or such other place
as the parties may agree on, as soon as practicable (but in any event within
three (3) business days) following the date upon which all conditions set
forth
in Article VI have been satisfied or waived, or at such other date as SYS,
on the one hand, and cVideo and the Stockholders, on the other hand, may
agree,
provided that the conditions set forth in Article VI have been satisfied or
waived at or prior to such date. The date on which the Closing takes place
is
referred to herein as the “Closing Date.”
ARTICLE
II
PAYMENT
OF ACQUISITION CONSIDERATION AND
ASSUMPTION
OF LIABILITIES
2.1 Acquisition
Consideration.
At the
Closing SYS shall pay creditors of cVideo as described on Exhibit C,
$1,407,000 and shall pay cVideo $50,000 (collectively, the “Acquisition
Consideration”).
2.2 Earnout
Consideration.
2.2.1 If
revenues from the Business (as that term is defined in Section 2.2.2) for
the period between the Closing Date and June 30, 2006 exceed $1,450,000,
then SYS shall pay an additional $161,000 not later than August 15, 2006 to
the persons and in the amounts described on Exhibit B
in
satisfaction of liabilities owed by cVideo.
2.2.2 If
the
revenues derived from the Business for the period between the Closing Date
and
June 30, 2006 exceed $2,000,000 (“Minimum Amount”), then SYS shall pay
cVideo $1.00 for each $1.00 of revenue from the sale and integration of digital
video recording applications and digital video recorders for surveillance
and
monitoring purposes (the “Business”) by SYS during the period from the Closing
Date through December 31, 2006 in excess of $2,500,000 (the “Threshold
Amount”) (the “Earnout Consideration”). SYS shall pay Earnout Consideration to
Seller following the end of the fiscal quarter in which the Threshold Amount
is
achieved and each fiscal quarter thereafter in which Earnout Consideration
continues to be earned, provided, however, that in the case of the fiscal
quarter ending June 30, 2006, any Earnout Consideration shall be paid
within 90 days of June 30, 2006. The maximum amount payable under this
Section 2.2.2 shall be $2,675,000. In addition, consideration payable
pursuant to this Section 2.2.2 shall be in restricted shares of SYS Common
Stock. SYS Common Stock issued as part of any such payment shall be valued
based
on the average closing price of SYS Common Stock on its principal trading
market
over the last thirty business days of the applicable fiscal quarter. For
the
sake of clarity, if the Minimum Amount is not achieved by June 30, 2006, no
amount shall be payable pursuant to this Section 2.2.2.
2.2.3 SYS
Obligations.
After
the Closing and during the term of the earnout period, SYS shall use
commercially reasonable efforts to (i) track the revenues of the Business
and (ii) maintain and enhance the relationships which cVideo has with its
customers, suppliers, lessees, licensees and other third parties as of the
Closing Date. As the operator of the Business, as that term is defined in
Section 5.3.4 of this Agreement, Buyer, at its sole discretion, may effect
changes in the Business. Such changes may include, without limitation, increases
or decreases in salaries, the employment or dismissal of personnel, the
acceleration or delay of payments to creditors, the purchase or sale of
inventory, the retention of independent contractors, the conduct of research
and
development, or any other business matter. Seller agrees that Buyer’s exercise
of discretion in this regard in good faith shall not be a basis for challenging
the determination of payments to cVideo. For purposes of this
Section 2.2.5, a change shall be deemed to be in good faith if it is not
made primarily to prevent the business from achieving the earnout period
goals.
Buyer may also, in its discretion, create a new operating plan for the business
to reflect changes in the business, including changes in revenues.
2.2.4 Right
to Audit and Inspect.
A
designee of cVideo shall have the right, upon reasonable prior notice and
during
normal business hours, to audit and inspect any and all books and records
used
by SYS for the purposes of determining the revenues of the Business for purposes
of verifying earnout computation.
2.3 Restrictive
Legend.
The
certificate evidencing SYS Common Shares issued pursuant to this Agreement
shall
bear the following legend in conspicuous type:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
STATE
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR QUALIFICATION WITHOUT AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION OR QUALIFICATION IS
NOT
REQUIRED.
2.4 Assumption
of Liabilities.
Buyer
shall not assume or pay, perform or discharge, any of Seller’s liabilities,
obligations or duties whatsoever, except for those described in
subparagraphs 2.4.1 and 2.4.2 below; provided, however, that Buyer shall
not assume any such liability, obligation or duty (i) which results from
any breach by Seller of any of its obligations, duties or commitments,
(ii) for which, if known by Seller, a reserve or any other reference would
have been required by generally accepted accounting principles, but which
was
omitted by Seller from the cVideo Financial Statements, (iii) which
constitutes, or forms the basis of, a breach of any of Seller’s representations,
warranties or covenants under this Agreement, or (iv) which is not
assignable to Buyer pursuant to its terms, or is not validly assigned to
Buyer
at the Closing:
2.4.1 Customer
Orders.
All
customer orders entered into in the ordinary course of business consistent
with
past practice; and
2.4.2 Executory
Agreements.
The
accounts payable and the executory portion of those contracts, leases, license
agreements, commitments and other agreements which are listed on Exhibit B
to this
Agreement, provided that Seller’s obligations specified on Exhibit C
shall be
paid at Closing by Buyer in the amounts specified directly to the applicable
creditor.
2.5 Non-Assignable
Obligations.
If any
customer, vendor or other party refuses or otherwise fails to give any consent
necessary to assign or transfer to Buyer all of Seller’s rights and obligations
under any contract, commitment, right or other agreement to be transferred
to
and assumed by Buyer under this Agreement, Buyer and Seller will cooperate
with
each other in any reasonable arrangement designed to provide Buyer with all
benefits and obligations under such contract, commitment, right or agreement
including, without limitation, for at least six (6) months following the
Closing, (i) the purchase by Seller of any items required under any
contract or order with any vendor, with Buyer agreeing to purchase such items
from Seller upon the same terms as Seller acquired such items and (ii) the
performance by Buyer as an independent contractor of all work necessary to
fill
any such customer order and to ship the product called for thereunder to
the
customer in question with the understanding that Seller will purchase such
products from Buyer at the net price which Seller resells such products to
such
customer.
2.6 Internal
Revenue Code Election.
At its
option, following the Closing Date SYS may make an election under
Section 338 of the Internal Revenue Code of 1986, as amended, with regard
to the Acquisition.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF SYS
In
order
to induce cVideo and the Stockholders to enter into this Agreement, SYS hereby
represents and warrants to cVideo and the Stockholders that the statements
contained in this Article III are true, correct and complete, except as
otherwise expressly set forth in this Article III as of the date hereof
unless another date is expressly stated below.
3.1 Organization
and Standing.
SYS and
each subsidiary of SYS is a corporation duly organized, validly existing
and,
where applicable, in good standing under the laws of its state of incorporation
with corporate power and authority to own, lease, use and operate its properties
and to conduct its business as and where now owned, leased, used, operated
and
conducted. Each of SYS and each subsidiary of SYS is duly qualified to do
business and in good standing in each jurisdiction in which the nature of
the
business conducted by it or the property it owns, leases or operates, requires
it to so qualify, except where the failure to be so qualified or in good
standing in such jurisdiction would not have a Material Adverse Effect on
SYS
and its subsidiaries taken as a whole. SYS is not in default in the performance,
observance or fulfillment of any provision of the SYS Articles of
Incorporation, as amended (the “SYS Articles”), or the SYS Amended and Restated
Bylaws, as amended, as in effect on the date hereof (the “SYS Bylaws”). SYS has
heretofore furnished to cVideo complete and correct copies of the SYS Articles
and the SYS Bylaws.
3.2 Corporate
Power and Authority.
SYS has
all requisite corporate power and authority to enter into and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by SYS and constitutes the legal, valid and binding
obligation of SYS enforceable against it in accordance with its terms, except
to
the extent that such enforceability may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally or by general equitable
principles.
3.3 Conflicts;
Consents and Approvals.
Neither
the execution and delivery of this Agreement by SYS nor the consummation
of the
transactions contemplated hereby or thereby will:
3.3.1 conflict
with, or result in a breach of any provision of, the SYS Articles or the
SYS
Bylaws or the governing documents of any subsidiary of SYS;
3.3.2 materially
violate, or conflict with, or result in a material breach of any provision
of,
or constitute a material default (or an event that, with the giving of notice,
the passage of time or otherwise, would constitute a default) under, or entitle
any party (with the giving of notice, the passage of time or otherwise) to
terminate, accelerate, modify or call a material default under, or result
in the
creation of any material Encumbrance upon any of the properties or assets
of SYS
or any of its subsidiaries under, any of the terms, conditions or provisions
of
any material note, bond, mortgage, indenture, deed of trust, license, contract,
undertaking, agreement, lease or other instrument or obligation to which
SYS or
any of its subsidiaries is a party (for purposes of this Agreement,
“Encumbrance” means any charge, claim, mortgage, servitude, easement, right of
way, equitable interest, lease or other possessory interest, conditional
sale or
other title retention arrangement, lien, pledge, security interest, preference,
priority, right of first refusal or similar restriction);
3.3.3 materially
violate any (i) order, writ, injunction, decree, statute, ruling,
assessment, or arbitration or award of any Governmental Authority or
(ii) Applicable Laws relating to SYS or any of its subsidiaries or their
respective properties or assets; or
3.3.4 require
any action or consent or approval of, or review by, or registration or filing
by
SYS or any of its affiliates with, any third party or any Governmental
Authority, other than registrations or other actions required under federal
and
state securities laws as are contemplated by this Agreement.
3.4 Actions.
There
is no Action against SYS which questions the validity of this Agreement or
any
action taken or to be taken pursuant hereto. For purposes of this Agreement,
“Action” means any action, arbitration, audit, examination, suit, proceeding,
hearing or litigation, whether formal or informal, and whether public or
private, commenced, brought, conducted or heard by or before, pending or
threatened, or otherwise. Since July 1, 2001, neither SYS nor any of its
subsidiaries has been subject to any order, writ, injunction or decree relating
to its method of doing business or its relationship with past, existing or
future users or purchasers of any goods or services.
3.5 Available
Shares.
SYS has
a sufficient number of authorized but unissued or unreserved SYS Common Shares
to pay the Earnout Consideration. Each share of SYS Common Stock constituting
the Earnout Consideration has been duly authorized, and at the Closing, shall
be
validly issued, fully paid and nonassessable and not issued in violation
of any
preemptive or similar rights.
3.6 Capitalization
of SYS.
3.6.1 The
authorized capital stock of SYS consists of 48,000,000 common shares (the
“SYS
Common Stock”), 250,000 preferred shares (the “SYS Preferred Stock”), and
2,000,000 preference shares (the “SYS Preference Stock”). At the date of this
Agreement, (i) 11,438,513 shares of SYS Common Stock are issued and
outstanding, (ii) 1,956,297 shares of SYS Common Stock are reserved for
issuance upon the exercise or conversion of options, warrants or convertible
securities granted or issuable by SYS, not including SYS’s Stock Option and
Stock Purchase Plans, (iii) 2,498,100 shares of SYS Common Stock are
reserved for issuance under SYS’s Stock Option and Stock Purchase Plans,
(iv) no shares of SYS Preferred Stock are issued and outstanding, and
(v) no shares of SYS Preference Stock are issued and outstanding. The SYS
Common Stock, the SYS Preferred Stock, and the SYS Preference Stock are referred
to herein collectively as the “SYS Capital Stock.” Each outstanding share of SYS
Capital Stock is duly authorized and validly issued, fully paid and
nonassessable and has not been issued in violation of any preemptive or similar
rights. The issuance and sale of all of the shares of SYS Capital Stock
described in this Section 3.6 have been in compliance in all material
respects with applicable federal and state securities laws.
3.7 Brokerage
and Finders’ Fees.
Neither
SYS nor any stockholder, director, officer or employee thereof, has incurred
or
will incur on behalf of SYS or any of its affiliates, any brokerage, finders’ or
similar fee in connection with the transactions contemplated by this Agreement
other than to Smallcap Corporate Advisors, LLC.
3.8 SYS
SEC Documents.
SYS has
filed with the U.S. Securities and Exchange Commission (the “Commission”) all
forms, reports, schedules, statements and other documents (including exhibits
and other information incorporated therein) required to be filed by it since
July 1, 2003 under the Securities Act of 1933, as amended (the “Securities
Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
(such documents, as supplemented and amended since the time of filing,
collectively, the “SYS SEC Documents”). No subsidiary of SYS is required to file
any form, report, registration statement, prospectus or other document with
the
Commission. To the Knowledge of SYS, the SYS SEC Documents, including, without
limitation, any financial statements or schedules included in the SYS SEC
Documents, at the time filed (and, in the case of registration statements
and
proxy statements, on the dates of effectiveness and the dates of mailing,
respectively and, in the case of any SYS SEC Document amended or superseded
by a
filing prior to the date of this Agreement, then on the date of such amending
or
superseding filing): (a) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading and (b) complied in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act, as the case may be. The financial statements of SYS (including the related
notes) included in the SYS SEC Documents at the time filed (and, in the case
of
registration statements and proxy statements, on the dates of effectiveness
and
the dates of mailing, respectively, and, in the case of any SYS SEC Document
amended or superseded by a filing prior to the date of this Agreement, then
on
the date of such amending or superseding filing) complied in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto, were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-QSB
of
the Commission), and fairly present (subject, in the case of unaudited
statements, to normal, recurring audit adjustments not material in amount)
in
all material respects the consolidated financial position of SYS and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended. Since
July 1, 2003, SYS has maintained its books of account in accordance in all
material respects with Applicable Law; and such books of account are complete
and correct in all material respects, fairly and accurately reflect the income,
expenses, assets and liabilities of SYS and its subsidiaries in all material
respects, including the nature thereof and the transactions giving rise thereto,
and provide a fair and accurate basis for the preparation of the financial
statements of SYS included in the SYS SEC Documents.
3.9 Books
and Records.
Since
July 1, 2003, SYS and its subsidiaries have, in all material respects,
maintained their minute books, stock books, stock ledgers, quota registers
and
other local equivalents in accordance in all material respects with Applicable
Law, sound business practices and the requirements of
Section 13(b)(2) of the Exchange Act, including the maintenance of an
adequate system of internal controls. The minute books of SYS and its
subsidiaries contain accurate and complete records of all proceedings, consents
and meetings held of, and corporate action taken by, their stockholders,
the
boards of directors, and committees of the boards of directors, and other
governing bodies, as applicable, and no meeting of any such stockholders,
board
of directors, committee or other governing body has been held for which minutes
have not been prepared and are not contained in such minute books. The books
of
account of SYS and its subsidiaries are complete and correct in all material
respects, have been maintained in accordance with Applicable Law, fairly
and
accurately reflect the income, expenses, assets and liabilities of SYS and
its
subsidiaries, including the nature thereof and the transactions giving rise
thereto, and provide a fair and accurate basis for the preparation of the
SYS
financial statements set forth in the SYS SEC Documents. The signatures
appearing on all documents contained in such books of account are the true
signatures of the persons purporting to have signed the same.
3.10 No
Undisclosed Liabilities.
Except
(a) as and to the extent disclosed or reserved against on the audited
balance sheet of SYS as of June 30, 2005 or (b) as incurred after the
date thereof in the ordinary course of business consistent with past practice,
SYS and its subsidiaries do not have any liabilities or obligations of any
nature, whether known or unknown, absolute, accrued, contingent, xxxxxx,
inchoate or otherwise and whether due or to become due, that, individually
or in
the aggregate, have or would reasonably be expected to have a Material Adverse
Effect on SYS and its subsidiaries taken as a whole.
3.11 No
Material Adverse Change.
Since
June 30, 2005, there has been no material adverse change in the assets,
liabilities, results of operations, business prospects, or financial condition
of SYS or any event, occurrence or development that would reasonably be expected
to have a Material Adverse Effect on SYS and its subsidiaries taken as a
whole.
3.12 Disclosure.
This
Article III does not contain a material misstatement of fact or omit to
state a fact necessary to make the facts which are stated herein, taken as
a
whole, not materially misleading.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF cVIDEO
AND STOCKHOLDERS
In
order
to induce SYS to enter into this Agreement, cVideo and the Stockholders jointly
and severally represent and warrant to SYS that the statements contained
in
Sections 4.5, 4.6 and 4.32 of this Article IV, and cVideo, Tumini and
Xxxxxx jointly and severally represent that the statements contained in this
Article IV, are true, correct, and complete, in each case except as
otherwise expressly set forth in this Article IV or in the Disclosure
Schedule previously delivered by cVideo to SYS and incorporated herein by
reference (the “cVideo Disclosure Schedule”), as of the date hereof and as of
the Closing Date unless another date is expressly stated below or in the
cVideo
Disclosure Schedule.
4.1 Organization
and Standing.
cVideo
is a corporation duly organized and validly existing under the laws of the
State
of Delaware with full corporate power and authority to own, lease, use and
operate its properties and to conduct its business as and where now owned,
leased, used, operated and conducted. cVideo is duly qualified or licensed
to do
business and is in good standing in each jurisdiction in which the nature
of the
business conducted by it or the property it owns, leases, uses, or operates
requires it to so qualify, be licensed or be in good standing except where
the
failure to be so qualified, licensed or in good standing in such jurisdiction
would not have a Material Adverse Effect on cVideo or its business or properties
taken as a whole. cVideo is not in default in the performance, observance
or
fulfillment of any provision of its Certificate of Incorporation (the “cVideo
Articles”) or its Bylaws (the “cVideo Bylaws”), as in effect on the date hereof.
cVideo has previously furnished to SYS complete and correct copies of the
cVideo
Articles and the cVideo Bylaws, each as in effect on the date hereof. Listed
in
Section 4.1 in the cVideo Disclosure Schedule is each jurisdiction in
which cVideo is qualified or licensed to do business and whether cVideo is
in
good standing in each applicable jurisdiction as of the date of the
Agreement.
4.2 Subsidiaries.
cVideo
does not own, directly or indirectly, any equity or other ownership interest
in
any corporation, partnership, joint venture or other entity or enterprise.
cVideo is not subject to any obligation or requirement to provide funds to
or
make any investment (in the form of a loan, capital contribution or otherwise)
in any person.
4.3 Power
and Authority.
cVideo
has all requisite corporate power and authority to enter into and deliver
this
Agreement, to perform its obligations hereunder and, subject to approval
of the
Acquisition and the transactions contemplated hereby by the stockholders
of
cVideo, to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by cVideo have been duly authorized by all
necessary corporate action on the part of cVideo, subject to approval of
the
Acquisition and the transactions contemplated hereby by the stockholders
of
cVideo. This Agreement has been duly executed and delivered by cVideo and
the
Stockholders and constitutes the legal, valid and binding obligation of cVideo
and the Stockholders, enforceable against each of them in accordance with
its
terms, except to the extent that such enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws
affecting the enforcement of creditors’ rights generally or by general equitable
principles.
4.4 Capitalization
of cVideo.
The
authorized capital stock of cVideo consists of 30,000,000 common shares (the
“cVideo Common Stock”), 9,000,000 shares of Series 1 Preferred Stock (the
“Series 1 Preferred Stock”) and 1,500,000 shares of Series 2 Preferred
Stock (the “Series 2 Preferred Stock”). At the date of this Agreement,
(i) 2,087,414, 6,044,341, and 1,236,642 shares of cVideo Common Stock,
Series 1 Preferred Stock, and Series 2 Preferred Stock, respectively,
are issued and outstanding, and (ii) no shares of cVideo Common Stock,
Series 1 Preferred Stock, and Series 2 Preferred Stock are reserved
for issuance upon the exercise or conversion of options, warrants or convertible
securities. Each outstanding share of cVideo Capital Stock is duly authorized
and validly issued, fully paid and nonassessable and has not been issued
in
violation of any preemptive or similar rights.
4.4.1 As
of the
date hereof, other than as set forth in clause 4.4(ii) above, there are no
outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating
to
the issuance, sale, repurchase or transfer by cVideo of any securities of
cVideo, nor are there outstanding any securities which are convertible into
or
exchangeable for any shares of cVideo Capital Stock, and cVideo has no
obligation of any kind to issue any additional securities or to pay for or
repurchase any securities of cVideo or any predecessor. Set forth in
Section 4.4.1 of the cVideo Disclosure Schedule is an accurate and
complete list of the names of all holders of cVideo Capital Stock, and the
number and class of shares held by each such cVideo stockholder. Set forth
in
Section 4.4.1 of the cVideo Disclosure Schedule is an accurate and
complete list of the names of all holders of options, warrants or convertible
instruments to purchase cVideo Capital Stock, the number of shares issuable
to
each such holder upon exercise of such option or warrant or the conversion
of
such convertible security, and the exercise or conversion price and vesting
schedule with respect thereto.
4.4.2 cVideo
has not agreed to register any securities of cVideo under the Securities
Act or
under any applicable securities law or granted registration rights to any
person
or entity.
4.5 Conflicts;
Consents and Approvals.
Neither
the execution and delivery of this Agreement by cVideo and the Stockholders,
nor
the consummation of the transactions contemplated hereby will:
4.5.1 conflict
with, or result in a breach of any provision of, the cVideo Articles or the
cVideo Bylaws;
4.5.2 violate
or conflict with, or result in a breach of any provision of, or constitute
a
default (or an event that, with the giving of notice, the passage of time
or
otherwise, would constitute a default) under, or entitle any party (with
the
giving of notice, the passage of time or otherwise) to terminate, accelerate,
modify or call a default under, or result in the creation of any Encumbrance
upon any of the properties or assets of cVideo under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of
trust,
license, contract, undertaking, agreement, lease or other instrument or
obligation to which any Stockholder or cVideo is a party, including without
limitation, any Contract;
4.5.3 violate
any (i) order, writ, injunction, decree, ruling, assessment, arbitration,
or award of any Governmental Authority or arbitrator or (ii) Applicable
Laws relating to any Stockholder or to cVideo or any of its properties or
assets; or
4.5.4 require
any action or consent or approval of, or review by, or registration or filing
by
any Stockholder or cVideo or any of its affiliates with, any third party
or any
Governmental Authority, other than (i) approval of the Acquisition and the
transactions contemplated hereby by the stockholders of cVideo and
(ii) registrations or other actions required under federal and state
securities laws as are contemplated by this Agreement.
4.6 Brokerage
and Finders’ Fees.
Neither
cVideo nor any stockholder, director, officer or employee thereof has incurred
or will incur on behalf of cVideo or any Stockholder, any brokerage, finders’ or
similar fee in connection with the transactions contemplated by this Agreement.
4.7 Books
and Records; Financial Statements.
4.7.1 From
its
date of incorporation, the minute books, stock books and stock ledgers of
cVideo
(the “Books of Account”) have been maintained, in all respects, in accordance
with Applicable Law. The signatures of cVideo personnel appearing on all
documents contained in such Books of Account are the true signatures of the
persons purporting to have signed the same, and complete and correct copies
of
such Books of Account have been provided to SYS.
4.7.2 Attached
to Section 4.7.2 of the cVideo Disclosure Schedule, as previously delivered
to SYS, are complete and correct copies of (i) the unaudited balance sheet
of cVideo as of September 30, 2005, and the related statements of income
and sources and uses of cash for the 9-month period then ended and (ii) the
audited balance sheets of cVideo as of December 31, 2004, and
December 1, 2003, and the related statements of income and sources and uses
of cash for the 12-month periods then ended and the related reports of auditors
(collectively, the “cVideo Financial Statements”). The cVideo Financial
Statements (including the related notes) were prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present (subject, in the case of unaudited statements, to normal,
recurring audit adjustments not material in amount and to the absence of
footnotes) the financial position of cVideo as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended.
4.7.3 Attached
to Section 4.7.3 of cVideo Disclosure Schedule are projected financial
results of the operation of cVideo’s business which have been delivered to SYS
by cVideo and which have been relied upon by SYS in arriving at its decision
to
acquire cVideo. These projected financial results are based upon reasonable
assumptions and represent the best judgment of cVideo’s management with regard
to cVideo’s anticipated financial performance following its acquisition by
SYS.
4.8 Compliance
with Law.
Except
with respect to Applicable Laws discussed elsewhere in this Article IV,
cVideo is in compliance, in all respects, and at all times since the date
of its
incorporation, has been in compliance, in all respects, with all Applicable
Laws
relating to cVideo or its businesses or properties, except where the failure
to
be in compliance with such Applicable Laws (individually or in the aggregate)
would not have a Material Adverse Effect on cVideo, or where such noncompliance
has been cured and is reasonably expected to have no material impact on the
future business or operations of cVideo. cVideo has received no written notice
of any pending investigation or review by any Governmental Authority with
respect to cVideo and no such investigation or review is threatened, nor
has any
Governmental Authority indicated an intention to conduct the same.
4.9 Actions.
Section 4.9 of the cVideo Disclosure Schedule sets forth each instance
in which cVideo has filed or received written notice of an Action pending
and
each instance in which, to the Knowledge of the Stockholders, any Action
is
threatened against or by cVideo. Since the date of its incorporation, cVideo
has
not received written notice of cVideo being subject to any order, writ,
injunction or decree relating to its method of doing business or its
relationship with past, existing or future users or purchasers of any goods
or
services.
4.10 No
Material Adverse Change.
Since
January 1, 2005, there has been no material adverse change in the assets,
liabilities, results of operations, business prospects, or financial condition
of cVideo or any event, occurrence or development that would reasonably be
expected to have a Material Adverse Effect on cVideo.
4.11 Taxes.
4.11.1 With
regard to federal and state taxes:
(i) cVideo
has filed all Tax Returns (including, but not limited to, those filed on
a
consolidated, combined or unitary basis) required to have been filed by cVideo
prior to the date hereof;
(ii) All
such
Tax Returns referred to in clause 4.11.1(i) above were true and correct
(except for such inaccuracies which are individually, and in the aggregate,
not
material) and cVideo has paid or, prior to the Closing Date, will pay within
the
time and manner prescribed by Applicable Law, all Taxes, interest and penalties
required to be paid in respect of the periods covered by such Tax Returns
due to
any federal, state, foreign, local or other Tax authority;
(iii) cVideo
has no liability for Taxes that is in excess of the amount reserved on the
cVideo Financial Statements;
(iv) cVideo
has not requested or filed any document having the effect of causing any
extension of time within which to file any returns in respect of any fiscal
year
which have not since been filed;
(v) cVideo
has not received written notice of any currently due and payable deficiency
for
any Tax from any Tax authority;
(vi) cVideo
has not received written notice that it is the subject of any currently ongoing
Tax audit;
(vii) As
of the
date of this Agreement, cVideo has not received written notice from any Tax
authority of any pending requests for waivers of the time to assess any Tax,
other than those made in the ordinary course and for which payment has been
made;
(viii) cVideo
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;
(ix) There
are
no recorded Encumbrances with respect to Taxes upon any of the properties
or
assets, real or personal, tangible or intangible of cVideo (other than liens
for
Taxes not yet due and/or delinquent); and
(x) No
written claim has ever been received by cVideo from a Governmental Authority
in
a jurisdiction where cVideo does not file Tax Returns that cVideo is or may
be
subject to taxation by that jurisdiction.
4.11.2 cVideo
is
not obligated by any Contract, agreement or other arrangement to indemnify
any
other person with respect to Taxes. cVideo is not now or has ever been a
party
to or bound by any agreement or arrangement (whether or not written and
including, without limitation, any arrangement required or permitted by law)
binding cVideo that (i) requires cVideo to make any Tax payment to or for
the account of any other person, (ii) affords any other person the benefit
of any net operating loss, net capital loss, investment Tax credit, foreign
Tax
credit, charitable deduction or any other credit or Tax attribute which could
reduce Taxes (including, without limitation, deductions and credits related
to
alternative minimum Taxes) of cVideo, or (iii) requires or permits the
transfer or assignment of income, revenues, receipts or gains to cVideo,
from
any other person.
4.11.3 Except
as
set forth in Section 4.11.3 of the cVideo Disclosure Schedule, cVideo has
withheld and paid over all Taxes required to have been withheld and paid
over in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party.
4.11.4 cVideo
has not agreed to make, or has received any written notice from the Internal
Revenue Service proposing that cVideo make, any adjustments pursuant to
Sections 263A or 481(a) of the Code or any similar provision of state,
local or foreign law by reason of a change in accounting method initiated
by
cVideo, and cVideo has no application pending with any Governmental Authority
requesting permission for any changes in accounting methods that relate to
the
business or operations of cVideo.
4.11.5 cVideo
has not requested any private letter ruling of the Internal Revenue Service
or
comparable ruling of other Governmental Authorities.
4.11.6 The
Tax
Returns of cVideo for the fiscal years ended 2005 and 2004, complete and
correct
copies of which are attached to Section 4.11.6 of the cVideo Disclosure
Schedule, list all deductions giving rise to any current-year Tax loss set
forth
on the applicable Tax Returns and the amount of each such Tax loss in each
jurisdiction.
4.11.7 Except
for the group for which cVideo is presently a member, if any, cVideo has
never
been a member of an affiliated group of corporations, within the meaning
of
Section 1504 of the Code, other than as a common parent corporation, within
the meaning of Section 1504 of the Code (or any similar provision of state
or local law), except where cVideo was the common parent corporation of such
affiliated group.
4.11.8 cVideo
has no liability for the Taxes of any person other than any of cVideo under
Regulation Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or
otherwise.
4.11.9 All
elections with respect to the Tax Returns are reflected in the Tax Returns.
4.11.10 cVideo
is
not or has not been, a United States real property holding corporation (as
defined in section 897(c)(2) of the Code) during the applicable period
specified in section 897(c)(1)(A)(ii) of the Code.
4.11.11 cVideo
is
nor or has nor been a party to any joint venture, partnership, or other
agreement that would be treated as a partnership for U.S. federal income
tax
purposes.
4.11.12 cVideo
has not participated in an international boycott as defined in Section 999
of the Code (or any similar provision of state, local or foreign
law).
4.11.13 As
used
in this Agreement, “Tax Returns” means all federal, state, local and foreign Tax
returns, declarations, schedules, information returns, reports and forms,
and
any amendments to any of the foregoing relating to Taxes, required to be
filed
with any Governmental Authority responsible for the imposition or collection
of
Taxes.
4.11.14 As
used
in this Agreement, “Tax” or “Taxes” means (i) any federal, state, county,
local or foreign taxes, charges, fees, levies or other assessments, including
all net income, gross income, premium, sales and use, ad valorem, transfer,
gains, profit, windfall profits, excise, franchise, real and personal property,
gross receipts, capital stock, production, business and occupation, employment,
disability, payroll, license, estimated, customs duties, severance or
withholding taxes, other taxes or similar charges of any kind imposed by
a
Governmental Authority and includes any interest and penalties (civil or
criminal) on or additions to any such taxes or in respect of a failure to
comply
with any requirement relating to any Tax Return and any expenses incurred
in
connection with the determination, settlement or litigation of any tax
liability.
4.12 Intellectual
Property.
4.12.1 Set
forth
in Section 4.12.1 of the cVideo Disclosure Schedule is an accurate and
complete list of (i) all foreign and domestic patents, patent applications,
invention disclosures, trademarks, service marks, trade names, internet domain
names (and any registrations or applications for registration for any of
the
foregoing trademarks, service marks, trade names and internet domain names)
and
all copyright applications and registrations and all other material Intellectual
Property rights owned by cVideo, (ii) all agreements with respect to which
cVideo received gross revenue of at least $5,000 during the 18-month period
from
January 1, 2004 to June 30, 2005, which concern any of its
Intellectual Property, and (iii) all material non-customer agreements to
which cVideo is a party which concerns any of its Intellectual
Property.
4.12.2 With
regard to Intellectual Property:
(i) To
the
Knowledge of the Seller Parties, cVideo owns the Intellectual Property free
and
clear of any Encumbrances, or has sufficient rights to use the Intellectual
Property as it is currently being used by cVideo;
(ii) No
written claim of invalidity or ownership with respect to the Intellectual
Property has been received by cVideo from any third party and no Intellectual
Property is the subject of any pending or threatened Action;
(iii) To
the
Knowledge of the Seller Parties, neither cVideo nor any licensee of cVideo
is
infringing or has infringed any domestic or foreign patent, trademark, service
xxxx, trade name, or copyright or design right, or has misappropriated or
improperly used or disclosed any trade secret, confidential information or
know-how;
(iv) All
fees,
annuities, royalties, honoraria and other payments which are due from cVideo
on
or before the date of this Agreement for any of the Intellectual Property
have
been paid;
(v) To
the
Knowledge of the Seller Parties, except as limited by the terms of any license
relating thereto, the making, using, selling, manufacturing, marketing,
licensing, reproduction, distribution, disposal, modification, display,
transmission or publishing of any process, machine, manufacture, composition
of
matter, or material related to any part of the Intellectual Property does
not
and will not infringe in any material respect any domestic or foreign patent,
trademark, service xxxx, trade name, copyright, moral right or other
intellectual property right of any third party, and does not and will not
involve the misappropriation or improper use or disclosure of any trade secrets,
confidential information or know-how of any third party;
(vi) To
the
Knowledge of the Seller Parties, no unexpired foreign or domestic patents
or
patent applications exist that are adverse to the interests of cVideo;
(vii) To
the
Knowledge of the Seller Parties, there exists no (A) prior act of cVideo or
any third party that would void or invalidate any of the Intellectual Property
or (B) conduct or use by cVideo or any third party that would void or
invalidate any of the Intellectual Property; and
(viii) The
execution, delivery and performance of this Agreement by cVideo and the
Stockholders, and the consummation of the transactions contemplated hereby,
will
not materially breach, violate or conflict with any instrument or agreement
relating to the Intellectual Property to which cVideo is a party, will not
cause
the forfeiture or termination or give rise to a right of forfeiture or
termination of any of the Intellectual Property or in any way impair the
right
of cVideo, to make, use, sell, license or dispose of, distribute, modify,
display or transmit or to bring any action for the infringement of, any
Intellectual Property.
4.12.3 cVideo
has taken commercially reasonable steps to safeguard and maintain the secrecy
and confidentiality of (i) all trade secrets and (ii) to the extent
required by Applicable Law, patent applications and their related inventions
prior to the issuance of a patent registration contained in the Intellectual
Property.
4.12.4 As
used
in this Agreement, “Intellectual Property” means all domestic or foreign
patents, patent applications, inventions (whether or not patentable), processes,
products, technologies, discoveries, copyrightable and copyrighted works,
apparatus, trade secrets, trademarks, logos, know-how, internet domain names,
copyrights, trademark registrations and applications, service marks, service
xxxx registrations and applications, trade names, trade dress, copyright
registrations, customer lists, marketing and customer information, licenses,
technical information (whether confidential or otherwise), software, and
all
documentation thereof, in each case that is owned by, or licensed to cVideo
(other than third-party “click wrap or “shrink wrap” software licenses, as to
which cVideo makes no representations or warranties) on the date
hereof.
4.13 Title
to Assets and Properties.
cVideo
has good, valid, and marketable title to, or a valid leasehold interest in,
and
unrestricted possession (other than under the terms of relevant leases) of,
the
assets and properties used by cVideo, located on its premises or shown on
the
cVideo Financial Statements, free and clear of all Encumbrances, except for
assets and properties disposed of in the ordinary course of business since
January 1, 2005. Such assets and properties are sufficient to carry on the
business of cVideo as it is currently being conducted and as it is proposed
to
be conducted.
4.14 Employee
Benefit Plans.
4.14.1 With
respect to each cVideo Plan, cVideo has made available to SYS a correct and
substantially complete copy of the following (where applicable): (i) each
writing constituting a part of such cVideo Plan, including without limitation
all plan documents, benefit schedules, trust agreements, and insurance contracts
and other funding vehicles; (ii) the three most recently filed Annual
Reports (Form 5500 Series) and accompanying schedules, if any; (iii) the
current summary plan description, if any; (iv) the most recent annual
financial report, if any; and (v) the most recent determination letter from
the Internal Revenue Service, if any.
4.14.2 The
Internal Revenue Service has issued a favorable determination letter with
respect to each cVideo Plan that is intended to be a Qualified Plan and,
to the
Knowledge of the Seller Parties, there are no existing circumstances or any
events that have occurred that could adversely affect the qualified status
of
any cVideo Plan that is a Qualified Plan or the related trust.
4.14.3 All
contributions required to be made by cVideo to any cVideo Plan by Applicable
Laws or by any cVideo Plan document or other contractual undertaking, and
all
premiums due or payable with respect to insurance policies funding any cVideo
Plan, for any period through the date hereof, have been made or paid in
full.
4.14.4 Each
cVideo Plan has been maintained and administered in material compliance with
its
terms and Applicable Law, including ERISA and the Code. There is not now,
and
there are no existing circumstances that could reasonably be expected to
give
rise to, any requirement for the posting of security with respect to a cVideo
Plan or the imposition of any Encumbrance on the assets of cVideo under ERISA
or
the Code with respect to a cVideo Plan.
4.14.5 cVideo
has not, at any time within six years before the date hereof, maintained,
contributed to or been obligated to contribute to any Multiemployer Plan
or
Multiple Employer Plan or any plan covered by Section 412 of the Code or
Title IV of ERISA.
4.14.6 To
the
Knowledge of the Seller Parties, there does not now exist, and there are
no
existing circumstances that could reasonably be expected to result in, any
Controlled Group Liability that would be a liability of cVideo following
the
Closing. Without limiting the generality of the foregoing, cVideo has not
engaged in any transaction described in Section 4069 or Section 4204
of ERISA.
4.14.7 Except
for health continuation coverage as required by Section 4980B of the Code
or Part 6 of Title I of ERISA (or other Applicable Law pertaining to
COBRA or Cal-COBRA), cVideo has no liability for life, health, medical or
other
welfare benefits to former employees or beneficiaries or dependents thereof
and
there has been no communication to employees of cVideo that promises or
guarantees such employees retiree health or life insurance benefits or other
retiree death benefits.
4.14.8 Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in, cause the accelerated vesting
or delivery of, or increase the amount or value of, any payment or benefit
to
any employee, officer, director or consultant of cVideo (other than the
acceleration of vesting of stock options or warrants which may, however,
terminate upon the Closing). Without limiting the generality of the foregoing,
no amount paid or payable by cVideo in connection with the transactions
contemplated hereby, either solely as a result thereof or as a result of
such
transactions in conjunction with any other events, will be an “excess parachute
payment” within the meaning of Section 280G of the Code.
4.14.9 cVideo
has not received written notice of any pending, and to the Knowledge of the
Seller Parties there are no threatened, claims (other than claims for benefits
in the ordinary course), lawsuits or arbitrations that have been asserted
or
instituted against the cVideo Plans, any fiduciaries thereof with respect
to
their duties to the cVideo Plans, or the assets of any of the trusts under
any
of the cVideo Plans that would reasonably be expected to result in any material
liability of cVideo to the Pension Benefit Guaranty Corporation, the US
Department of Treasury, the US Department of Labor or any Multiemployer
Plan.
4.14.10 Section 4.14.10
of the cVideo Disclosure Schedule sets forth the names of all directors and
officers of cVideo, the names of each employee of cVideo, and the total current
salary, bonus eligibility, and fringe benefits and perquisites that each
such
director, officer and employee is expected to receive in the fiscal year
ending
December 31, 2005 based on current compensation arrangements.
Section 4.14.10 of the cVideo Disclosure Schedule also sets forth the
liability of cVideo for deferred compensation under any deferred compensation
plan, excess plan or similar arrangement (other than pursuant to Qualified
Plans) to each such director, officer and employee, together with the value,
as
of the date specified thereon, of the assets (if any) set aside in any grantor
trust(s) to fund such liabilities. There are no other forms of compensation
paid to any such director, officer or employee of cVideo. No officer, director,
or employee of cVideo, or any immediate family member of any of the foregoing,
provides or causes to be provided to cVideo any assets, services or facilities
and cVideo does not provide or cause to be provided to any such officer,
director, or employee, or any immediate family member of any of the foregoing,
any assets, services or facilities.
4.14.11 As
used
in this Agreement, the following terms have the meanings given
below:
(i) “Benefit
Obligation” means cVideo’s aggregate financial liability to provide all current,
projected and contingent benefits to an employee, or such employee’s
beneficiaries or dependents, as the case may be, under the terms of any of
the
cVideo Plans, regardless of whether an amount less than such aggregate financial
liability is reflected on cVideo’s financial statements under applicable
accounting rules.
(ii) “Controlled
Group Liability” means any and all liabilities (i) under Title IV of ERISA,
(ii) under section 302 of ERISA, (iii) under sections 412 and 4971 of
the Code, (iv) resulting from a violation of the continuation coverage
requirements of section 601 et seq. of ERISA and section 4980B of the Code
or
the group health plan requirements of Section 701 et seq. of ERISA, and
(v) under corresponding or similar provisions of foreign laws or
regulations, in each case other than pursuant to the cVideo Plans.
(iii) “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
(iv) “ERISA
Affiliate” means, with respect to any entity, trade or business, any other
entity, trade or business that is a member of a group described in
Section 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA that includes the first entity, trade or
business, or that is a member of the same “controlled group” as the first
entity, trade or business pursuant to Section 4001(a)(14) of ERISA. As of
the date hereof, cVideo has no ERISA Affiliates.
(v) “cVideo
Employee” means a person who is, as of the Closing Date, an active or inactive
employee of cVideo.
(vi) “cVideo
Plans” means all employee benefit plans, programs and other arrangements
providing benefits to any current or former employee, officer, director or
consultant (or any beneficiary or dependent thereof) in respect of services
provided to cVideo, and whether covering one person or more than one person,
sponsored or maintained by cVideo or to which cVideo contributes (or is
obligated to contribute) or has any liability. Without limiting the generality
of the foregoing, the term “cVideo Plans” includes each “employee pension
benefit plan” as defined in Section 3(2) of ERISA, each “employee
welfare benefit plan” as defined in Section 3(1) of ERISA, and each
agreement, plan, program, fund, policy, contract or arrangement (whether
written
or unwritten) providing compensation, benefits, pension, retirement,
superannuation, profit sharing, stock bonus, stock option, stock purchase,
phantom or stock equivalent, bonus, thirteenth month, incentive, deferred
compensation, hospitalization, medical, dental, vision, vacation, life
insurance, death benefit, sick pay, disability, severance, termination,
indemnity, redundancy pay, educational assistance, holiday pay, housing
assistance, moving expense reimbursement, fringe benefit or similar employee
benefits covering any employee, former employee, or the beneficiaries and
dependents of any employee or former employee, regardless of whether it is
mandated under local law, voluntary, private, funded, unfunded, financed
by the
purchase of insurance, contributory or non-contributory.
(vii) “Multiemployer
Plan” means a “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA. As of the date hereof, cVideo has no
Multiemployer Plans.
(viii) “Multiple
Employer Plan” means a plan that has two or more contributing sponsors at least
two of whom are not under “common control” within the meaning of
Section 4063 of ERISA. As of the date hereof, cVideo has no Multiple
Employer Plans.
(ix) “Qualified
Plan” means a “qualified plan” within the meaning of Section 401(a) of
the Code.
4.15 Contracts.
4.15.1 Section 4.15.1
of the cVideo Disclosure Schedule lists each, and cVideo has provided SYS
with correct and complete copies of each, Contract (“Contract” means all written
or oral contracts, agreements, guarantees, licenses and executory commitments,
other than cVideo Plans and real property leases) to which cVideo is a party
as
of the date hereof and which falls within any one or more of the following
categories:
(i) Contracts
not entered into in the ordinary course of cVideo’s business and that involve
expenditures or receipts by cVideo of $5,000 per month;
(ii) joint
venture, partnership, strategic alliances and other Contracts (however named)
involving a sharing of profits, losses, costs or liabilities;
(iii) leases
for equipment or other personal property assets;
(iv) Contracts
with respect to which cVideo received gross revenue of at least $10,000 from
the
date of its incorporation through September 30, 2005;
(v) Contracts
containing covenants purporting to limit the freedom of cVideo to compete
in any
line of business or in any geographic area or to hire any individual or group
of
individuals (including without limitation any software license agreements
that
authorize or permit cVideo to use the applicable software only in particular
business lines, languages, or geographic areas);
(vi) Contracts
providing for the settlement of disputed claims (including disputed dollar
amounts) with third parties;
(vii) powers
of
attorney that are currently outstanding;
(viii) Contracts
entered into other than in the ordinary course of business that contain or
provide for an express undertaking to be responsible for consequential
damages;
(ix) Contracts
which contain minimum purchase conditions in excess of $10,000 or requirements
or other terms that restrict or limit the purchasing relationships of cVideo;
(x) Contracts
relating to any outstanding commitment for capital expenditures in the aggregate
in excess of $25,000;
(xi) Contracts
with any labor organization, union, employee representative or group of
employees;
(xii) indentures,
mortgages, promissory notes, loan agreements, guarantees of borrowed money,
letters of credit or other agreements, instruments or commitments for the
borrowing or the lending of money;
(xiii) Contracts
providing for the creation of any Encumbrance upon any of the assets of
cVideo;
(xiv) Contracts
involving annual revenues to the business of cVideo in excess of 2.5% of
cVideo’s annual revenues during either of its past two fiscal years;
(xv) Contracts
providing for “earn-outs,”“savings guarantees,”“performance guarantees,” or
other contingent payments involving more than $10,000 per year or $50,000
over
the term of the Contract;
(xvi) Contracts
with or for the benefit of (A) any corporate affiliate of cVideo or
(B) any immediate family member of any shareholder, director or officer of
cVideo;
(xvii) Contracts
involving payments by cVideo of more than $5,000 in any one month during
the
past 6 months;
(xviii) any
Contracts that purport to limit the ability of the directors, officers, agents
or employees of cVideo to engage in or continue any conduct, activity or
practice relating to the business of cVideo, or assign to cVideo any rights
to
any invention, improvement or discovery;
(xix) any
cost-sharing, tax-sharing or transfer pricing agreements between cVideo and
any
related or unrelated party;
(xx) each
amendment, supplement and modification with respect to any of the foregoing;
and
(xxi) any
proposal to enter into any of the foregoing.
4.15.2 All
such
Contracts are valid, binding and enforceable obligations of cVideo and each
other party thereto.
4.15.3 Neither
cVideo nor any other party thereto is in violation of or in default in respect
of, nor, to the Knowledge of the Seller Parties, has there occurred an event
or
condition which with the passage of time or giving of notice (or both) would
constitute a default under or permit the termination of, any such Contract.
cVideo has not received a notice or other communication claiming a breach
on its
part of any Contract or a right of offset against amounts due it under any
Contract or a right of termination of any Contract. To the Knowledge of the
Seller Parties, no employee of cVideo has attempted to direct any Contract
to
any third party.
4.15.4 As
of the
date hereof, cVideo is not engaged in any renegotiation of and, to the Knowledge
of the Seller Parties, neither cVideo nor any third party thereto has any
outstanding rights to renegotiate, any material amounts paid or payable under
such Contracts.
4.16 Labor
Matters.
4.16.1 cVideo
is
not a party to any collective bargaining agreement or labor union contract
and
is not required to consult or negotiate with any local works council, union,
labor board or any Governmental Authority concerning the transactions
contemplated by the Agreement.
4.16.2 Set
forth
in Section 4.16.2 of the cVideo Disclosure Schedule is a list of each
agreement to which cVideo is a party pursuant to which any individual employed
by cVideo or otherwise performing services primarily for cVideo receives
compensation in excess of $20,000 per annum, and cVideo has furnished or
made
available to SYS complete and correct copies of any such agreements in writing.
cVideo has not breached or otherwise failed to comply with any provisions
of any
agreement set forth therein and, to the Knowledge of the Seller Parties,
there
are no grievances outstanding thereunder. There is no labor strike, dispute
or
stoppage pending or, to the Knowledge of the Seller Parties, threatened against
cVideo. To the Knowledge of the Seller Parties, no campaign or other attempt
for
recognition is pending by any labor organization or employee with respect
to
employees of cVideo.
4.16.3 cVideo
is
in compliance with Applicable Laws and its own policies respecting employment
and employment practices, terms and conditions of employment, wages and hours,
equal opportunity, equal pay, civil rights, labor relations, immigration,
occupational health and safety, and payroll and wage taxes.
4.16.4 As
of the
date of this Agreement and except as required by Applicable Law, (i) cVideo
is not a party to any outstanding employment agreements or contracts with
officers, managers and directors (or foreign equivalents) or cVideo Employees
that are not terminable at will, or that provide for the payment of any bonus
or
commission; and (ii) cVideo is not a party to any agreement, policy or
practice that will require it to pay termination or severance pay to salaried,
non-exempt or hourly cVideo Employees after the Closing.
4.16.5 To
the
Knowledge of the Seller Parties, no employee of cVideo currently intends
to
terminate his employment with cVideo.
4.17 Undisclosed
Liabilities.
cVideo
has no liabilities or obligations of any nature, whether absolute, accrued,
contingent, xxxxxx, inchoate or otherwise and whether due or to become due,
other than (a) liabilities disclosed to SYS in the cVideo Financial
Statements, and (b) liabilities contemplated by this Agreement and/or set
forth in the cVideo Disclosure Schedule.
4.18 Operation
of cVideo’s Business; Relationships.
4.18.1 Since
the
date of its incorporation, cVideo has not, except in the ordinary course
of
business consistent with past practice, engaged in any transaction which,
if
done after execution of this Agreement, would violate in any material respects
Section 5.3.1.
4.18.2 Since
January 1, 2005, no customer of cVideo has indicated to cVideo that such
customer will stop or decrease purchasing materials, products or services
from
cVideo and no supplier of cVideo has indicated to cVideo that such supplier
will
stop or decrease the supply of materials, products or services to
cVideo.
4.19 Permits.
cVideo
is in possession of all licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders legally required in each
jurisdiction to own, lease and operate its properties and to carry on its
business as currently conducted, including under any applicable Environmental
Laws (collectively, the “Permits”) except where the failure to have a Permit
would not have a material Adverse Effect on cVideo as a whole. cVideo has
not
received notice of any Action pending, and to the Knowledge of the Seller
Parties, no Action is threatened, regarding any of the Permits which, if
successful, would reasonably be expected to have a Material Adverse Effect
on
cVideo. cVideo is not in conflict with, or in default or violation of, any
of
the Permits, except for any such conflicts, defaults or violations which,
individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect on cVideo.
4.20 Real
Property.
4.20.1 cVideo
does not own any real property.
4.20.2 Section 4.20.2
in the cVideo Disclosure Schedule lists each lease for real property to
which cVideo is a party (each a “Lease”). cVideo does not sublease any real
property. cVideo has delivered to SYS a substantially correct and complete
copy
of each Lease. With respect to each Lease:
(i) the
Lease
is legal, valid, binding, enforceable, and in full force and effect with
respect
to cVideo, and, to the Knowledge of the Seller Parties, with respect to the
other party thereto, the Lease is legal, binding, enforceable, and in full
force
and effect;
(ii) no
party
to the Lease is in breach or default thereunder, and no event has occurred
which, with notice or lapse of time, would constitute a breach or default
or
permit termination, modification, or acceleration thereunder;
(iii) cVideo
has not, and to the Knowledge of the Seller Parties, no other party thereto
has,
repudiated any provision thereof;
(iv) cVideo
has not received written notice of any disputes with respect thereto, and
cVideo
is not party to any oral agreements or forbearance programs in effect as
to the
Lease;
(v) cVideo
has not assigned, transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold; and
(vi) to
the
Knowledge of the Seller Parties, the facility leased under the Lease has
received all approvals of Governmental Authorities (including Permits) required
to be received by cVideo in connection with the operation thereof and have
been
operated and maintained by cVideo in accordance with Applicable
Laws.
4.21 Environmental
Matters.
With
regard to environmental matters:
4.21.1 The
properties, operations and activities of cVideo are in compliance in all
material respects with all applicable Environmental Laws and all past
noncompliance of cVideo with any applicable Environmental Laws has been resolved
without any pending, ongoing or future obligation, cost or
liability;
4.21.2 cVideo
has not received notice of any pending Action by or before any court or
Governmental Authority under any Environmental Law, and to the Knowledge
of the
Seller Parties, no such Action is pending or threatened and there is no basis
for any present or future Action against it that may reasonably be likely
to
lead to any liability;
4.21.3 There
has
been no release, discharge or emission of any Hazardous Material into the
environment in material violation of applicable Environmental Laws by cVideo
in
connection with its currently leased or formerly leased properties or operations
that would be reasonably likely to have a Material Adverse Effect on cVideo;
and
4.21.4 There
has
been no material exposure in violation of applicable Environmental Laws of
any
person or property to any Hazardous Material in connection with the properties,
operations and activities of cVideo that would be reasonably likely to have
a
Material Adverse Effect on cVideo.
4.21.5 For
purposes of this Agreement, the term “Environmental Laws” means all federal,
state, local or foreign laws relating to pollution or protection of human
health
or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices, orders, permits, plans or regulations issued, entered, promulgated
or
approved thereunder.
4.21.6 For
purposes of this Agreement, the term “Hazardous Materials” means chemicals,
pollutants, contaminants, or industrial, toxic or hazardous substances or
wastes
as those terms are defined or identified in any Environmental Law or regulated
by any Permit required by applicable Environmental Law, including but not
limited to petroleum products or by-products, asbestos, and polychlorinated
materials.
4.22 Accounts
Receivable.
The
accounts and notes receivable reflected in the cVideo Financial Statements
(i) arose from bona fide sales transactions in the ordinary course of
business and are payable on ordinary trade terms, (ii) are legal, valid and
binding obligations of the respective debtors enforceable in accordance with
their terms, (iii) are not subject to valid set-off or counterclaim, and
(iv) are collectible in the ordinary course of business consistent with
past practice in the amounts recorded thereof.
4.23 Insurance.
Section 4.23 of the cVideo Disclosure Schedule lists all insurance
policies pursuant to which cVideo is presently insured and during each of
the
past three calendar years has been insured (each, an “Insurance Policy” and,
collectively, the “Insurance Policies”). Each Insurance Policy is, in all
material respects, in full force and effect in accordance with its terms
and all
premiums reflected on invoices received by cVideo to date have been paid
in
full. No written notice of cancellation with respect to any Insurance Policy
has
been received by cVideo and there is no existing default or event which,
with
the giving of notice or lapse of time or both, would constitute a default
thereunder. cVideo is a “named insured” or an “insured” under each Insurance
Policy. cVideo has not been refused any insurance, nor has the coverage of
cVideo been limited, by any insurance carrier to which it has applied for
insurance or with which it has carried insurance during the past three years.
The Insurance Policies are of the type and in the amounts that would reasonably
be expected to be maintained in the ordinary course of business for similarly
situated companies in the same or a similar industry.
4.24 Product
or Service Warranty.
Within
the three years prior to the date hereof: (a) each product or service sold
or delivered by cVideo has been in material conformity with any applicable
express and implied warranties, (b) cVideo has no current liability for
damages in connection with any such warranty (and there is no basis for any
present or future Action against it that may reasonably be likely to lead
to any
liability) and (c) no product or service sold or delivered by cVideo is
subject to any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale given by cVideo, if any, or as required
by
Applicable Law.
4.25 Data
Protection Matters.
4.25.1 cVideo
has not received notice of any existing or pending, and to the Knowledge
of the
Seller Parties, there is no threatened, Action against cVideo by or before
any
court or Governmental Authority under any Data Protection Law.
4.25.2 As
used
in this Agreement, the term “Data Protection Laws” means all federal, state,
local or foreign laws, statutes, orders, rules, regulations, policies or
guidelines, or judgments, decisions or orders entered by any Governmental
Authority, relating to Personal Data.
4.25.3 As
used
in this Agreement, the term “Personal Data” means any and all information that
cVideo maintains or otherwise processes that relates to an identified or
identifiable natural person, including employees, stockholders, customers,
customers of customers, vendors, contractors, and other business partners
of
cVideo, and any employees of or contractors to any of the
foregoing.
4.26 Foreign
Corrupt Practices Act.
4.26.1 cVideo
has not, to secure any improper advantage in order to obtain or retain business,
directly or indirectly offered, paid, given, or promised to pay, or authorized
the payment of, any money, offer, gift, or other thing of value,
to:
(i) an
officer or employee of any Governmental Authority, or any person acting in
an
official capacity for or on behalf of any Governmental Authority;
(ii) any
political party or official thereof;
(iii) any
candidate for political or political party office; or
(iv) any
other
individual or entity;
while
knowing or having reason to believe that all or any portion of such money
or
thing of value would be offered, given, or promised, directly or indirectly,
to
any person or entity listed in clauses (i) - (iii) above.
4.26.2 cVideo
maintains a system of internal accounting controls adequate to insure that
it
maintains no off-the-books accounts and that its assets are used only in
accordance with its management’s directives.
4.26.3 No
product sold or service provided by cVideo has been directly or indirectly
sold
to or performed on behalf of Cuba, Iraq, Iran, Libya, or Sudan.
4.27 Government
Contracts.
With
respect to any Governmental Authority Contracts, whether entered into by
cVideo
as a prime contractor or as a subcontractor, there is, as of the date of
this
Agreement, no (a) civil fraud or criminal investigation by any Governmental
Authority, (b) suspension or debarment proceeding (or equivalent
proceeding), (c) request by a Governmental Authority for a contract price
adjustment based on a claimed disallowance by the Defense Contract Audit
Agency
(or other applicable Governmental Authority) or claim of defective pricing,
(d) dispute between cVideo or any prime contractor of cVideo and a
Governmental Authority which, since the date of cVideo’s incorporation, has
resulted in a government contracting officer’s final decision where the amount
in controversy exceeds or is expected to exceed $10,000, (e) claim or
request for equitable adjustment by cVideo or any prime contractor of cVideo
against a Governmental Authority in excess of $10,000, or (f) any claim or
assertion by a Governmental Authority that cVideo or any prime contractor
of
cVideo may have violated applicable rules regarding conflicts of interest
or
statutes, rules or regulations regarding the integrity of the purchase
process.
4.28 Relations
with Governments.
Neither
cVideo, nor any director, officer, agent or employee of cVideo, has
(a) used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to political activity, (b) made any
unlawful payment or offered anything of value to foreign or domestic government
officials or employees or to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns,
(c) made any other unlawful payment, or (d) violated any applicable
export control, money laundering or anti-terrorism law or
regulation.
4.29 No
Existing Discussions.
As of
the date of this Agreement, cVideo is not engaged, directly or indirectly,
in
any negotiations or discussions with any other party with respect to an
acquisition of a controlling interest in cVideo or the assets of
cVideo.
4.30 Review
of SYS SEC Documents.
Each
Stockholder has had the opportunity to review the SYS SEC Documents and has
received from SYS any additional information which he or she has requested
in
connection with the execution, delivery, and performance of this Agreement.
Each
Stockholder, by reason of his or her business or financial experience, has
the
capacity to protect his or her own interests in connection with the transactions
described in this Agreement.
4.31 Interested
Party Transactions.
Other
than as set forth on Schedule 4.31, to the Knowledge of the Seller Parties,
no officer or director of cVideo (nor any person related by blood or marriage
or
other person in which any such person has or has had an interest) has or
has
had, directly or indirectly (i) any interest in any entity that furnished
or sold, or furnishes or sells, services or products that cVideo furnishes
or
sells, or proposes to furnish or sell, or (ii) any interest in any entity
that purchases from or sells or furnishes to cVideo any goods or services,
or
(iii) any beneficial interest in any contract, agreement, or commitment of
cVideo; provided, however, that ownership of no more than 2.5% of the
outstanding voting stock of a publicly traded corporation and no more than
5% of
the outstanding equity of any other entity shall not be deemed an “interest in
any entity” for purposes of this Section 4.31. Schedule 4.31 contains
a description of all indebtedness which currently exists, and any transactions
which have occurred since January 1, 2005, between cVideo and any
stockholder, director, or officer of cVideo.
4.32 Board
Recommendation.
The
board of directors of cVideo has (i) determined that this Agreement and the
transactions contemplated herein, including the Acquisition, are fair to
and in
the best interests of the stockholders of cVideo, and (ii) resolved to
recommend to the stockholders of cVideo that such holders approve this Agreement
and the transactions contemplated herein, including the Acquisition (the
“Acquisition Board Recommendation”).
4.33 Payments
to Stockholders and Others.
Since
January 1, 2005, cVideo has not paid any bonus or made any other payment
(other than customary payments of salary, directors’ fees, and business expense
reimbursements in the ordinary course of business) to any officer or director
of
cVideo. Since January 1, 2005, cVideo has not made any distribution to or
for the benefit of any shareholder of cVideo.
4.34 Disclosure.
This
Article IV, as modified by the cVideo Disclosure Schedule, does not contain
a material misstatement of fact or omit to state of fact necessary to make
the
facts which are stated herein, taken as a whole, not materially
misleading.
ARTICLE
V
COVENANTS
OF THE PARTIES
5.1 Mutual
Covenants.
5.1.1 Reasonable
Efforts; Notification
(i) Each
of
the parties agrees to use all commercially reasonable efforts to take, or
cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement, including
(A) the obtaining of all other necessary actions or nonactions, waivers,
consents, licenses, permits, authorizations, orders and approvals from
Governmental Authorities and the making of all other necessary registrations
and
filings (including other filings with Governmental Authorities, if any),
(B) the obtaining of all consents, approvals or waivers from third parties
set forth in Schedule 4.5 of the cVideo Disclosure Schedule, and
(C) the execution and delivery of any additional instruments necessary to
consummate the transaction contemplated by this Agreement.
(ii) Notwithstanding
anything to the contrary in this Agreement, (A) neither SYS nor any of its
subsidiaries shall be required to hold separate (including by trust or
otherwise) or to divest any of their respective businesses or assets, or
to take
or agree to take any action or agree to any limitation that could reasonably
be
expected to have a Material Adverse Effect on SYS after the Closing,
(B) prior to the Closing, cVideo shall not be required to hold separate
(including by trust or otherwise) or to divest any of their respective
businesses or assets, or to take or agree to take any other action or agree
to
any limitation that could reasonably be expected to have a Material Adverse
Effect on cVideo, (C) no party shall be required to take any action that
would reasonably be expected to substantially impair the benefits expected,
as
of the date hereof, to be realized by such party from consummation of the
Acquisition and (D) no party shall be required to waive any of the
conditions to the Closing set forth in Article VI as they apply to such
party.
5.1.2 Public
Announcements.
The
initial press release concerning the transactions contemplated hereby shall
be a
joint press release and shall be issued, upon the mutual agreement of cVideo
and
SYS, on or after the date of this Agreement. SYS and cVideo shall consult
with
each other before issuing, and give each other the opportunity to review
and
comment upon, any other press release or public statements with respect to
the
transactions contemplated by this Agreement, and shall not issue any such
press
release or make any such public statement prior to such consultation, except
as
may be required by Applicable Law, court process or by obligations pursuant
to
any listing agreement of SYS with any national securities exchange or national
securities quotation system.
5.1.3 Notices
of Certain Events.
Each
party hereto shall promptly notify the other parties in writing of:
(i) the
receipt by such party of any notice or other communication from any person
alleging that the consent of such person is or may be required in connection
with the transactions contemplated by this Agreement;
(ii) subject
to any applicable legal restrictions, the receipt by such party of any notice
or
other communication from any Governmental Authority in connection with the
transactions contemplated by this Agreement;
(iii) such
party’s obtaining knowledge of any Actions commenced or threatened against,
relating to or involving or otherwise affecting the other party hereto, as
the
case may be, which relate to the consummation of the transactions contemplated
by this Agreement; and
(iv) such
party’s obtaining knowledge of the occurrence, or failure to occur, of any event
which occurrence or failure to occur will be likely to cause the conditions
set
forth in Article VI not to be satisfied; provided,
however,
that no
such notification shall affect the representations, warranties or obligations
of
the parties or the conditions to the obligations of the parties hereunder,
or
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
5.1.4 Notification.
Between
the date of this Agreement and the Closing Date, each party hereto shall
promptly notify the other parties hereto in writing if such party becomes
aware
of any fact or condition that causes or constitutes a breach in any of its
representations and warranties as of the date of this Agreement or any other
date applicable to a representation or warranty as set forth herein. Should
any
such fact or condition require any change in the cVideo Disclosure Schedule,
cVideo shall promptly deliver to SYS a written statement specifying such
change.
The election by SYS to close the Acquisition after receipt of any such changes
shall be deemed to be SYS’ acceptance of such change to the cVideo Disclosure
Schedule. Such delivery will not affect any rights of any party under any
other
provision of this Agreement. During the same period, each party shall promptly
notify the other parties in writing if such party becomes aware of the
occurrence of any breach of any covenant of such party in this Agreement
or the
occurrence of any event that may make the satisfaction of the conditions
in
Article 6 impossible or unlikely.
5.2 Covenants
of SYS.
5.2.1 Employees
and Employee Benefits.
From
and after the Closing, each cVideo employee who becomes an SYS employee shall,
from the date of such employment, be entitled to participate in all SYS employee
benefit plans in a manner and to the extent consistent with their position.
From
and after the Closing, SYS shall exercise commercially reasonable efforts
to
treat all service by such cVideo employees with cVideo prior to the Closing
for
all purposes as service with SYS (except for purposes of benefit accrual
under
defined benefit pension plans or to the extent such treatment would result
in
duplicative accrual on or after the Closing Date of benefits for the same
period
of service), and, with respect to any medical or dental benefit plan in which
such cVideo Employees participate after the Closing Date, SYS shall exercise
its
best efforts to waive or cause to be waived any pre-existing condition
exclusions and actively-at-work requirements (provided,
however,
that no
such waiver shall apply to a pre-existing condition of any such cVideo Employee
who was, as of the Closing, excluded from participation in a cVideo Plan
by
virtue of such pre-existing condition), and shall exercise its best efforts
to
provide that any covered expenses incurred on or before the Closing during
the
plan year of the applicable cVideo Plan in which the Closing Date occurs
by
such a cVideo Employee or such a cVideo Employee’s covered dependent shall be
taken into account for purposes of satisfying applicable deductible, coinsurance
and maximum out-of-pocket provisions after the Closing Date to
the
same extent as such expenses are taken into account for the benefit of similarly
situated employees of SYS and subsidiaries of SYS.
5.2.2 Registration.
(i) SYS
will
use commercially reasonable efforts to file a resale registration statement
(the
“Registration Statement”) with the SEC with regard to all shares of SYS Common
Stock issued or issuable pursuant hereto, for the benefit of cVideo or its
assignees (each, a “Holder”), by March 31, 2006 (provided, however, that if
business exigencies require a delay in such filing, the deadline shall be
extended to February 28, 2007), and thereafter use commercially reasonable
efforts to prosecute the Registration Statement to effectiveness. Following
the
effectiveness of the Registration Statement, and through the twelve month
anniversary of the final issuance of SYS Common Stock pursuant to
Section 2.2.2 hereof (the “Registration Period”), SYS will not voluntarily
terminate the registration and, to the extent that the Registration Statement
or
the prospectus which is a part thereof requires amendment or supplement under
the Securities Act of 1933, as amended (the “Act”) and the rules adopted
thereunder, will exercise reasonable commercial efforts to keep such
Registration Statement effective, including, without limitation, expeditiously
amending or supplementing such Registration Statement, including the prospectus
which is a part thereof.
(ii) At
any
time following the first issuance of SYS Common Stock under Section 2.2.2
and continuing until the end of the Registration Period that the Registration
Statement described in Section 5.2.2(i) has not been filed and SYS
determines to register any of its SYS Common Shares, or to amend any filed
registration which is not yet effective, either for its own account or for
the
account of a holder of SYS Common Shares or as a result of a holder of SYS
Common Shares exercising demand registration rights, other than a registration
(A) relating solely to SYS Common Shares registered on Form S-4 or
Form S-8 (or any successor forms), or (B) with respect to which the
SYS Common Shares held by the cVideo Stockholders would not be legally permitted
to be included, then SYS shall:
(A) at
least
15 days prior to the filing of a Registration Statement, other than as set
forth
in (ii)(A) or (B) above, promptly give cVideo and/or each stockholder of
cVideo
holding SYS shares (each, an “Eligible Stockholder”) written notice thereof by
registered or certified mail, courier or personal delivery; provided that
no
such notice shall be required in a non-underwritten registration, and all
of
such stock shall be registered thereon; and
(B) use
commercially reasonable efforts to include in such registration (and any
related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all of the SYS Common Shares held by such Eligible Stockholder
(the “Registrable Securities”) specified in a written request or requests, made
within ten (10) days after receipt of such written notice from SYS by any
Eligible Stockholder but only to the extent that such inclusion does not
diminish the number of securities included by a holder of SYS Common Shares
who
has demanded such registration.
(iii) If
the
registration of which SYS gives notice is for a registered public offering
involving an underwriting, SYS will so advise the Eligible Stockholders as
part
of the written notice given pursuant to subsection (ii)(A) above. In such
event the right of any Eligible Stockholder to registration pursuant to
subsection (ii) above shall be conditioned upon such Eligible Stockholder’s
participation in such underwriting and the inclusion of such Eligible
Stockholder’s Registrable Securities in the underwriting to the extent provided
herein. The Eligible Stockholders proposing to distribute their Registrable
Securities through such underwriting shall (together with SYS and the other
holders of SYS Common Shares distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with
the
managing underwriter selected for such underwriting by SYS (or by the holders
of
SYS Common Shares who have demanded such registration). Notwithstanding any
other provision of this Section 5.2.2, if the managing underwriter
determines that marketing factors require a limitation of the number of SYS
Common Shares to be underwritten, the managing underwriter may limit the
number
of SYS Common Shares to be included in such registration. SYS will so advise
the
Eligible Stockholders and any other holder of SYS Common Shares distributing
their SYS Common Shares through the underwriting pursuant to piggyback
registration rights similar to this Section 5.2.2, and the number of SYS
Common Shares to be registered and other securities that may be included
in the
registration and underwriting shall be allocated among all stockholders in
proportion, as nearly as practicable, to the respective amounts of registrable
securities held by such stockholders and other securities held by other holders
at the time of filing the registration statement. If any Eligible Stockholder
disapproves of the terms of any such underwriting, he or she may elect to
withdraw therefrom by written notice to SYS and the managing underwriter.
Any
Registrable Securities excluded or withdrawn from such underwriting shall
be
withdrawn from registration, and shall not be transferred in a public
distribution prior to ninety (90) days after the effective date of the
registration statement relating thereto.
(iv) SYS
shall
provide to each Eligible Stockholder a suitable number of prospectuses, and
supplements thereto, as soon as possible following the effectiveness of the
registration or the filing of the supplement, as the case may be.
(v) SYS
shall
have the right to terminate or withdraw any registration initiated by it
under
Section 5.2.2 prior to the effectiveness of such registration, but without
prejudice to its obligation pursuant to this Section 5.2.2.
(vi) SYS
shall
bear the expenses associated with the registration of Registrable Securities
pursuant to this Section 5.2.2 exclusive of underwriters’ and brokers’
discounts and commissions and expenses of the Stockholders’ legal
counsel.
5.3 Covenants
of cVideo.
cVideo
agrees and warrants that:
5.3.1 Conduct
of cVideo’s Operations.
During
the period from the date of this Agreement to the Closing Date, or the date,
if
any, on which this Agreement is earlier terminated pursuant to Section 7.1,
and except as may otherwise be agreed in writing by the parties, cVideo shall
conduct its operations in the ordinary course of business consistent with
past
practice, except as expressly contemplated by this Agreement, and shall use
its
commercially reasonable efforts to maintain and preserve its business
organization and its rights and franchises and to retain the services of
its
officers and key employees and maintain relationships with customers, suppliers,
lessees, licensees and other third parties, and to maintain all of its operating
assets in their current condition (normal wear and tear excepted). Without
limiting the generality of the foregoing, during the period from the date
of
this Agreement to the Closing Date, or the date, if any, on which this Agreement
is earlier terminated pursuant to Section 7.1, cVideo shall not, except as
otherwise expressly contemplated by this Agreement and the transactions
contemplated hereby or with the prior written consent of SYS:
(i) directly
or indirectly sell, transfer, lease, pledge, mortgage, encumber or otherwise
dispose of any of its property or assets other than in the ordinary course
of
business consistent with past practice;
(ii) adopt
or
propose any changes in the cVideo Articles or the cVideo Bylaws, other than
as
such amendments to the rights, privileges and preferences to the Series 1
or Series 2 Preferred Stock as may be necessary or desirable to obtain
consent to the Acquisition;
(iii) merge
or
consolidate with any other person;
(iv) acquire
a
material amount of assets or capital stock of any other person outside of
the
ordinary course of business consistent with past practice;
(v) make
any
borrowings, incur, create, assume or otherwise become liable for any
indebtedness for borrowed money or assume, guarantee, endorse or otherwise
as an
accommodation become responsible or liable for the obligations of any other
individual, corporation or other entity, other than in the ordinary course
of
business, consistent with past practice;
(vi) create
any subsidiaries;
(vii) enter
into or modify any employment, severance, termination or similar agreements
or
arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, any officer, director, consultant or employee other than
pursuant to Applicable Law or contractual commitments existing as of the
date
hereof in the ordinary course of business consistent with past practice
(provided past practices shall not be deemed to include actions taken in
connection with the Acquisition) or grant any increase in the compensation
or
benefits of directors, officers, employees, consultants or agents of cVideo
or
grant, re-price, or accelerate the exercise or payment of any cVideo options
or
warrants or other equity-based awards other than increases in the ordinary
course of business consistent with past practice;
(viii) enter
into, adopt or amend any cVideo Plan, except as may be required by Applicable
Law;
(ix) take
any
action that could give rise to severance benefits payable to any officer
or
director of cVideo as a result of consummation of the transactions contemplated
by this Agreement;
(x) change
any method or principle of accounting in a manner that is inconsistent with
past
practice except to the extent required by generally accepted accounting
principles as advised by cVideo’s regular independent accountants;
(xi) settle
any Actions, whether now pending or hereafter made or brought involving,
individually or in the aggregate, an amount in excess of $50,000 other than
settlement in the ordinary course of business or in accordance with their
terms,
of liabilities disclosed, reflected or reserved against in the most recent
cVideo financial statements (or the notes thereto) or incurred since the
date of
such financial statements in the ordinary course of business;
(xii) modify,
extend, amend or terminate, or waive, release or assign any rights or claims
with respect to, any Contract set forth in Section 4.15 in the cVideo
Disclosure Schedule;
(xiii) enter
into any confidentiality agreements or arrangements other than in the ordinary
course of business consistent with past practice;
(xiv) write
up,
write down or write off the book value of any assets, individually or in
the
aggregate, in excess of $20,000 except for depreciation and amortization
in
accordance with generally accepted accounting principles consistently
applied;
(xv) incur
or
commit to any capital expenditures in excess of $5,000 individually or $10,000
in the aggregate, excluding capital expenditures provided for or contemplated
by
the capital budget approved by cVideo’s board of directors prior to the date
hereof and as set forth in Section 5.3(b)(xvi) in the cVideo Disclosure
Schedule;
(xvi) make
any
payments in respect of policies of directors’ and officers’ liability insurance
(premiums or otherwise) other than premiums paid in respect of its current
or
renewed or replacement policies;
(xvii) take
any
other action that could likely result in the representations and warranties
set
forth in Article IV becoming false or inaccurate in any material
respect;
(xviii) enter
into or carry out any other transaction other than in the ordinary and usual
course of business;
(xix) make
or
revoke any Tax election, file any amended Tax Return, or settle any audit
or
other proceeding with any Tax authority;
(xx) enter
into any agreement to purchase, or to lease for a term in excess of one year,
any real property, provided that cVideo (A) may, as a tenant, or a
landlord, renew any existing lease for a term not to exceed eighteen months
and
(B) nothing herein shall prevent cVideo, in its capacity as landlord, from
renewing any lease pursuant to an option granted prior to the date hereof;
or
(xxi) agree
in
writing or otherwise to take any of the foregoing actions.
5.3.2 Access
to Information; Confidentiality.
Upon
reasonable notice, cVideo shall afford to the officers, employees, accountants,
counsel, financial advisors and other representatives of SYS reasonable access
during normal business hours, during the period prior to the Closing Date,
to
such of its properties, books, contracts, commitments, records, all other
information and data, officers and employees as SYS may reasonably request
and,
during such period, cVideo shall furnish promptly to SYS (a) a copy of each
report, schedule, and other document filed, published, announced or received
by
it during such period pursuant to the requirements of Applicable Laws (other
than documents which such party is not permitted to disclose under Applicable
Laws), and (b) consistent with its legal obligations, all other information
concerning it and its business, properties and personnel as SYS may reasonably
request; provided,
however,
that
cVideo may restrict the foregoing access to the extent that it reasonably
concludes, after consultation with outside legal counsel, that (i) any
Applicable Law requires cVideo to restrict access to any properties or
information, (ii) providing such access would result in the loss of the
attorney-client privilege, (iii) such documents discuss the pricing or
dollar value of the transactions contemplated by this Agreement, (iv) such
documents contain competitively sensitive information, the sharing of which
could constitute a violation of any applicable antitrust laws or (v) such
disclosure is reasonably likely to result in a breach of or default under
any
contract or agreement to which cVideo is a party. Each party shall make all
commercially reasonable efforts to minimize disruption to the business of
the
other party and its subsidiaries which may result from the requests for data
and
information hereunder. All requests for access and information shall be
coordinated through senior executives of the parties to be
designated.
5.3.3 No
Solicitation.
Until
the termination of this Agreement:
(i) cVideo
will not, and will not permit or cause any of its directors or officers of
cVideo, and will direct cVideo’s employees, agents and representatives not to,
directly or indirectly, solicit, initiate, encourage, or furnish or disclose
non-public information in furtherance of, or otherwise facilitate any inquiries
that may be reasonably expected to lead to, the making of any proposal or
offer
with respect to a merger, reorganization, share exchange, consolidation,
or
similar transaction involving, or any purchase of 10% or more of the assets
or
any equity of, cVideo or any other business combination other than the
transactions contemplated by this Agreement (any such proposal or offer,
an
“Acquisition Proposal”).
(ii) cVideo
will not, and will not permit or cause any of its officers or directors to,
and
shall direct its employees, agents and representatives not to, directly or
indirectly, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating
to an
Acquisition Proposal, whether such Acquisition Proposal arises or has arisen
before or after the date of this Agreement, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal.
(iii) cVideo
will immediately cease all existing activities, discussions and negotiations
with any parties conducted heretofore with respect to any Acquisition Proposal
and request the return of all confidential information regarding such party
provided to any such parties prior to the date hereof pursuant to the terms
of
any confidentiality agreements or otherwise. cVideo will notify SYS immediately
if any such inquiries, proposals, or offers are received by, any such
information is requested from, or any such discussions or negotiations are
sought to be initiated or continued with, any of its representatives indicating,
in connection with such notice, the name of such person and the material
terms
and conditions of any proposals or offers and thereafter shall keep SYS
informed, on a reasonably current basis, on the status and terms of any such
proposals or offers and the status of any such negotiations or
discussions.
5.3.4 Unfair
Competition.
For a
period of two (2) years after the Closing Date, cVideo, Tumini, Xxxxxx and
Xxxxxxxx (the “Covenanting Stockholders”) agree that he or she will not, without
the prior written consent of SYS, directly or indirectly (whether on his
or her
own behalf or as an owner, parent, stockholder, partner, joint venturer,
investor, member, officer, director, agent, independent contractor, associate,
executive, consultant or licensor) compete with the Business anywhere within
California and all other states in which cVideo has offices or customers
as of
the Closing Date (the “Territory”) by carrying on, being engaged in, or taking
part in the Business in any manner, provided that Tumini may provide
applications and products not competitive with the Business.
(i) For
a
period of two (2) years after the Closing Date, cVideo and the Covenanting
Stockholders agree that he or she will not, without the prior written consent
of
SYS, directly or indirectly (whether on his or her own behalf or as an owner,
parent, stockholder, partner, joint venturer, investor, member, officer,
director, agent, independent contractor, associate, executive, consultant
or
licensor) (1) accept Business, whether solicited or not, from any current
or future customer or client of cVideo or its subsidiaries and affiliates,
and
(2) solicit, divert, take away, or attempt to solicit, divert, take away,
any prospective or current customer, client, supplier, or distributor of
cVideo
or its subsidiaries and affiliates, with whom he had material business contact,
for the purpose of competing in the Business with SYS or its subsidiaries
and
affiliates.
(ii) For
a
period of two (2) years after the Closing Date, cVideo and each Stockholder
agree that he or she will not, directly or indirectly (whether on his or
her own
behalf or as an owner, parent, stockholder, partner, joint venturer, investor,
member, officer, director, agent, independent contractor, associate, executive,
consultant or licensor) solicit or encourage to leave the employ of SYS or
its
subsidiaries any employee or independent contractor of the cVideo division
of
SYS.
(iii) cVideo
and each Covenanting Stockholder acknowledge that the restrictions and covenants
set forth above are reasonably necessary to protect the goodwill and other
legitimate business interests of SYS and its subsidiaries, including the
goodwill acquired by SYS as a consequence of the closing of the Acquisition
described in this Agreement, and are not overbroad, overlong, or unfair
(including in duration and scope). Each Covenanting Stockholder also
acknowledges that any breach of these covenants would cause SYS serious,
irreparable injury or loss.
(iv) cVideo
and each Stockholder agree that SYS (or its subsidiaries or affiliates) will
be
entitled to immediate injunctive relief for any breach or threatened breach
of
this Section 5.3.5, and that a restraining order and/or an injunction may
be issued against each Stockholder, in addition to any other rights or remedies
at law SYS (or its subsidiaries or affiliates) may have.
(v) SYS
acknowledges and agrees that Xxxxxxxx is a member of the board of directors
of
QUALCOMM, Inc. (“QUALCOMM”) and Resmed, Inc. (“Resmed”), and an officer of a
subsidiary of QUALCOMM, and nothing in this Agreement shall in any manner
be
deemed to prohibit or restrict his involvement with QUALCOMM, Resmed or their
respective subsidiaries or affiliates.
5.3.5 cVideo
Stockholders Meeting.
cVideo
shall take all actions required by applicable law, the cVideo Articles and
the
cVideo Bylaws to duly call, give notice of, convene and hold a special meeting
of cVideo stockholders (the “cVideo Stockholders Meeting”), or to cause an
action by written consent by the holders of a majority of each outstanding
class
of cVideo capital stock (and thereafter to provide any required notice of
such
action to be provided), on the earliest practicable date to consider and
vote
upon approval of this Agreement and the transactions contemplated
hereby.
5.3.6 Cubic
Covenant.
Effective as of the Closing, Cubic agrees to forever waive, discharge and
release all of its rights under that Royalty Agreement dated August 31,
1999 with cVideo.
ARTICLE
VI
CONDITIONS
6.1 Conditions
to the Obligations of Each Party.
The
obligations of SYS, cVideo and the Stockholders to consummate this Agreement
shall be subject to the satisfaction or waiver of the following conditions:
6.1.1 This
Agreement and the transactions contemplated hereby shall have been approved
and
adopted by the holders of each class of cVideo capital stock in the manner
required by applicable law.
6.1.2 No
provision of any Applicable Law or regulation and no judgment, injunction,
order, decree, ruling, assessment or arbitration award of any Governmental
Authority or arbitrator and any Contract with any Governmental Authority
pertaining to compliance with Applicable Law shall prohibit or enjoin the
consummation of the transactions contemplated by this Agreement or limit
the
ownership or operation by SYS, cVideo or any of their respective subsidiaries
of
any material portion of the businesses or assets of SYS or cVideo.
6.1.3 There
shall not be pending any Action (i) challenging or seeking to restrain or
prohibit the consummation of transactions contemplated by this Agreement,
(ii) seeking to prohibit or limit the ownership or operation by SYS, cVideo
or any of their respective subsidiaries of, or to compel SYS, cVideo or any
of
their respective subsidiaries to dispose of or hold separate, any material
portion of the business or assets of SYS, cVideo or any of their respective
subsidiaries, as a result of the transactions contemplated by this Agreement,
(iii) seeking to impose limitations on the ability of SYS to acquire or
hold, or exercise full rights of ownership of, any shares of capital stock
of
cVideo or (iv) seeking to prohibit SYS or any Subsidiary of SYS from
effectively controlling in any material respect the business or operations
of
SYS or the subsidiaries of SYS.
6.1.4 The
Board
of Directors of SYS shall have determined that this Agreement and the
transactions contemplated hereby are fair to and in the best interests of
SYS
and the SYS Stockholders and shall have ratified and approved the execution,
delivery, and performance of this Agreement.
6.2 Conditions
to Obligations of cVideo
and the Stockholders.
The
obligations of cVideo and the Stockholders to consummate the transactions
contemplated hereby shall be subject to the fulfillment of the following
conditions unless waived by cVideo:
6.2.1 Each
of
the representations and warranties of SYS contained in this Agreement shall
be
true and correct in all material respects (but without regard to any materiality
qualifications or references to Material Adverse Effect contained in any
specific representation or warranty), in each case on the date of this Agreement
and on and as of the Closing Date as though made on and as of the Closing
Date
(except for representations and warranties made as of some other specified
date,
in which case as of such specified date), except where any such failure of
the
representations and warranties to be true and correct, individually or in
the
aggregate, could not reasonably be expected to have a Material Adverse Effect
on
SYS, cVideo or the transactions contemplated by this Agreement.
6.2.2 SYS
(i) shall have performed or complied in all material respects with all
agreements and covenants required to be performed by it under this Agreement
at
or prior to the Closing Date that are qualified as to Material Adverse Effect
and (ii) shall have performed or complied in all material respects with all
agreements and covenants required to be performed by it under this Agreement
at
or prior to the Closing that are not qualified as to Material Adverse Effect
except where such non-performance or non-compliance individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect
on
SYS.
6.2.3 SYS
shall
have furnished the Stockholders with a certificate dated the Closing Date
signed
on behalf of it by the Chairman, President or any Vice President to the effect
that the conditions set forth in Sections 6.2.1 and 6.2.2 have been
satisfied.
6.2.4 Since
the
date of this Agreement, there shall not have been any change in the assets,
liabilities, business prospects, results of operations or financial condition
of
SYS that would constitute a Material Adverse Effect on SYS as of the Closing
Date.
6.3 Conditions
to Obligations of SYS.
The
obligations of SYS to consummate the transactions contemplated hereby shall
be
subject to the fulfillment of the following conditions unless waived by SYS:
6.3.1 Each
of
the representations and warranties of cVideo and the Stockholders contained
in
this Agreement shall be true and correct in all material respects (but without
regard to any materiality qualifications or references to Material Adverse
Effect contained in any specific representation or warranty), in each case,
on
the date of this Agreement and on and as of the Closing Date as though made
on
and as of the Closing Date (except for representations and warranties made
as of
some other specified date, in which case, as of such specified date), except
where any such failure of the representations and warranties to be true and
correct would not reasonably be expected to have a Material Adverse Effect
on
cVideo, SYS or the transactions contemplated by this Agreement.
6.3.2 cVideo
and the Stockholders (i) shall have performed or complied in all material
respects with all agreements and covenants required to be performed by each
of
them under this Agreement at or prior to the Closing that are qualified as
to
Material Adverse Effect, (ii) shall have performed or complied in all
material respects with all agreements and covenants required to be performed
by
them under this Agreement at or prior to the Closing that are not qualified
as
to Material Adverse Effect except where such non-performance or non-compliance
would not reasonably be expected to have a Material Adverse Effect on cVideo,
and (iii) the Board of Directors of cVideo and the majority of the
stockholders of cVideo by class shall have approved the execution, delivery,
and
performance of this Agreement.
6.3.3 cVideo
and the Stockholders shall have furnished SYS with a certificate dated the
Closing Date to the effect that the conditions set forth in Sections 6.3.1
and 6.3.2 have been satisfied.
6.3.4 Since
the
date of this Agreement, except as set forth in Section 4.10 of the cVideo
Disclosure Schedule delivered as of such date, there shall not have been
any
change in the assets, liabilities, business prospects, results of operations
or
financial condition of cVideo that would constitute a Material Adverse Effect
on
cVideo as of the Closing Date.
6.3.5 All
consents, approvals, and waivers set forth in Section 4.5 of the cVideo
Disclosure Schedule shall have been obtained by cVideo or waived by SYS.
6.3.6 Effective
as of the Closing Date, SYS shall have entered into an employment agreement
and
consulting agreement with Xxxxxx and Tumini, respectively, which agreements
shall be satisfactory in form and substance to SYS.
6.3.7 cVideo
shall have provided SYS with a balance sheet of cVideo, dated as of the Closing
Date, which shall be certified by the Chief Executive Officer and Chief
Financial Officer of cVideo.
6.3.8 cVideo
shall have obtained the agreement of Arden Realty to a termination of its
office
lease as of not later than March 31, 2006, on terms satisfactory to SYS,
and cVideo shall have reached a settlement with the trustee of the Mosler
bankruptcy requiring a payment by cVideo of not more than $50,000.
ARTICLE
VII
TERMINATION
AND AMENDMENT
7.1 Termination.
This
Agreement may be terminated prior to the Closing Date:
7.1.1 By
mutual
written consent of SYS, cVideo and the Stockholders;
7.1.2 By
SYS,
on the one hand, or cVideo and Stockholders, on the other hand:
(i) If
there
shall be any law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited, or if any judgment,
injunction, order or decree of a court or other competent Governmental Authority
enjoining SYS or the Stockholders from consummating the transactions
contemplated hereby shall have been entered and such judgment, injunction,
order
or decree shall have become final and nonappealable;
(ii) If
the
transactions contemplated hereby shall not have been consummated before
December 1, 2005; provided, however, that the right to terminate this
Agreement under this Section 7.1.2 shall not be available to any party
whose failure to perform any material covenant or obligation under this
Agreement has been the cause of or resulted in the failure of the transactions
contemplated hereby to occur on or before such date; or
7.1.3 By
SYS if
cVideo or any Stockholder has breached any of his or her representations
and
warranties in Article IV of this Agreement and as a result thereof, the
condition set forth in Section 6.3.1 could not be satisfied;
7.1.4 By
SYS if
there has been any change in the assets, liabilities, business prospects,
results of operations or financial condition of cVideo that would constitute
a
Material Adverse Effect on cVideo;
7.1.5 By
cVideo
and the Stockholders if SYS shall have breached any of its representations
and
warranties in Article III of this Agreement and as a result thereof, the
condition set forth in Section 6.2.1 could not be satisfied; or
7.1.6 By
cVideo
and the Stockholders if there has been any change in the assets, liabilities,
business prospects, results of operations or financial condition of SYS that
would constitute a Material Adverse Effect on SYS.
7.2 Effect
of Termination.
In the
event of the termination of this Agreement pursuant to Section 7.1, this
Agreement, except for the second sentence of Section 5.1.2 and
Section 5.3.2, shall become void and have no effect, without any liability
on the part of any party or such party’s directors, officers or stockholders.
Notwithstanding the foregoing, nothing in this Section 7.2 shall relieve
any party to this Agreement of liability for a material breach of any provision
of this Agreement.
ARTICLE
VIII
GENERAL
SURVIVAL
AND INDEMNIFICATION
8.1 Survival
of Representations and Warranties.
8.1.1 The
representations, warranties, covenants and agreements made herein by cVideo
and
the Stockholders shall survive, irrespective of any different survival period
under any applicable statute of limitation, until September 30, 2007 (the
“Cut-Off Date”).
8.1.2 Irrespective
of any different survival period under any applicable statute of limitations,
the representations, warranties, covenants and agreements made herein by
SYS
shall survive until the Cut-Off Date.
8.1.3 This
Section 8.1 shall not limit any covenant or agreement of the parties
hereto, which by its terms contemplates performance after the Closing or
after
the termination of this Agreement.
8.1.4 Notwithstanding
any right of SYS to investigate the affairs of cVideo or of the Stockholders
to
investigate the affairs of SYS, SYS shall have the right to rely fully upon
the
representations, warranties, covenants and agreements contained in this
Agreement, or in any instrument required to be delivered pursuant to this
Agreement, and cVideo and the Stockholders shall have the right to rely fully
upon the representations, warranties, covenants, and agreements of SYS contained
in this Agreement or in any such instrument. No information or knowledge
obtained by a party hereto in an investigation conducted by such party shall
affect or be deemed to modify any representation or warranty of any other
party
contained herein or the conditions to the obligations of the parties to
consummate the transactions contemplated by this Agreement. The right to
any
remedy based on a breach of the representations, warranties, covenants, and
obligations of another party, will not be affected by any investigation
conducted by a party with respect to, or any knowledge acquired (or capable
of
being acquired) at any time, whether before or after the execution and delivery
of this Agreement or the Closing Date, about an accuracy or inaccuracy of
or
compliance with, any representation, warranty, covenant or obligation of
any
other party.
8.2 Indemnification.
From
and after the Closing, cVideo and the Stockholders, jointly and severally,
shall
indemnify, defend (with counsel reasonably acceptable to SYS) and hold SYS
and
its subsidiaries and their respective officers, directors, shareholders,
affiliates, employees, agents and other representatives (the “SYS Indemnified
Parties”), harmless from and against any and all claims, demands, suits,
actions, causes of actions, losses, damages, obligations, liabilities, costs
and
expenses (including, without limitation, reasonable attorneys' fees and court
costs) (collectively, the “Losses”)
arising as a result of or incurred in connection with (i) any breach by
cVideo and/or Stockholders of any of their representations or warranties
set
forth in this Agreement and (ii) any failure by cVideo and/or the
Stockholders to perform any of their covenants or agreements set forth in
this
Agreement. Losses may be obtained jointly and severally from the Stockholders;
provided, however, that the liability of each Stockholder under this
Section 8.2 shall be limited to the value of Earnout Consideration
distributed to that Stockholder. Any Loss that results from a settlement
of a
third party claim against an SYS Indemnified Party shall be the subject of
indemnification hereunder only if the settlement has been approved by Xxxxxxx
Xxxxxx. The Stockholders may not settle any such claim unless the settlement
provides for a full and complete release of the SYS Indemnified Parties and
does
not include equitable relief against, or payment from, any SYS Indemnified
Party.
ARTICLE
IX
MISCELLANEOUS
9.1 Notices.
All
notices and other communications hereunder shall be in writing and shall
be
deemed given if delivered personally, sent by facsimile (with written
confirmation of successful delivery) or dispatched by a nationally recognized
overnight courier service to the parties at the following addresses (or at
such
other address for a party as shall be specified by like notice from such
party
to the other parties hereto):
9.1.1 if
to
SYS:
SYS
0000
Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
Attention:
Xxxxxxx X. Xxxx, Secretary
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxx,
Forward, Xxxxxxxx & Scripps LLP
000
Xxxx
Xxxxxxxx, Xxxxx 0000
Xxx
Xxxxx, XX 00000
Attention:
Xxxx X. Xxxxxxxx, Esq.
Facsimile:
(000) 000-0000
9.1.2 if
to
cVideo and the Stockholders:
Xxxxxxx
Xxxxxxxx
Xxxxxxxx
Family Trust
0000
Xx
Xxxxx Xxxxxx
Xx
Xxxxx,
XX 00000
Cubic
Corp.
0000
Xxxxxx Xxx.
Xxx
Xxxxx, XX 00000
Xxxxxx
Xxxxxx
Xxxxxx
Family Trust
00000
Xxxxxxxxxxx Xxxx
Xxxxx,
XX
00000
Xxxxxxx
Xxxxxx
00000
Xxxxxx Xxxx
Xxxxx,
XX
00000
with
a
copy to:
Xxxxxx
Xxxxx Xxxxx, a Professional Corporation
0000
X.
Xx Xxxxxx Xxxx, Xxxxx X-000
Xxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxx X. Xxxxx, Esq.
Facsimile:
9.2 Interpretation.
9.2.1 When
a
reference is made in this Agreement to an Article or Section, such
reference shall be to an Article or Section of this Agreement unless
otherwise indicated. The headings, the table of contents and the index of
defined terms contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words “include,”“includes,” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”
9.2.2 For
the
purposes of any provision of this Agreement, a “Material Adverse Effect” with
respect to any party shall be deemed to occur if any event, change or effect
has
occurred which has a material adverse effect on the business, assets (including
intangible assets), liabilities (contingent or otherwise), results of
operations, business prospects, or financial condition of such party taken
as a
whole, or a material adverse effect on the ability of such party to timely
perform its obligations under this Agreement and the other transaction documents
contemplated hereby; provided,
however,
none of
the following shall be deemed in themselves, either alone or in combination,
to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Material Adverse Effect:
(i) with
respect to any party, any change in or effect upon the assets (including
intangible assets), liabilities (contingent or otherwise), financial condition,
business prospects, or results of operations of such party directly or
indirectly arising out of or attributable to any decrease in the market price
of
SYS Common Shares (but not any change or effect underlying such decrease
to the
extent such change or effect would otherwise constitute a Material Adverse
Effect on SYS);
(ii) with
respect to any party, any change in or effect upon the assets (including
intangible assets), liabilities (contingent or otherwise), financial condition,
business prospects, or results of operations of such party directly or
indirectly arising out of or attributable to (A) conditions, events, or
circumstances generally affecting the economy of the United States, or
(B) the general state of industries and market sectors in which such party
operates; and
(iii) with
respect to cVideo, any change in or effect upon the assets (including intangible
assets), liabilities (contingent or otherwise), financial condition, or results
of operations of cVideo directly or indirectly arising out of or attributable
to
the loss by cVideo of any of its business prospects or customers (including
business of such business prospects or customers), suppliers or employees
(including, without limitation, any financial consequence of such loss of
customers (including business of such customers), suppliers or employees)
due
primarily to the transactions contemplated hereby or the public announcement
of
this Agreement, in each case arising after the date of this
Agreement.
9.2.3 For
purposes of this Agreement, a “Subsidiary” when used with respect to any party
means any individual partnership, firm, corporation, association, trust,
unincorporated organization (including any representative office or branch)
or
other entity under the laws of any jurisdiction, (i) of which such party or
another subsidiary of such party is a general partner (excluding partnerships,
the general partnership interests of which held by such party or the Subsidiary
of such party do not have 50% or more of the voting interests in such
partnership) or (ii) 50% or more of the securities or other interests of
which having by their terms ordinary voting power to elect at least 50% of
the
board of directors or others performing similar functions with respect to
such
corporation or other organization is directly or indirectly owned or controlled
by such party or one or more of its subsidiaries (or if there are no such
voting
securities or interests, 50% or more of the equity interests of which is
directly or indirectly owned or controlled by such party or one or more of
its
subsidiaries).
9.2.4 For
purposes of this Agreement, “Affiliate” means a person that directly, or
indirectly through one or more intermediaries, controls, is controlled by
or is
under common control with another person or beneficially owns or has the
power
to vote or direct the vote of 10% of more of the voting stock (or of any
other
form of general partnership, limited partnership or voting equity interest
in
the case of a person that is not a corporation) of such other person. For
purposes of this definition, “control,” including the terms “controlling and
“controlled” means through the ownership of voting securities, by contract or
credit arrangement, as trustee, partner or executor or otherwise.
9.2.5 For
purposes of this Agreement, “Knowledge” means with respect to SYS, the actual
knowledge of Xxxxxxx X. Xxxxx, Xxxxxx X. Lake and Xxx Xxxxxxx; with
respect to cVideo, the actual knowledge of Tumini, Faller, Sulpizio, Xxxxxxx
Xxxxxx and Xxxxx Xxxxxxx; and with respect to the Stockholders, the actual
knowledge of each Stockholder.
9.3 Counterparts.
This
Agreement may be executed in counterparts which may be delivered by facsimile
transmission, which together shall constitute one and the same Agreement.
The
parties may execute more than one copy of the Agreement, each of which shall
constitute an original.
9.4 Entire
Agreement.
This
Agreement (including the documents and the instruments referred to herein)
constitute the entire agreement among the parties and supersede all prior
agreements and understandings, agreements or representations by or among
the
parties, written and oral, with respect to the subject matter hereof and
thereof; provided, however, that the parties’ nondisclosure/nonuse agreement
shall survive, and shall also survive any termination of this
Agreement.
9.5 Third-Party
Beneficiaries.
Nothing
in this Agreement, express or implied, is intended or shall be construed
to
create any third-party beneficiaries.
9.6 Governing
Law; Venue.
9.6.1 This
Agreement shall be governed by the laws of the State of California without
regard to its conflict of laws rules, and any action arising out of or in
connection with this Agreement or the Acquisition shall be brought only in
the
appropriate federal or state court in San Diego County, California. Each
of the
parties hereto agrees that a final judgment in any action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law.
9.6.2 Each
of
the parties hereto irrevocably consents to the service of any summons and
complaint and any other process in any other action or proceeding relating
to
this Agreement, on behalf of itself or its property, by the personal delivery
of
copies of such process to such party. Nothing in this Section 9.6 shall
affect the right of any party hereto to serve legal process in any other
manner
permitted by law.
9.7 Arbitration.
The
parties to this Agreement shall submit to binding arbitration before a single,
neutral arbitrator of any dispute, controversy or claim arising out of, or
relating to, the transactions contemplated by this Agreement or any breach
hereof, provided,
however,
that
the parties retain their right to, and shall not be prohibited, limited or
in
any other way restricted from, seeking or obtaining equitable relief from
a
court having jurisdiction over the parties. Such arbitration shall be governed
by and conducted through the American Arbitration Association in accordance
with
the Commercial Dispute Resolution Procedures. The arbitration hearing shall
be
held in San Diego, California at a place to be designated by the parties
or, in the absence of their agreement, by the arbitrator.
9.8 Specific
Performance.
The
transactions contemplated by this Agreement are unique. Accordingly, each
of the
parties acknowledges and agrees that, in addition to all other remedies to
which
it may be entitled, each of the parties hereto is entitled to a decree of
specific performance, provided such party is not in material default hereunder.
The party prevailing in any proceeding seeking such a decree shall be entitled
to payment of all reasonable legal fees and expenses by the non-prevailing
party.
9.9 Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder
shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties, which
consent
shall not be unreasonably withheld. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by
the parties and their respective successors and assigns. Additionally,
notwithstanding the foregoing or anything to the contrary contained in this
Agreement, SYS is specifically permitted to adopt a holding company structure
pursuant to Section 251(g) of the Delaware General Corporation Law and
assign this Agreement to the holding company or consummate SYS’s previously
approved reincorporation into the State of Delaware, in which case the
references herein to receipt and registration of actual and underlying SYS
shares shall instead refer to the equivalent shares of the Delaware
corporation.
9.10 Expenses.
All
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses; provided, however, that in the event of the Closing
of
the Acquisition, SYS shall pay up to $25,000 of legal fees and due diligence
costs of cVideo.
9.11 Severability.
The
invalidity or unenforceability in whole or in part of any covenant, promise
or
undertaking, or any section, subsection, sentence, clause, phrase, word,
or any
of the provisions of this Agreement will not affect the validity or
enforceability of the remaining portions of this Agreement. If for any reason,
any provision is determined to be invalid or in conflict with any existing,
or
future law or regulation by a court or agency having valid jurisdiction,
such
will not impair the operation or have any other effect upon such other
provisions of this Agreement as may remain otherwise valid, and the latter
will
continue to be given full force and effect and bind the parties
hereto.
9.12 Amendment.
This
Agreement may be amended prior to the Closing Date only by agreement in writing
executed by all of the parties hereto; provided,
however,
that
cVideo shall be entitled to provide written statements regarding new information
as to the cVideo Disclosure Schedule, respectively, without the written consent
of the other parties hereto.
[Signature
Page Follows]
IN
WITNESS WHEREOF,
SYS and
the Stockholders have signed this Agreement as of the date first written
above.
SYS
By: ____________________________________
Name: Xxxxxxx
X. Xxxxx
Title: President
By: ____________________________________
Name: Xxxxxxx
X. Xxxx
Title: Secretary
cVIDEO
By: ____________________________________
Name: Xxxxxxx
Xxxxxx
Title: President
and Chief Executive Officer
By: ____________________________________
Name: Xxxxxxx
Xxxxxx
Title: Secretary
STOCKHOLDERS
__________________________________________
Xxxxxxx
Xxxxxx
__________________________________________
Xxxxxx
Xxxxxx, individually and as Trustee of the Xxxxxx Family Trust
__________________________________________
Xxxxxxx
Xxxxxxxx, individually and as Trustee of the Xxxxxxxx Family Trust
Cubic
Corporation
By: ______________________________
Name: Xxxx
X.
Xxxxxx
Title: Vice
President-Finance
[Signature
Page to Acquisition Agreement]
EXHIBIT A
List
of
Acquired Assets
EXHIBIT B
List
of
Assumed Liabilities
EXHIBIT C
List
of
Liabilities to be Paid at Closing
FIRST
AMENDMENT TO
This
First Amendment to Asset Purchase and Sale Agreement (this “Amendment”) is
effective as of December 1, 2005 (“Effective Date”) by and among SYS, a
California corporation (“SYS”), cVideo, Inc., a Delaware corporation (“cVideo”),
Xxxxxxx Xxxxxx, an individual (“Tumini”), Xxxxxx Xxxxxx, individually and as
Trustee of the Xxxxxx Family Trust (“Xxxxxx”), Xxxxxxx Xxxxxxxx, individually
and as Trustee of the Xxxxxxxx Family Trust (“Xxxxxxxx”), and Cubic Corporation,
a Delaware corporation (“Cubic”), each of Tumini, Faller, Xxxxxxxx and Cubic
being a stockholder of cVideo. Such stockholders are referred to individually
herein as a “Stockholder” and collectively as the “Stockholders.” cVideo and the
Stockholders are sometimes collectively referred to herein as the “Seller
Parties.”
RECITALS
A. The
parties have entered into that certain Asset Purchase and Sale Agreement
dated
November 10, 2005 (the “Agreement”); and
B. The
parties desire to amend the Agreement pursuant to the terms and conditions
of
this Amendment.
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
and conditions set forth below, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
agree
as follows:
1. Definitions.Unless
otherwise defined in this Amendment, all capitalized terms herein shall
have the
meanings ascribed to them in the Agreement.
2. Acquisition
Consideration.
Section
2.1 of the Agreement is deleted in its entirety and replaced with the
following:
“2.1 Acquisition
Consideration.
At the
Closing SYS shall pay $1,549,835.67 to the payees listed and in the amounts
described on Exhibit
C,
and an
additional $50,000 to cVideo for its own use (collectively, the $1,549,835.67
and $50,000 are referred to as the “Acquisition Consideration”) .”
3. Earnout
Consideration.
Section
2.2.1 of the Agreement is deleted in its entirety and replaced with the
following:
“2.2.1 If
revenues from the Business (as that term is defined in Section 2.2.2) for
the
period between the Closing Date and June 30, 2006 exceed $1,450,000, then
SYS
shall pay, not later than August 15, 2006, an additional $165,389.33 to
cVideo,
with the understanding that cVideo intends to use this money in satisfaction
of
liabilities owed by cVideo to the persons and in the amounts described
on
Exhibit B as “Excluded Liabilities of cVideo, Inc. Balance Sheet as of December
1, 2005”.”
4. Executory
Agreements.
Section
2.4.2 of the Agreement is deleted in its entirety and replaced with the
following:
“2.4.2 Executory
Agreements.
The
accounts payable and the executory portion of those contracts, leases,
license
agreements, commitments and other agreements which are listed on Exhibit B
to this
Agreement excluding the list of Excluded Liabilities of the cVideo, Inc.
Balance
Sheet as of December 1, 2005, and provided that Seller’s obligations specified
on Exhibit C
shall be
paid at Closing as provided for in Section 2.1.”
5. Conditions
to Obligations of SYS.Section
6.3.8 of the Agreement is deleted in its entirety and replaced with the
following:
“6.3.8 cVideo
shall have obtained the written agreement of Arden Realty to a termination
of
its office lease effective not later than April 30, 2006, on terms satisfactory
to SYS, in its sole discretion.”
6. Indemnification.
The
following Section 8.3 shall be added to the Agreement after Section
8.2:
“8.3
Mosler
Indemnification.
In
addition to the indemnification provided for in Section 8.2 above, from
and
after the Closing, cVideo, Tumini, Xxxxxx and Xxxxxxxx, jointly and severally,
shall indemnify, defend (with counsel reasonably acceptable to SYS) and
hold the
SYS Indemnified Parties harmless from and against any and all Losses arising
as
a result of or incurred in connection with the Mosler bankruptcy. Losses
may be
obtained jointly and severally from cVideo, Tumini, Xxxxxx and Xxxxxxxx.
SYS
shall not initiate contact with the trustee of the Mosler bankruptcy without
first obtaining the written consent of cVideo. ”
7. Exhibits
and Disclosure Schedule.
Exhibit
A
to the Agreement, Exhibit B to the Agreement, Exhibit C to the Agreement
and the
cVideo Disclosure Schedule to the Agreement are all deleted in their entirety
and replaced with Exhibit A, attached hereto, Exhibit B attached hereto,
Exhibit
C, attached hereto, and the new cVideo Disclosure Schedule, attached hereto
as
Exhibit D.
8. Counterparts.
This
Amendment may be executed in several counterparts that together shall be
originals and constitute one and the same instrument. Each of the parties
warrants to each of the other parties that the individual executing this
Amendment on behalf of such party has the requisite authority to execute
this
Amendment and to bind such party to all the provisions of this
Amendment.
9. Continuing
Validity.
Except
as expressly modified by this Amendment, the terms and conditions of the
Agreement will remain unchanged and in full force and effect, and are expressly
incorporated by reference in this Amendment. In the event of a conflict
between
the terms of this Amendment and the Agreement, the terms of this Amendment
will
prevail.
[The
remainder of this page intentionally left blank.]
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the Effective
Date.
SYS
By: ____________________________________
Name: Xxxxxxx
X. Xxxxx
Title: President
By: ____________________________________
Name: Xxxxxxx
X. Xxxx
Title: Secretary
cVIDEO
By: ____________________________________
Name: Xxxxxxx
Xxxxxx
Title: President
and Chief Executive Officer
By: ____________________________________
Name: Xxxxxxx
Xxxxxx
Title: Secretary
STOCKHOLDERS
__________________________________________
Xxxxxxx
Xxxxxx
__________________________________________
Xxxxxx
Xxxxxx, individually and as Trustee of the Xxxxxx Family Trust
__________________________________________
Xxxxxxx
Xxxxxxxx, individually and as Trustee of the Xxxxxxxx Family Trust
Cubic
Corporation
By: ______________________________
Name: ________________________
Title: ________________________
Exhibit
A
Exhibit
A to the Agreement
Exhibit
B
Exhibit
B to the Agreement
Exhibit
C
Exhibit
C to the Agreement
Exhibit
D
cVideo
Disclosure Schedule
