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ASSET PURCHASE AGREEMENT
by and among:
3dfx Interactive, Inc., a California corporation,
NVIDIA Corporation, a Delaware corporation,
and
Titan Acquisition Corp. No. 2 a Delaware corporation,
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Dated as of December 15, 2000
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Note: Subsequent to the execution of this agreement, Titan Acquisition Corp.
No. 2 changed its name to NVIDIA US Investment Company.
Table of Contents
1. Sale of Specified Assets; Related Transactions......................... B-1
1.1 Sale of Specified Assets......................................... B-1
1.2 Consideration.................................................... B-2
1.3 Payment of Stock Consideration; Adjustment....................... B-2
1.4 No Assumed Liabilities........................................... B-3
1.5 Credit Facility.................................................. B-4
1.6 Stay Order; Standstill Agreement................................. B-4
1.7 Taxes............................................................ B-4
1.8 Allocation....................................................... B-4
1.9 Closing.......................................................... B-5
1.10 Dissenting Shares................................................ B-6
1.11 Further Action................................................... B-6
2. Representations and Warranties of the Seller........................... B-6
2.1 Subsidiaries; Due Organization; Etc.............................. B-6
2.2 Articles of Incorporation and Bylaws; Records.................... B-6
2.3 SEC Filings; Financial Statements................................ B-7
2.4 Absence of Changes............................................... B-7
2.5 Title To Specified Assets........................................ B-8
2.6 Receivables...................................................... B-8
2.7 Inventory........................................................ B-9
2.8 Equipment, Etc................................................... B-9
2.9 Real Property; Environmental Matters............................. B-9
2.10 Proprietary Assets............................................... B-9
2.11 Contracts........................................................ B-11
2.12 Liabilities; Major Suppliers..................................... B-11
2.13 Compliance with Legal Requirements............................... B-12
2.14 Governmental Authorizations...................................... B-13
2.15 Tax Matters...................................................... B-13
2.16 Employee and Labor Matters....................................... B-13
2.17 Benefit Plans; ERISA............................................. B-14
2.18 Sale of Products................................................. B-15
2.19 Performance Of Services.......................................... B-15
2.20 Insurance........................................................ B-16
2.21 Proceedings; Orders.............................................. B-16
2.22 Authority; Binding Nature Of Agreements.......................... B-17
2.23 Non-Contravention; Consents...................................... B-17
2.24 Transactions with Affiliates..................................... B-18
2.25 No Discussions................................................... B-18
2.26 Opinion of Financial Advisor..................................... B-18
2.27 Brokers.......................................................... B-18
2.28 Full Disclosure.................................................. B-18
2.29 Sufficiency of Cash Consideration................................ B-19
3. Representations and Warranties of Parent and the Purchaser............. B-19
3.1 Due Organization; Etc............................................ B-19
3.2 Authority; Binding Nature of Agreements.......................... B-19
3.3 SEC Filings...................................................... B-19
3.4 Non-Contravention; Consents...................................... B-19
3.5 Valid Issuance................................................... B-19
3.6 Brokers.......................................................... B-19
4. Pre-Closing Covenants of the Seller.................................... B-20
4.1 Access and Investigation......................................... B-20
4.2 Operation of Business............................................ B-20
4.3 Filings and Consents............................................. B-21
4.4 Notification; Updates to Disclosure Schedule..................... B-21
4.5 No Solicitation.................................................. B-22
4.6 Shareholders’ Meeting............................................ B-23
4.7 Confidentiality.................................................. B-24
4.8 Satisfaction of Liabilities...................................... B-24
5. Additional Covenants of the Parties.................................... B-24
5.1 Registration Statement; Prospectus/Proxy Statement............... B-24
5.2 Regulatory Approvals............................................. B-25
5.3 Additional Agreements............................................ B-25
5.4 Certain Employment Arrangements.................................. B-26
5.5 Consolidated Tax Return.......................................... B-26
5.6 Delivery of Additional Documents................................. B-26
6. Conditions Precedent to the Purchaser's Obligation to Close............ B-26
6.1 Accuracy of Representations...................................... B-26
6.2 Performance Of Obligations....................................... B-26
6.3 Shareholder Approval............................................. B-27
6.4 Consents......................................................... B-27
6.5 No Material Adverse Change....................................... B-27
6.6 Additional Documents............................................. B-27
6.7 Repayment of Credit Facility..................................... B-27
6.8 No Prohibition................................................... B-27
6.9 Effectiveness of Registration Statement.......................... B-27
6.10 HSR Act.......................................................... B-27
6.11 Governmental Litigation.......................................... B-28
6.12 Release of Liens................................................. B-28
7. Conditions Precedent to the Seller's Obligation to Close............... B-28
7.1 Accuracy Of Representations...................................... B-28
7.2 Purchaser’s Performance.......................................... B-28
7.3 Shareholder Approval............................................. B-28
7.4 Effectiveness of Registration Statement.......................... B-28
7.5 HSR Act.......................................................... B-28
7.6 Stipulation and Proposed Order to Dismiss........................ B-28
7.7 Purchaser Closing Certificate.................................... B-28
7.8 Governmental Litigation.......................................... B-29
8. Termination........................................................ B-29
8.1 Termination Events............................................... B-29
8.2 Termination Procedures........................................... B-30
8.3 Effect of Termination............................................ B-30
8.4 Termination Fees................................................. B-30
8.5 Nonexclusivity of Termination Rights............................. B-31
9. Indemnification, Etc..................................................B-32
9.1 Survival Of Representations And Covenants........................ B-32
9.2 Indemnification by the Seller.................................... B-32
9.3 Setoff........................................................... B-33
9.4 Noexclusivity of Indemnification Remedies....................... B-33
9.5 Defense of Third Party Claims................................. B-33
9.6 Threshold..................................................... B-34
9.7 Exercise of Remedies by Indemnitees Other Than Parent or the Purchaser..................................................... B-34
10. Certain Post-Closing Covenants...................................... B-34
10.1 Further Actions............................................... B-34
10.2 Publicity..................................................... B-35
10.3 Plan of Dissolution........................................... B-35
10.4 Continued Payment of Liabilities.............................. B-35
10.5 Change Of Name................................................ B-35
11. Miscellaneous Provisions............................................ B-35
11.1 Further Assurances............................................ B-35
11.2 Fees and Expenses............................................. B-35
11.3 Attorneys’ Fees............................................... B-36
11.4 Notices....................................................... B-36
11.5 Time of the Essence........................................... B-36
11.6 Headings...................................................... B-36
11.7 Counterparts.................................................. B-36
11.8 Governing Law; Venue.......................................... B-36
11.9 Successors and Assigns; Parties in Interest................... B-37
11.10 Remedies Cumulative; Specific Performance..................... B-37
11.11 Waiver........................................................ B-37
11.12 Amendments.................................................... B-38
11.13 Severability.................................................. B-38
11.14 Entire Agreement.............................................. B-38
11.15 Knowledge..................................................... B-38
11.16 Construction.................................................. B-38
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of December 15, 2000, by and among 3dfx Interactive, Inc. a California corporation (the \NVIDIA Corporation, a Delaware corporation (\Corp. No. 2, a Delaware corporation and an indirect wholly-owned subsidiary of Parent (the \defined in Exhibit A.
Recitals
A. Parent, the Purchaser and the Seller wish to provide for the sale by the Seller to the Purchaser of the Specified Assets (as defined in Section 1.1), the stay and ultimate settlement of certain patent infringement litigation between Parent and the Seller, and certain other related transactions among the
parties, all on the terms and subject to the conditions set forth in this Agreement.
B. In order to induce Parent and the Purchaser to enter into this Agreement and to consummate the transactions contemplated by this Agreement, concurrently with the execution and delivery of this Agreement, certain shareholders of the Seller are entering into Voting Agreements and related proxies in favor of Parent and the Purchaser (the \
C. Concurrently with the execution and delivery of this Agreement, the Seller and the Purchaser are entering into a Credit Agreement (as defined in Section 1.5) pursuant to which the Purchaser is providing a $15 million credit facility to the Seller.
D. The board of directors of the Seller has adopted a plan of dissolution (\approval of its shareholders at the Shareholders' Meeting (as defined herein), elect voluntarily to wind up and dissolve pursuant to the California Corporations Code.
Agreement
The parties to this Agreement, intending to be legally bound, agree as follows:
1. Sale of Specified Assets; Related Transactions.
1.1 Sale of Specified Assets. The Seller shall cause to be sold, assigned, transferred, conveyed and delivered to the Purchaser, at the Closing (as defined in Section 1.9), good and valid title to the Specified Assets (as
defined below), free and clear of any Encumbrances, on the terms and subject to the conditions set forth in this Agreement. For purposes of this Agreement, the term \interests and other tangible and intangible assets (wherever located and whether or not required to be reflected on a balance sheet prepared in accordance with GAAP), including any such assets acquired by the Seller Corporations during the Pre-Closing Period, that are or were used in, needed for the conduct of or material to, or that otherwise directly or indirectly relate to, the graphics business of the Seller Corporations (the \Business\Excluded Assets. Without limiting the generality of the foregoing, the Specified Assets shall include the following:
(a) Patents and Patent Applications; Trademarks: All of the patents, patent applications, trademarks, trademark applications, trade names, service marks and service mark applications of the Seller Corporations, including those identified on Exhibit B, and any counterparts, reissues, extensions, continuations and continuations in part related to the foregoing;
(b) Other Proprietary Assets: All Proprietary Assets and goodwill of the Seller Corporations (including the right to use the names \\
\and the Proprietary Assets identified in Part 2.10 of the Disclosure Schedule), all of the copyrights, trade secrets, know-how, computer software, inventions, designs, drawings, existing and in-development chip designs and related specifications, source codes, verification and validation environments, manufacturing specifications and databases, in
process research and development, product reviews and other Proprietary Assets identified on Exhibit B;
(c) Inventory; Equipment; Other Tangible Assets: The inventories
(including raw materials, work-in-progress and finished goods), equipment, materials, prototypes, tools, supplies, vehicles, furniture, fixtures, improvements and other tangible assets of the Seller Corporations identified on Exhibit B, including the tangible assets identified in Part 2.8 of the Disclosure Schedule, the entire inventory of graphics chips of the Seller Corporations as of the date hereof and all advertising and promotional materials of the Seller Corporations relating to its Graphics Business;
(d) Contracts: All rights of the Seller Corporations under the Seller Contracts (including the Seller Contracts identified in Part 2.11 of the Disclosure Schedule) relating to the Graphics Business;
(e) Governmental Authorizations: All Governmental Authorizations held by the Seller Corporations (including the Governmental Authorizations identified in Part 2.14 of the Disclosure Schedule) relating to the Graphics Business;
(f) Claims: All claims (including claims for past infringement of Proprietary Assets) and causes of action of the Seller Corporations against other Persons relating to the Graphics Business (regardless of whether or not such claims and causes of action have been asserted by the Seller Corporations), and all rights of indemnity, warranty rights, rights of contribution, rights to refunds, rights of reimbursement and other rights of recovery possessed by the Seller Corporations relating to the Graphics Business (regardless of whether such rights are currently exercisable);
(g) Other Assets: All of the Seller Corporations' existing and in- development chip designs and related specifications, source codes, verification and validation environments, manufacturing specifications and databases and customer lists;
(h) Books and Records: All books, records, files and data of the Seller Corporations relating directly or indirectly to the Graphics Business; and
(i) Proceeds: Without limiting any restriction contained herein on any such sale or other disposition, an amount of cash and receivables equal to the gross proceeds from the sale or other disposition of any of the foregoing after the date hereof.
1.2 Consideration. As consideration for the sale of the Specified Assets to the Purchaser, the Purchaser has agreed (a) to pay to the Seller at the Closing (as defined herein) cash in the amount of $70,000,000 (the \
Consideration%upon and subject to the conditions set forth in Section 1.3, and subject to adjustment as provided therein) one million shares of the common stock, par value $.001 per share (\Consideration\Obligations (as defined in Section 1.4(b)) of the Seller by entering into with the Seller (and, if applicable, other Seller Corporations) an Assignment and Assumption Agreement in substantially the form of Exhibit D (the \and Assumption Agreement\
1.3 Payment of Stock Consideration; Adjustment.
(a) The Stock Consideration will be issued by Parent promptly following
the Closing and contributed by Parent to the Purchaser, but shall only become deliverable by the Purchaser to the Seller upon and subject to the completion of the winding up of the business of the Seller pursuant to the Plan of Dissolution, and delivery to the Purchaser of a certificate executed by the Chief Executive Officer or Chief Financial Officer of the Seller certifying that the shareholders of the Seller have duly adopted resolutions approving the wind-up and dissolution of the Seller pursuant to the California Corporations Code, that all Liabilities of the Seller
Corporations have been paid in full or otherwise provided for (in a manner satisfactory to the Purchaser) from sources other than the Stock
Consideration and that the Seller has been validly dissolved (or will upon the filing of a Certificate of Dissolution and subject to no other conditions be dissolved) under the California Corporations Code. Notwithstanding the foregoing, in no event will any portion of the Stock Consideration become payable unless and until the Purchaser is satisfied that the Seller shall have first paid in full or otherwise provided for (in a manner satisfactory to the Purchaser) all Liabilities of the Seller Corporations that are not included among the Designated Contractual Obligations (as defined below).
(b) Following and subject to the Closing, and prior to any payment to the Seller of the Stock Consideration, in the event that the Seller is not in breach of this Agreement (excluding Section 2.29 for purposes of the foregoing), has expended all or substantially all of the Cash Consideration in payment of Liabilities of the Seller Corporations, and reasonably and in good faith determines (i) that the then-remaining Cash Consideration is or will be insufficient to enable the Seller Corporations to pay in full all then-remaining Liabilities of the Seller Corporations, and (ii) that all then-remaining Liabilities of the Seller Corporations could and would be paid in full if Seller had access to additional funds in an amount not in
excess of $25,000,000 and applied such funds exclusively to the payment of such Liabilities, the Seller shall be entitled to request in writing that the Purchaser advance to the Seller up to a maximum of $25,000,000 (the \ shall be obligated to make the Post-Closing Advance, within ten business days after receipt of such written request, unless it determines in good faith that the funds requested would not permit the Seller to pay in full all then-remaining Liabilities of the Seller Corporations. A maximum of one Post-Closing Advance shall ever be required to be made by the Purchaser. In the event that the Purchaser makes a Post-Closing Advance to the Seller, the number of shares of Parent Common Stock constituting the Stock Consideration shall be reduced automatically (and without any action on the part of any party) by the number of shares equal to the quotient determined by dividing (1) the amount of the Post-Closing Advance by (2) $50.00.
(c) If, between the date of this Agreement and the date on which the Stock Consideration (or any portion thereof) is issued to the Seller, the outstanding shares of Parent Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the number of shares of Parent Common Stock constituting the Stock Consideration, and the dollar amount set forth in clause (2) of the last sentence of Section 1.3(b), shall be appropriately adjusted.
1.4 No Assumed Liabilities.
(a) Subject to Section 1.4(b), neither Parent nor the Purchaser shall assume any Liabilities of the Seller whatsoever, whether relating to the Specified Assets, the Graphics Business or otherwise.
(b) Notwithstanding Section 1.4(a), pursuant to the Assignment and Assumption Agreement, at and following the Closing the Purchaser will become obligated to perform the obligations of the Seller under any Assumed Contracts, but only to the extent such obligations: (i) arise after the Closing Date; (ii) do not arise from or relate to any Breach by the Seller of any provision of any of the Assumed Contracts; (iii) do not arise from or relate to any event, circumstance or condition occurring or existing on or prior to the Closing Date that, with notice or lapse of time, would constitute or result in a Breach of any of the Assumed Contracts; and (iv) are ascertainable (in nature and amount) solely by reference to the express terms of the Assumed Contracts (the \ provided, however, that notwithstanding the foregoing, and notwithstanding anything to the contrary contained in this Agreement, the \ Contractual Obligations\ Purchaser shall be required to assume or to perform or discharge:
(1) any Liability of any Person under the Assumed Contracts, except for the Seller Corporations;
(2) any Liability of the Seller Corporations arising from or relating to any action taken by the Seller Corporations, or any failure on the part of the Seller Corporations to take any action, at any time prior to the Closing Date;
(3) any Liability of the Seller Corporations for the payment of any Tax;
(4) any Liability of the Seller Corporations to any employee or former employee of the Seller Corporations under the WARN Act, or under
or with respect to any Employee Benefit Plan, profit sharing plan or dental plan or for severance pay, or for accrued vacation pay or wages;
(4) any Liability of the Seller Corporations to any Related Party;
(5) any Liability under any Assumed Contract, if the Seller shall not have obtained, prior to the Closing Date, any Consent required to be obtained from any Person with respect to the assignment or delegation to the Purchaser of any rights or obligations under such Assumed Contract;
(6) any Liability that is inconsistent with or constitutes an inaccuracy in, or that arises or exists by virtue of any Breach of, (x) any representation or warranty made by the Seller in any of the Transactional Agreements, or (y) any covenant or obligation of the Seller contained in any of the Transactional Agreements; or
(7) any other Liability of the Seller Corporations not expressly assumed by the Purchaser pursuant to the provisions of any of the Transactional Agreements.
1.5 Credit Facility. Contemporaneously with the execution and delivery of this Agreement, the Purchaser and the Seller are entering into a Credit
Agreement (the \the Seller with immediate borrowing availability in the amount of $15,000,000 (the \Agreement and the establishment of the Credit Facility, (a) the Seller is granting to the Purchaser a non-exclusive, perpetual, fully-paid license for all of the Seller's patents, patent applications and inventions, which are held by Seller free and clear of any Encumbrances (other than as may be asserted by
virtue of the Parent Pending Litigation), pursuant to a patent license
agreement (the \Seller is causing to be sold, assigned, transferred, conveyed and delivered to the Purchaser good and valid title, free and clear of any Encumbrances, to all of the trademarks, trademark applications, trade names, service marks and service mark applications of the Seller Corporations.
1.6 Stay Order; Standstill Agreement.
(a) Contemporaneously with the execution hereof, the Seller has agreed to stay the Seller Pending Litigation, and Parent has agreed to stay the Parent Pending Litigation, pursuant to and by executing and filing with the court the Stay Order.
(b) Contemporaneously with the execution hereof, the Seller and Parent have agreed to refrain from bringing litigation against the other with respect to certain patents, patent applications and inventions, pursuant to the Patent Standstill Agreement.
1.7 Taxes. The Seller shall bear and pay, and shall reimburse the Purchaser and the Purchaser's affiliates for, any sales taxes, use taxes, transfer taxes, income taxes, documentary charges, filing fees, recording fees or similar taxes, charges, fees or expenses that may become payable in connection with the sale of the Specified Assets to the Purchaser or in connection with any of the other Transactions. The Seller shall cooperate with the Purchaser to file all requests for certifications of sales and use tax due, including, without limitation, pursuant to Section 6812 of the California Revenue and Taxation Code.
1.8 Allocation. At or prior to the Closing, the Purchaser shall deliver to
the Seller a statement setting forth the Purchaser's good faith determination of the manner in which the consideration referred to in Section 1.2 is to be allocated among the Specified Assets. The allocation prescribed by such statement shall be conclusive and binding upon the Seller for all purposes. The Seller and the Purchaser acknowledge that the
Transactions do not constitute a reorganization described in Section 368 of the Code. The Seller shall not file any Tax Return or other document with, or make any statement or declaration to, any Governmental Body that is inconsistent with such allocation or that is inconsistent with the Transactions not constituting a reorganization.
1.9 Closing.
(a) The closing of the sale of the Specified Assets and the other
Transactions to be consummated contemporaneously therewith to the Purchaser (the \ Palo Alto, California, at 10:00 a.m. on such date (after the expiration of the applicable waiting period under the HSR Act and the satisfaction or waiver of the other conditions to the Closing set forth herein) as the Purchaser may designate in a written notice delivered to the Seller; provided, however, that if any condition set forth in Section 6 has not been satisfied as of the date designated by the Purchaser, then the Purchaser may, at its election, unilaterally postpone the Closing to such other date prior to the Termination Date as it reasonably deems appropriate.
(b) At the Closing, without limiting any of the conditions to the Closing set forth in Section 6 or Section 7:
(i) the Seller shall execute and deliver, or shall cause to be
current or former employee of the Seller Corporations (i) with respect to such employee's participation, eligibility for benefits, vesting, benefit accrual or coverage under any Employee Benefit Plan or with respect to any other matter relating to any Employee Benefit Plan, or (ii) with respect to any proposal or intention on the part of the Seller Corporations to establish or sponsor any Employee Benefit Plan or to provide or make available any fringe benefit or other benefit of any nature.
(e) The Seller Corporations have not advised any of their employees (in writing or otherwise) that they intend or expect to establish or sponsor any Employee Benefit Plan or to provide or make available any fringe benefit or other benefit of any nature in the future.
2.18 Sale of Products. Each product that has been sold by the Seller Corporations to any Person: (i) conformed and complied in all respects with the terms and requirements of any applicable warranty or other Contract and with all applicable Legal Requirements; and (ii) was free of any material design defects, construction defects or other defects or deficiencies at the time of sale. No product manufactured or sold by the Seller Corporations has been the subject of any recall or other similar action; and no event has occurred, and no condition or circumstance exists, that could reasonably be expected to (with or without notice or lapse of time) directly or indirectly give rise to or serve as a basis for any such recall or other similar action relating to any such product.
2.19 Performance Of Services. All services that have been performed on behalf of the Seller Corporations were performed properly and in conformity in all material respects with the terms and requirements of all applicable warranties and other Contracts and with all applicable Legal Requirements. Neither Parent nor the Purchaser will incur or otherwise become subject to any
Liability arising directly or
indirectly from any services performed by the Seller Corporations. There is no claim pending or, to the knowledge of the Seller, threatened against the Seller Corporations relating to any services performed by the Seller Corporations, and, to the best of the knowledge of the Seller, there is no basis for the assertion of any such claim.
2.20 Insurance.
(a) Part 2.20 of the Disclosure Schedule accurately sets forth, with respect to each insurance policy maintained by or at the expense of, or for the direct or indirect benefit of, the Seller Corporations: (i) the name of the insurance carrier that issued such policy and the policy number of such policy; (ii) whether such policy is a \ policy; (iii) a description of the coverage provided by such policy and the material terms and provisions of such policy (including all applicable coverage limits, deductible amounts and co-insurance arrangements and any non-customary exclusions from coverage); (iv) the annual premium payable with respect to such policy, and the cash value (if any) of such policy; and (v) a description of any claims pending, and any claims that have been asserted since January 1, 1998, with respect to such policy or any predecessor insurance policy. Part 2.20 of the Disclosure Schedule also identifies (1) each pending application for insurance that has been submitted by or on behalf of the Seller Corporations, (2) each self- insurance or risk-sharing arrangement affecting the Seller Corporations or any of the assets of the Seller Corporations, and (3) all material risks (of the type customarily insured by Comparable Entities) for which the Seller Corporations do not maintain insurance coverage. The Seller has delivered to Parent accurate and complete copies of all of the insurance policies identified in Part 2.20 of the Disclosure Schedule (including all
renewals thereof and endorsements thereto) and all of the pending applications identified in Part 2.20 of the Disclosure Schedule. Each of the policies identified in Part 2.20 of the Disclosure Schedule is valid, enforceable and in full force and effect, and has been issued by an insurance carrier that, to the best of the knowledge the Seller, is solvent, financially sound and reputable. All of the information contained in the applications submitted in connection with said policies was (at the times said applications were submitted) accurate and complete, and all premiums and other amounts owing with respect to said policies have been paid in full on a timely basis.
(b) Part 2.20 of the Disclosure Schedule identifies each insurance claim made by the Seller Corporations since January 31, 1999. No event has occurred, and no condition or circumstance exists, that could reasonably be expected to (with or without notice or lapse of time) directly or indirectly give rise to or serve as a basis for any such insurance claim. The Seller Corporations have not received: (i) any notice or other communication (in writing or otherwise) regarding the actual or possible cancellation or invalidation of any of the policies identified in Part 2.20 of the Disclosure Schedule or regarding any actual or possible adjustment in the amount of the premiums payable with respect to any of said policies; (ii) any notice or other communication (in writing or otherwise) regarding any actual or possible refusal of coverage under, or any actual or possible rejection of any claim under, any of the policies identified in Part 2.20 of the Disclosure Schedule; or (iii) any indication that the issuer of any of the policies identified in Part 2.20 of the Disclosure Schedule may be unwilling or unable to perform any of its obligations thereunder.
2.21 Proceedings; Orders. Except as set forth in Part 2.21 of the Disclosure Schedule, there is no pending Proceeding, and, to the knowledge of the Seller,
no Person has threatened in writing to commence any Proceeding: (i) that involves the Seller Corporations or that otherwise relates to or could
reasonably be expected to affect the business of the Seller Corporations or any of the Specified Assets or the Graphics Business (whether or not any Seller Corporation is named as a party thereto); or (ii) that challenges, or that could reasonably be expected to have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Transactions. Except as set forth in Part 2.21 of the Disclosure Schedule, no event has occurred, and no claim, dispute or other condition or circumstance exists, that could reasonably be expected to directly or indirectly give rise to or serve as a basis for the commencement of any such Proceeding. Except as set forth in Part 2.21 of the Disclosure Schedule, since January 1, 1998, no Proceeding has been commenced by or against the Seller Corporations. The Seller has delivered to Parent accurate and complete copies of all pleadings, correspondence and other written materials (to which the Seller has access) that relate to the Proceedings identified in Part 2.21 of the Disclosure Schedule. There is no Order to which the Seller Corporations, or any of the assets owned or used by the Seller Corporations, is subject, and no Related Party is subject to any Order that relates to the Seller Corporations' businesses or to any of the assets of the Seller Corporations. To the best of the knowledge of the Seller, no employee of the Seller Corporations is subject to any Order that may prohibit employee from engaging in or continuing any conduct, activity or practice relating to the business of the Seller Corporations. There is no proposed Order that, if issued or otherwise put into effect, (i) could reasonably be expected to have an adverse effect on the business, condition, assets, liabilities, operations, financial performance, net income or prospects of the Seller or on the ability of the Seller to comply with or perform any covenant or obligation under any of the Transactional Agreements, or (ii) could reasonably be expected to have the effect of preventing, delaying, making illegal or otherwise interfering with any of the Transactions.
2.22 Authority; Binding Nature Of Agreements.
(a) The Seller has the absolute and unrestricted right, power and authority to enter into and (subject to the approval of the Acquisition and the Plan of Dissolution by the Required Shareholder Vote) to perform its obligations under each of the Transactional Agreements to which it is or may become a party; and, subject to the approval of the Acquisition and the Plan of Dissolution by the Required Shareholder Vote (as defined in Section 2.22(b)), the execution, delivery and performance by the Seller of the Transactional Agreements to which it is or may become a party have been duly authorized by all necessary action on the part of the Seller and its board of directors and officers. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. Upon the execution of each of the other Transactional Agreements at the Closing, each of such other Transactional Agreements to which the Seller is a party will constitute the legal, valid and binding obligation of the Seller and will be enforceable against the Seller in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.
(b) The affirmative vote of the holders of a majority of the shares of capital stock of the Seller outstanding on the record date for the Persons entitled to vote on the Acquisition are the only votes of the holders of any class or series of the Seller's capital stock necessary to approve the