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EXHIBIT 10.26
IPO EQUITY OFFER AGREEMENT
THIS IPO EQUITY OFFER AGREEMENT ("Agreement") is made and entered into
as of July 10, 1999 ("Effective Date"), by and between XX0.XXX, INC., a Delaware
corporation ("XX0.xxx"), located at 00000 Xxxxxxx Xxxxxx Xx., Xxxxxxxx #00, Xxx
Xxxxx, XX 00000, and ARKARO S.A., a Belgian corporation ("Arkaro") (and a
subsidiary of Groupe Arnault, a French corporation ("GA")). XX0.xxx and Arkaro
may be referred to individually as a "Party" and collectively as the "Parties."
WHEREAS, XX0.xxx desires to offer Arkaro an opportunity to purchase,
directly from XX0.xxx, shares of common stock to be registered under the
Securities Act of 1933, as amended (the "Act"), in connection with XX0.xxx's
initial public offering (the "IPO"); and
WHEREAS, any purchase of such shares shall be conditioned upon the
delivery to and acceptance by Arkaro of a final prospectus in accordance with
the Act.
NOW, THEREFORE, in consideration of the foregoing recitals and due and
valid consideration hereby acknowledged, the Parties hereto agree as follows:
1. IPO EQUITY OFFER. Subject to receipt of any necessary approvals
from the National Association of Securities Dealers, Inc., which both parties
shall use their reasonable best efforts to obtain, XX0.xxx shall offer Arkaro
the opportunity (the "IPO Offer") to purchase directly from XX0.xxx
simultaneously with XX0.xxx's IPO a number of shares of common stock equal to
five percent (5%) of the number of shares of outstanding capital stock of
XX0.xxx as of the effective date of the IPO (excluding any stock options,
warrants or similar securities) but giving effect to (i) the closing of the IPO
and (ii) the exercise by Arkaro of the IPO Offer (the "IPO Offer Shares"). In
the event that Arkaro exercises its IPO Offer, Arkaro shall purchase the IPO
Offer Shares directly from XX0.xxx at the price per share offered to the public
in the IPO. XX0.xxx shall provide written notice to Arkaro at least three
business days prior to the anticipated effective date of the IPO. Arkaro shall
be required to provide written notice to XX0.xxx no later than two business days
following its receipt of such notice of Arkaro's intention to exercise its IPO
Offer, provided, however, that any purchase of the IPO Offer Shares by Arkaro
shall be conditioned upon the delivery to and acceptance by Arkaro of a final
prospectus in accordance with the Act. Arkaro's IPO Offer may only be exercised
for the full amount of the IPO Offer Shares. The closing of Arkaro's purchase of
the IPO Offer Shares from XX0.xxx (the "Closing") shall occur simultaneously
with the closing of the sale of the underwritten shares of common stock in the
IPO, which is expected to occur three business days following the date on which
the Registration Statement on Form S-1 registering the IPO Offer Shares is
declared effective by the United States Securities and Exchange Commission (the
"SEC"). Payment by Arkaro for the IPO Offer Shares in the Closing shall be made
by wire transfer to XX0.xxx's account at Imperial Bank, 000 "X" Xxxxxx, Xxxxx
000, Xxx Xxxxx, XX 00000, Routing# 000000000, Account# 0000-000-000, in exchange
for a certificate representing the IPO Offer Shares. Such IPO Offer Shares shall
be registered under the Act and shall bear no legends other than a stop-transfer
legend pursuant to Section 2.4. The IPO Offer shall terminate as provided in the
second sentence of Section 2.3 of the Advertising Agreement (as defined below)
or if, as of the date of pricing of the IPO, GA is in default under that certain
Advertising, Promotion and Marketing Agreement entered into by GA and XX0.xxx as
of even date herewith
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(the "Advertising Agreement"), including without limitation any default under
Section 2.3 or Section 2.5 of the Advertising Agreement.
2. EQUITY PROVISIONS.
2.1 STANDSTILL PROVISION. Arkaro hereby covenants and agrees
that from and after the Effective Date, except as contemplated in Section 1 of
this Agreement or in the Advertising Agreement, Arkaro shall not, and shall not
permit its affiliates (including parents, subsidiaries or other related
entities), in any manner, singly or as part of a partnership, limited
partnership, syndicate or other "Group" (within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934), directly or indirectly, to:
(a) make, effect, initiate, cause or participate in
(i) any acquisition of beneficial ownership of any securities of XX0.xxx or any
securities of any subsidiary or other affiliate of XX0.xxx, (ii) any acquisition
of any assets of XX0.xxx or any assets of any subsidiary or other affiliate of
XX0.xxx, (iii) any tender offer, exchange offer, merger, business combination,
recapitalization, restructuring, liquidation, dissolution or extraordinary
transaction involving XX0.xxx or any subsidiary or other affiliate of XX0.xxx,
or involving any securities or assets of XX0.xxx or any securities or assets of
any subsidiary or other affiliate of XX0.xxx, or (iv) any "solicitation" of
"proxies" (as those terms are used in the proxy rules of the SEC) or consents
with respect to any securities of XX0.xxx;
(b) form, join or participate in a "group" (as
defined in the Securities Exchange Act of 1934 and the rules promulgated
thereunder) with respect to the beneficial ownership of any securities of
XX0.xxx;
(c) act, alone or in concert with others, to seek to
control or influence the management, board of directors or policies of XX0.xxx;
(d) take any action that might require XX0.xxx to
make a public announcement regarding any of the types of matters set forth in
clause "(a)" of this sentence;
(e) agree or offer to take, or encourage or propose
(publicly or otherwise) the taking of, any action referred to in clause "(a)",
"(b)", "(c)" or "(d)" of this sentence;
(f) assist, induce or encourage any other Person to
take any action of the type referred to in clause "(a)", "(b)", "(c)", "(d)" or
"(e)" of this sentence;
(g) enter into any discussions, negotiations,
arrangement or agreement with any other Person relating to any of the foregoing;
or
(h) request or propose publicly or in writing that
XX0.xxx or any of XX0.xxx's representatives amend, waive or consider the
amendment or waiver of any provision set forth in this Section 2.1.
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For the purposes of this Section 2.1, the term "Person" shall be
broadly interpreted to include any individual and any corporation, partnership
entity, group, tribunal or governmental authority.
2.2 AGREEMENT NOT TO SELL. Arkaro agrees that, during the
period beginning on the Effective Date and ending on the first anniversary of
the effective date of XX0.xxx's IPO, Arkaro shall not, without the prior written
consent of XX0.xxx, directly or indirectly sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of any securities of XX0.xxx held by it at any time during
such period. Notwithstanding the foregoing, commencing on the six (6) month
anniversary of the IPO, the foregoing restrictions shall lapse with respect to
10% of the IPO Offer Shares in each subsequent calendar month; provided,
however, that Arkaro will not sell, transfer or dispose of more than 20% of the
IPO Offer Shares in any month prior to the first anniversary of the effective
date of XX0.xxx's IPO.
2.3 TRANSFERS TO AFFILIATES. Notwithstanding the foregoing
Section 2.2, Arkaro may transfer the IPO Offer Shares to GA or any subsidiary of
GA, subject to such transferee's consent to be bound by this Agreement to the
same extent that Arkaro would be subject to this Agreement.
2.4 STOP TRANSFER PROVISIONS. In order to enforce the
provisions of this Section 2, XX0.xxx may impose stop-transfer instructions with
respect to the securities held by Arkaro that are subject to the foregoing
restrictions. When stop-transfer restrictions lapse with respect to any IPO
Offer Shares, XX0.xxx shall, upon request of GA, reissue certificates
representing such IPO Offer Shares without stop-transfer restrictions.
3. DUE AUTHORIZATION. Each Party has all necessary corporate power
and authority under all applicable provisions of law to execute and deliver this
Agreement and to carry out its provisions. All corporate action on each Party's
part required for the lawful execution and delivery of this Agreement and any
related agreements has been effectively taken. Upon its execution and delivery,
this Agreement will be a valid and binding obligation of each Party, enforceable
in accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights and (b) general principles of equity
that restrict the availability of equitable remedies.
4. GENERAL PROVISIONS.
4.1 ENTIRE AGREEMENT. This Agreement, together with any
Exhibits attached hereto, represents the entire agreement between the Parties
with respect to the subject matter hereof and thereof and shall supersede all
prior agreements and communications of the Parties, oral or written.
4.2 AMENDMENT AND WAIVER. No amendment to, or waiver of, any
provision of this Agreement shall be effective unless in writing and signed by
all Parties hereto. The waiver by any party of any breach or default shall not
constitute a waiver of any different or subsequent breach or default.
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4.3 GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California without
giving effect to principles of conflicts of laws. Arkaro agrees to submit to
jurisdiction in California and further agrees that any cause of action arising
under this Agreement must be brought exclusively in a court in San Diego County,
California.
4.4 SUCCESSORS AND ASSIGNS. No Party shall assign its rights
or obligations under this Agreement without the prior written consent of the
other Party, which shall not unreasonably be withheld or delayed.
Notwithstanding the foregoing, each Party may assign this Agreement to an entity
who acquires substantially all of the stock or assets of a Party to this
Agreement; provided that consent will be required in the event that the
non-assigning Party reasonably determines that the assignee will not have
sufficient capital or assets to perform its obligations hereunder, or that the
assignee is a direct competitor of the non-assigning party. In addition, Arkaro
may assign its rights under Section 1 to GA or any wholly-owned subsidiary of
GA, subject to such assignee's consent to be bound by this Agreement to the same
extent that Arkaro would be subject to this Agreement. All terms and provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted transferees, successors and assigns.
4.5 FORCE MAJEURE. No Party shall be liable for failure to
perform or delay in performing any obligation (other than the payment of money)
under this Agreement if such failure or delay is due to fire, flood, earthquake,
strike, war (declared or undeclared), embargo, blockade, legal prohibition,
governmental action, riot, insurrection, damage, destruction or any other
similar cause beyond the control of such party.
4.6 NOTICES. All notices, requests and other communications
called for by this agreement shall be deemed to have been given immediately if
made by telecopy or electronic mail (confirmed by concurrent written notice sent
via overnight courier for delivery by the next business day), if to XX0.xxx at
00000 Xxxxxxx Xxxxxx Xx., #00, Xxx Xxxxx, XX 00000, attention President (e-mail:
xxxxx@xx0.xxx), with a copy to its Director of Legal Affairs (e-mail:
xxxxx@xx0.xxx), and if to Arkaro at the physical and electronic mail addresses
set forth on the signature page of this Agreement, or to such other addresses as
each Party shall specify to the other Party. Notice by any other means shall be
deemed made when actually received by the Party to which notice is provided.
4.7 SEVERABILITY. If any provision of this Agreement is held
to be invalid, illegal or unenforceable for any reason, such invalidity,
illegality or unenforceability shall not effect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
4.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which taken together shall constitute a single
instrument. Execution and delivery of this Agreement may be evidenced by
facsimile transmission.
4.9 AUTHORITY. Each of the Parties represents and warrants
that the negotiation and entry of this Agreement will not violate, conflict
with, interfere with, result in a breach of, or constitute a default under any
other agreement to which they are a party.
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4.10 ATTORNEYS FEES. The prevailing party in any action to
enforce this Agreement shall be entitled to reimbursement of its expenses,
including reasonable attorneys' fees.
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The Parties have caused this Agreement to be duly executed as of the Effective
Date.
XX0.XXX, INC. ARKARO S.A.
By:__________________________________________ By:___________________________________________
Name: Xxxxx Xxxxxxxx Name: Xxxx-Xxxxxxx Xxxxxx
Title: President and Chief Operating Officer Title: Vice President Investments and
Information Technology
Date: July 10, 1999 Date: July 10, 1999
Address: 00000 Xxxxxxx Xxxxxx Xxxxx Address: 00 Xxx. Xxxxx
Xxxxxxxx #00 Xxxxx 00000
Xxx Xxxxx, XX 00000 France
e-mail: xxxxx@xx0.xxx e-mail: xx.xxxxxx@xxxx.xx
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