UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 13, 2015
VRINGO, INC.
(Exact Name of Registrant as Specified
in its Charter)
| Delaware |
001-34785 |
20-4988129 |
|
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification No.) |
780 Third Avenue, 12th Floor,
New York, NY 10017
(Address of Principal Executive Offices
and Zip Code)
Registrant’s telephone number,
including area code: (212) 309-7549
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ |
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
|
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
|
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
|
| Item 1.01 | Entry into a Material Definitive Agreement. |
On October 15, 2015, Vringo, Inc. (the “Company”)
entered into a Stock Purchase Agreement (the “Purchase Agreement”) with, and completed the acquisition of, International
Development Group Limited, a Maryland corporation (“IDG”), each of the holders of the capital stock of IDG (the “Sellers”)
and the Sellers’ representative.
Pursuant to the Purchase Agreement, the
Company acquired 100% of the capital stock of IDG, including two of IDG’s subsidiaries, fliCharge International Ltd., in
which IDG owns 70% of the capital stock and controls the operations, and the wholly-owned Group Mobile International Ltd. fliCharge
owns patented conductive wire-free charging technology and is focused on innovation, sales, manufacturing and licensing core technology
to large corporations in various industries. Group Mobile is a company with full service technical and customer support in rugged
computers, mobile devices and accessories.
In consideration for the acquisition, the
Company issued an aggregate of 1,609,167 shares of the Company’s newly designated Series B Convertible Preferred Stock (“Series
B Preferred Stock”), par value $0.01 per share, of which 1,604,167 shares were issued to the Sellers and 5,000 shares were
issued to IDG’s legal counsel as compensation. In addition, 240,625 shares of Series B Preferred Stock will be held in escrow
to secure certain of the Sellers’ indemnity obligations under the Purchase Agreement for a period of up to 12 months. The
1,609,167 shares of Series B Preferred Stock are convertible into an aggregate of 16,091,670 shares of the Company’s common
stock, par value $0.01 per share. In addition, the Company has issued to one of the Sellers 575,000 shares of the Company’s
unregistered common stock in consideration of his forgiveness of debt.
The shares of Series B Preferred Stock were
issued pursuant to the terms of the Certificate of Designations of Preferences, Rights and Limitations of Series B Convertible
Preferred Stock (the “Certificate of Designations”), filed with the Secretary of State of the State of Delaware at
closing. A summary of the material terms of the Series B Preferred Stock is set forth below.
Designation. The Company has designated
1,609,167 shares of Series B Preferred Stock.
Dividends. The holders of the Series
B Preferred Stock shall be entitled to receive dividends and distributions made to the Company’s holders of common stock,
pro rata to the holders of common stock on an as-converted basis.
Liquidation Preference. Upon liquidation
event (as defined in the Certificate of Designations), any remaining assets of the Company shall be distributed pro rata to the
holders of common stock and the holders of Series B Preferred Stock on an as-converted basis.
Voting. The Series B Preferred Stock
has voting rights pursuant to which each issued and outstanding share of share of Series B Preferred Stock shall be entitled to
the number of votes equal to the number of shares of common stock into which each such share of Series B Preferred Stock is convertible.
Conversion. The Series B Preferred
Stock will automatically be converted into the Company’s shares of common stock immediately upon (i) the Company’s
authorized shares of common stock being increased to an amount sufficient to allow the Company to convert all shares of Series
B Preferred Stock then outstanding into shares of common stock or (ii) the number of issued and outstanding shares of common stock
and shares reserved for issuance being reduced to an amount sufficient to allow the Company to convert all shares of Series B Preferred
Stock then outstanding into shares of common stock. If the automatic conversion does not occur at the Company’s upcoming
annual meeting, then each share of Series B Preferred Stock shall automatically be converted into shares of common stock, up to
and to the extent that the Company has authorized shares that are not reserved for other issuances. Each share of Series B Preferred
Stock will be convertible into a fixed conversion rate of 10 shares of common stock per one share of Series B Preferred Stock,
subject to certain adjustments.
The Purchase Agreement also contains representations,
warranties and covenants customary for transactions of this type.
The foregoing descriptions of the Certificate
of Designations, the Purchase Agreement and the transactions contemplated thereby do not purport to be complete and are qualified
in their entirety by reference to Exhibit 3.1 and Exhibit 10.1, respectively. Copies of the Certificate of Designations and the
form of Purchase Agreement are attached hereto as Exhibit 3.1 and Exhibit 10.1, respectively, and are incorporated herein by reference.
In connection with the acquisition, the
Company also entered into a Consulting Agreement with IDG’s former Chief Executive Officer and director for an initial term
of six months, which may be extended on a month-to-month basis or longer thereafter, and the payment of $9,000 per month.
In connection with the entry into the Purchase
Agreement, the Company issued to a finder a warrant to purchase up to an aggregate of 500,000 shares of common stock of the Company,
at an exercise price of $0.50 per share and expiring on April 15, 2021 (the “Warrant”).
The foregoing description of the Warrant
does not purport to be complete and is qualified in its entirety by reference to Exhibit 4.1. A copy of the form of the Warrant
is attached hereto as Exhibit 4.1, and is incorporated herein by reference.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information set forth above and referenced
under Item 1.01 that relates to the closing of the transactions is hereby incorporated by reference into this Item 2.01.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information set forth above and referenced
under Item 1.01 that relates to the issuance of the Series B Preferred Stock, the common stock, and the Warrant is hereby incorporated
by reference into this Item 3.02. The issuance of the Series B Preferred Stock, the common stock and the Warrant was made in reliance
on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
| Item 3.03 | Material Modification to Rights of Security Holders. |
The information set forth above and referenced
under Item 1.01 that relates to the Certificate of Designations is hereby incorporated by reference into this Item 3.03.
| Item 5.02 | Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e)
On October 13, 2015, the Company entered into an amendment to the existing employment agreement with each of Andrew D. Perlman,
the Company’s Chief Executive Officer, Anastasia Nyrkovskaya, the Company’s Chief Financial Officer, and David L. Cohen,
the Company’s Chief Legal and Intellectual Property Officer. Pursuant to the amendments, the employment period under each
of the employment agreement was extended to December 31, 2017. In addition, the annual base salary of Ms. Nyrkovskaya and Mr. Cohen
was increased from $315,000 to $325,000.
The foregoing description of the amendments
does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4, respectively.
Copies of the amendments are attached hereto as Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4, respectively, and are incorporated
herein by reference.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year. |
The information set forth above and referenced
under Item 1.01 that relates to the Certificate of Designations is hereby incorporated by reference into this Item 5.03.
| Item 7.01 | Regulation FD Disclosure. |
On October 16, 2015, the Company issued
a press release announcing the entry into the Purchase Agreement and the closing of the acquisition described under Item 1.01 of
this Current Report on Form 8-K. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 7.01, including
Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be incorporated
by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as otherwise expressly
stated in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
|
Exhibit
Number |
|
Description of Exhibits |
| 3.1 |
|
Certificate of Designations of Preferences, Rights and Limitations of Series B Convertible Preferred Stock. |
| 4.1 |
|
Form of Warrant. |
| 10.1 |
|
Form of Stock Purchase Agreement, dated as of October 15, 2015, by and between Vringo, Inc., International Development Group Limited, the sellers party thereto and the sellers’ representative. |
| 10.2 |
|
Amendment No. 2 to Employment Agreement, dated October 13, 2015, by and between Vringo, Inc. and Andrew D. Perlman. |
| 10.3 |
|
Amendment No. 1 to Employment Agreement, dated October 13, 2015, by and between Vringo, Inc. and Anastasia Nyrkovskaya. |
| 10.4 |
|
Amendment No. 1 to Employment Agreement, dated October 13, 2015, by and between Vringo, Inc. and David L. Cohen. |
| 99.1 |
|
Press release, dated October 16, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
VRINGO, INC. |
| |
|
| Date: October 16, 2015 |
By: |
/s/ Andrew
D. Perlman |
| |
|
Name: |
Andrew D. Perlman |
| |
|
Title: |
Chief Executive Officer |
Exhibit 3.1
VRINGO,
INC.
CERTIFICATE
OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
WHEREAS,
the Amended and Restated Certificate of Incorporation of Vringo, Inc., a Delaware corporation (the "Corporation")
provides for a class of its authorized stock known as preferred stock, comprised of 5,000,000 shares, issuable from time to
time in one or more series;
WHEREAS,
the Board of Directors of the Corporation is authorized to fix the dividend rights, voting rights, conversion rights, redemption
privileges and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting
any Series and the designation thereof, of any of them; and
WHEREAS,
it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid, to fix the rights, preferences,
restrictions and other matters relating to a series of the preferred stock, which shall consist of ONE MILLION SIX HUNDRED NINE
THOUSAND ONE HUNDRED SIXTY SEVEN (1,609,167) shares of the preferred stock which the Corporation has the authority to issue, classified
as Series B Convertible Preferred Stock, as follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors of the Corporation does hereby provide for the issuance of a series of
preferred stock for cash or exchange of other securities, rights, or property and does hereby fix and determine the rights, preferences,
restrictions and other matters relating to such series of preferred stock as follows:
TERMS
OF PREFERRED STOCK
1. Designation
and Amount. The class of preferred stock hereby classified shall be designated the “Series B Convertible Preferred Stock”.
The initial number of authorized shares of the Series B Convertible Preferred Stock shall be ONE MILLION SIX HUNDRED NINE THOUSAND
ONE HUNDRED SIXTY SEVEN (1,609,167), which shall not be subject to increase without the consent of the holders of a majority of
the then outstanding shares of Series B Convertible Preferred Stock. Each share of the Series B Convertible Preferred Stock shall
have a par value of $0.01.
2. Dividends.
From and after the first date of issuance of any shares of Series B Convertible Preferred Stock (the “Initial Issuance
Date”), the holders of Series B Convertible Preferred Stock (each, a “Holder” and collectively, the
“Holders”) shall be entitled to receive such dividends paid and distributions made to the holders of common
stock, par value $0.01 per share ( the “Common Stock”), pro rata to the holders of Common Stock
to the same extent as if such Holders had converted the Series B Convertible Preferred Stock into Common Stock (without regard
to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends
and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders
of Common Stock.
3. Liquidation
Preference. Upon any Liquidation Event (as defined below), after provision for payment of all debts and liabilities of the
Corporation, any remaining assets of the Corporation shall be distributed pro rata to the holders of Common Stock
and the holders of Series B Convertible Preferred Stock as if the Series B Convertible Preferred Stock had been converted into
shares of Common Stock pursuant to the provisions of Section 6 hereof immediately prior to such distribution. For purposes of
this Certificate of Designation, a "Liquidation Event" means the voluntary or involuntary liquidation, dissolution
or winding up of the Corporation or its subsidiaries or the sale of assets of which constitute all or substantially all of the
assets of the business of the Corporation and its Subsidiaries taken as a whole, in a single transaction or series of transactions.
4. Fundamental
Transactions.
(a) Certain
definitions. For purposes of this Certificate of Designation, the following definitions shall apply:
(i) "Business
Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
(ii) "Exchange
Act" means the Securities Exchange Act of 1934, as amended.
(iii) "Eligible
Market" means the New York Stock Exchange, Inc., the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market,
the NASDAQ Capital Market and the Over-the-Counter Bulletin Board.
(iv) "Fundamental
Transaction" means that the Corporation shall (or in the case of clause (F) any "person" or "group"
(as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act)), directly or indirectly, in one or more
related transactions, (A) consolidate or merge with or into (whether or not the Corporation is the surviving corporation) another
entity, or (B) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Corporation to another entity, or (C) allow another entity or entities to make a purchase, tender or exchange offer that is
accepted by the holders of more than 50% of the outstanding shares of Voting Stock (not including any shares of Voting Stock held
by the entity or entities making or party to, or associated or affiliated with the entity or entities making or party to, such
purchase, tender or exchange offer), or (D) consummate a stock purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another entity whereby such other entity
acquires more than the 50% of the outstanding shares of Voting Stock (not including any shares of Voting Stock held by the other
entity or other entities making or party to, or associated or affiliated with the other entities making or party to, such stock
purchase agreement or other business combination), or (E) reorganize, recapitalize or reclassify its Common Stock, or (F) become
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of
the aggregate ordinary voting power represented by issued and outstanding Voting Stock.
(v) "Parent
Entity" of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(vi) "Person"
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.
(vii) "Required
Holders" means the holders of record of a majority of the then outstanding shares of Series B Convertible Preferred Stock.
(viii) “Stated
Value” shall mean $6.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations,
reclassifications, combinations, reverse stock splits or other similar events relating to the Series B Convertible Preferred Stock
after the Initial Issuance Date.
(ix) "Successor
Entity" means the Person, which may be the Corporation, formed by, resulting from or surviving any Fundamental Transaction
or the Person with which such Fundamental Transaction shall have been made, provided that if such Person is not a publicly traded
entity whose common stock or equivalent equity security is quoted or listed for trading on an Eligible Market, Successor Entity
shall mean such Person's Parent Entity.
(x) "Trading
Day" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the shares
of Common Stock are then traded; provided that "Trading Day" shall not include any day on which the shares of Common
Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the shares of Common Stock are
suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate
in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time).
(xi) "Voting
Stock" means capital stock of the class or classes pursuant to which the holders thereof have the general voting power
to elect or the general power to appoint, at least a majority of the board of directors, managers or trustees thereof (irrespective
of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the
happening of any contingency).
(b) Assumption.
The Corporation shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing
all of the obligations of the Corporation under this Certificate of Designation in accordance with the provisions of this Section
4 pursuant to written agreements in form and substance reasonably satisfactory to the Required Holders and approved by the Required
Holders prior to such Fundamental Transaction, including agreements to deliver to each Holder of Series B Convertible Preferred
Stock in exchange for such Series B Convertible Preferred Stock a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Certificate of Designation including, without limitation, having a stated
value equal to the Stated Value of the Series B Convertible Preferred Stock held by such Holder and having similar ranking to
the Series B Convertible Preferred Stock, and satisfactory to the Required Holders and (ii) the Successor Entity (including its
Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon
the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of this Certificate of Designation referring to the "Corporation"
shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of
the obligations of the Corporation under this Certificate of Designation with the same effect as if such Successor Entity had
been named as the Corporation herein. Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to
the Holder confirmation that there shall be issued upon conversion of the Series B Convertible Preferred Stock at any time after
the consummation of the Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other
property) issuable upon the conversion of the Series B Convertible Preferred Stock prior to such Fundamental Transaction (without
regard to any limitations on the conversion of the Series B Convertible Preferred Stock), such shares of publicly traded common
stock (or their equivalent) of the Successor Entity, as adjusted in accordance with the provisions of this Certificate of Designation,
which the Holder would have been entitled to receive had such Holder converted the Series B Convertible Preferred Stock in full
(without regard to any limitations on conversion) immediately prior to such Fundamental Transaction. The provisions of this Section
shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations
on the conversion of the Series B Convertible Preferred Stock.
5. Voting
Rights.
(a) General.
Each issued and outstanding share of share of Series B Convertible Preferred Stock shall be entitled to the number of votes equal
to the number of shares of Common Stock into which each such share of Series B Convertible Preferred Stock is convertible (as
adjusted from time to time pursuant to Section 4 hereof).
(b) Series
B Convertible Preferred Stock Protective Provisions. In addition to any other rights provided by law, the Corporation shall
not and shall not permit any direct or indirect Subsidiary (as defined below) of the Corporation to, without first obtaining the
affirmative vote or written consent of the holders of a majority of the outstanding shares of Series B Convertible Preferred Stock:
(i) increase
the authorized number of shares of Series B Convertible Preferred Stock; or
(ii) amend,
alter or repeal the preferences, special rights or other powers of the Series B Convertible Preferred Stock so as to affect adversely
the Series B Convertible Preferred Stock.
6. Conversion.
Each share of Series B Convertible Preferred Stock shall automatically be converted into shares of Common Stock immediately upon
(i) the Corporation’s authorized shares of Common Stock being increased to an amount sufficient to allow the Corporation
to convert all shares of Series B Convertible Preferred Stock then outstanding into shares of Common Stock or (ii) the number
of issued and outstanding shares of Common Stock and shares reserved for issuance being reduced to an amount sufficient to allow
the Corporation to convert all shares of Series B Convertible Preferred Stock then outstanding into shares of Common Stock (each,
a “Series B Automatic Conversion Event”). If a Series B Automatic Conversion Event does not occur following
the Corporation’s Annual Meeting scheduled to be held on November 16, 2015 (as such date may be extended pursuant to any
adjournments of such meeting), then each share of Series B Convertible Preferred Stock shall automatically be converted into shares
of Common Stock, up to and to the extent that the Corporation has authorized shares that are not reserved for other issuances
(the “Partial Conversion Event”). The number of shares to be converted pursuant to the Partial Conversion Event
shall be allocated pro rata among the Holders based on the number of shares of Series B Convertible Preferred Stock held by each
Holder at the time of the Partial Conversion Event. Upon the occurrence of a Series B Automatic Conversion Event or Partial Conversion
Event, the applicable shares of Series B Preferred Stock shall be automatically converted into the number of shares of Common
Stock into which such shares of Series B Convertible Preferred Stock are then convertible pursuant to this Section 6 without any
further action by any holder of such shares and whether or not the certificate(s) representing such shares are surrendered to
the Corporation or its transfer agent.
(a) Certain
definitions. For purposes of this Certificate of Designation, the following definitions shall apply:
(i) "Bloomberg"
means Bloomberg Financial Markets.
(ii) "Conversion
Amount" means the Stated Value.
(iii) "Conversion
Price" means $0.60, subject to adjustment as provided herein.
(iv) "Subsidiary"
means, with respect to the Corporation, any entity in which the Corporation, directly or indirectly, owns any of the capital stock
or holds an equity or similar interest.
(b) Conversion.
The number of shares of Common Stock issuable upon conversion of each share of Series B Convertible Preferred Stock pursuant to
this Section 6 shall be determined by multiplying each such share of Series B Convertible Preferred Stock by the fraction set
forth below (the "Conversion Rate"):
Conversion
Amount
Conversion Price
No
fractional shares of Common Stock are to be issued upon the conversion of any Series B Convertible Preferred Stock, but rather
the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number.
The
applicable Conversion Rate and Conversion Price from time to time in effect is subject to adjustment as hereinafter provided.
(c) Mechanics
of Conversion. The conversion of Series B Convertible Preferred Stock shall be conducted in the following manner:
(i) Upon
the occurrence of a Series B Automatic Conversion Event or if a Partial Conversion Event is to occur and in any event within ten
(10) days after receipt of notice, by mail, postage prepaid from the Corporation of the occurrence of such event, each holder
of record of shares of Series B Convertible Preferred Stock being converted shall (A) transmit by facsimile (or otherwise deliver)
a copy of a properly completed notice of conversion executed by the registered Holder of the Series B Convertible Preferred Stock
subject to such conversion in the form attached hereto as Exhibit I (the "Conversion Notice") to the Corporation
and if the Corporation has appointed a registered transfer agent, the Corporation’s registered transfer agent (the "Transfer
Agent") (if the Corporation does not have a registered transfer agent, references hereto to the "Transfer Agent"
shall be deemed to be references to the Corporation) and (B) if required by Section 6(c)(iv), surrender to a common carrier for
delivery to the Corporation as soon as practicable following such date the original certificates representing the Series B Convertible
Preferred Stock being converted (or compliance with the procedures set forth in Section 9) (the "Preferred Stock Certificates").
(ii) Corporation's
Response. Upon receipt by the Corporation of a copy of a Conversion Notice, the Corporation shall (A) as soon as practicable,
but in any event within three (3) Trading Days, send, via facsimile, a confirmation of receipt of such Conversion Notice to such
Holder and the Transfer Agent, if applicable, which confirmation shall constitute an instruction to the Transfer Agent to process
such Conversion Notice in accordance with the terms herein and (B) on or before the third (3rd) Trading Day following
the date of receipt by the Corporation of such Conversion Notice (the "Share Delivery Date"), (1) provided the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of shares
of Common Stock to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal
At Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or
its designee, for the number of shares of Common Stock to which the Holder shall be entitled. If the number of shares of Series
B Convertible Preferred Stock represented by the Preferred Stock Certificate(s) submitted for conversion pursuant to a Partial
Conversion Event, as may be required pursuant to Section 6(c)(iv), is greater than the number of shares of Series B Convertible
Preferred Stock being converted, then the Corporation shall or shall direct the Transfer Agent, as soon as practicable and in
no event later than three (3) Business Days after receipt of the Preferred Stock Certificate(s) (the "Preferred Stock
Delivery Date") and at its own expense, issue and deliver to the Holder a new Preferred Stock Certificate representing
the number of shares of Series B Convertible Preferred Stock not converted or it shall direct the Transfer Agent to update the
Holder’s account to reflect the number of shares of Series B Convertible Preferred Stock not converted.
(iii) Corporation's
Failure to Timely Convert.
(A) Cash
Damages. If within three (3) Trading Days after the Corporation's receipt of the facsimile copy of a Conversion Notice the
Corporation shall fail to credit a Holder's balance account with DTC or issue and deliver a certificate to such Holder for the
number of shares of Common Stock to which such Holder is entitled upon such Holder's conversion of Series B Convertible Preferred
Stock (a "Conversion Failure"), and if on or after such Trading Day the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the shares of Common Stock issuable
upon such conversion that the Holder anticipated receiving from the Corporation (a "Buy-In"), then the Corporation
shall, within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder
in an amount equal to the Holder's total purchase price (including brokerage commissions and out-of-pocket expenses, if any) for
the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Corporation's obligation to
deliver such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to
the Holder a certificate or certificates representing such Common Stock and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Sale Price on
the Conversion Date. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation's
failure to timely deliver certificates representing shares of Common Stock upon conversion of the Series B Convertible Preferred
Stock as required pursuant to the terms hereof.
(iv) Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of Series B Convertible Preferred Stock in accordance
with the terms hereof, the Holder thereof shall not be required to physically surrender the Preferred Stock Certificate unless
(A) the full or remaining number of shares of Series B Convertible Preferred Stock represented by the Preferred Stock Certificate
are being converted, in which case the Holder shall deliver such Preferred Stock Certificate to the Corporation promptly following
such conversion, or (B) a Holder has provided the Corporation with prior written notice (which notice may be included in a Conversion
Notice) requesting reissuance of Series B Convertible Preferred Stock upon physical surrender of any Series B Convertible Preferred
Stock. The Holder and the Corporation shall maintain records showing the number of shares of Series B Convertible Preferred Stock
so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Corporation,
so as not to require physical surrender of the certificate representing the Series B Convertible Preferred Stock upon each such
conversion. In the event of any dispute or discrepancy, such records of the Corporation establishing the number of shares of Series
B Convertible Preferred Stock to which the record holder is entitled shall be controlling and determinative in the absence of
manifest error. Notwithstanding the foregoing, if Series B Convertible Preferred Stock represented by a certificate are converted
as aforesaid, a Holder may not transfer the certificate representing the Series B Convertible Preferred Stock unless such Holder
first physically surrenders the certificate representing the Series B Convertible Preferred Stock to the Corporation, whereupon
the Corporation will forthwith issue and deliver upon the order of such Holder a new certificate of like tenor, registered as
such Holder may request, representing in the aggregate the remaining number of shares of Series B Convertible Preferred Stock
represented by such certificate. A Holder and any assignee, by acceptance of a
certificate, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any Series B Convertible
Preferred Stock, the number of shares of Series B Convertible Preferred Stock represented by such certificate may be less than
the number of shares of Series B Convertible Preferred Stock stated on the face thereof. Each certificate for Series B Convertible
Preferred Stock shall bear the following legend:
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR THE SECURITIES LAWS OF ANY U.S. STATE, NOR IS ANY SUCH REGISTRATION CONTEMPLATED. THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
(d) Reservation
of Shares.
(i) The
Corporation shall, upon the happening of the Series B Automatic Conversion Event, reserve and keep available out of its authorized
but unissued stock, for the purposes of effecting the conversion of the Series B Convertible Preferred Stock, such number of its
duly authorized and unissued shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding
Series B Convertible Preferred Stock (the "Required Reserve Amount"). The initial number of shares of Common
Stock reserved for conversions of the Series B Convertible Preferred Stock and each increase in the number of shares so reserved
shall be allocated pro rata among the Holders based on the number of shares of Series B Convertible Preferred Stock held by each
Holder at the time of issuance of the Series B Convertible Preferred Stock or increase in the number of reserved shares, as the
case may be (the "Authorized Share Allocation"). In the event a Holder shall sell or otherwise transfer any of
such Holder's Series B Convertible Preferred Stock, each transferee shall be allocated a pro rata portion of the number of reserved
shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and allocated to any Person which ceases
to hold any Series B Convertible Preferred Stock (other than pursuant to a transfer of Series B Convertible Preferred Stock in
accordance with the immediately preceding sentence) shall be allocated to the remaining Holders of Series B Convertible Preferred
Stock, pro rata based on the number of shares of Series B Convertible Preferred Stock then held by such Holders. Before taking
any action that would cause an adjustment reducing the Conversion Price below the then par value of the shares of Common Stock
issuable upon conversion of the Series B Convertible Preferred Stock, the Corporation will take any corporate action that may,
in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully-paid and nonassessable
shares of such Common Stock at such adjusted conversion price.
(e) Dispute
Resolution. In the case of a dispute as to the arithmetic calculation of the Conversion Rate, the Corporation shall issue
to the Holder the number of shares of Common Stock that is not disputed and shall transmit an explanation of the disputed determinations
or arithmetic calculations to the Holder via facsimile within one (1) Business Day of receipt of such Holder's Conversion Notice
or other date of determination. If such Holder and the Corporation are unable to agree upon the determination of the arithmetic
calculation of the Conversion Rate within two (2) Business Days of such disputed determination or arithmetic calculation being
transmitted to the Holder, then the Corporation shall within one (1) Business Day submit via facsimile the disputed arithmetic
calculation of the Conversion Rate to any "big four" international accounting firm. The Corporation shall cause, at
the Corporation's expense (unless the accounting firm determines in favor of the Corporation, in which case the Holder shall be
responsible for such expense), the accountant to perform the determinations or calculations and notify the Corporation and the
Holders of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations.
Such accountant's determination or calculation, as the case may be, shall be binding upon all parties absent error.
(f) Record
Holder. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Series B Convertible
Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion
Date.
(g) Effect
of Conversion. All shares of Series B Convertible Preferred Stock which shall have been surrendered for conversion as herein
provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any,
to receive notices and to vote, shall forthwith cease and terminate except only the right of the holder thereof to receive shares
of Common Stock in exchange therefor and payment of any accrued but unpaid dividends thereon (whether or not declared). Subject
to Section 6(c)(iii)(B), any shares of Series B Convertible Preferred Stock so converted shall be retired and canceled and shall
not be reissued, and the Corporation may from time to time take such appropriate action as may be necessary to reduce the authorized
Series B Convertible Preferred Stock accordingly.
(h) Transfer
Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Series B Convertible Preferred Stock
shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of
the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable
in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than
that of the Holder of such shares of Series B Convertible Preferred Stock so converted and the Corporation shall not be required
to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to
the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been
paid.
7. Anti-Dilution
Provisions. The Conversion Price shall be subject to adjustment from time to time in accordance with this Section 7.
(a) Certain
Definitions. For purposes of this Certificate of Designations, the following definitions shall apply:
(i) "Convertible
Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exchangeable
or exercisable for Common Stock.
(ii) "Options"
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.
(iii) "Principal
Market" means the Eligible Market that is the principal securities exchange market for the Common Stock.
(b) Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. If the Corporation at any time after the Initial Issuance
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock into
a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.
If the Corporation at any time after the Initial Issuance Date combines (by combination, reverse stock split or otherwise) its
outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination
will be proportionately increased.
(c) Notices.
(i) Immediately
upon any adjustment of the Conversion Rate and Conversion Price pursuant to Section 7 hereof, the Corporation will give written
notice thereof sent by mail, first class, postage prepaid to each Holder at its address appearing on the stock register, setting
forth in reasonable detail, and certifying, the calculation of such adjustment. In the case of a dispute as to the determination
of such adjustment, then such dispute shall be resolved in accordance with the procedures set forth in Section 6(e).
(ii) Except
as otherwise required by law, the Corporation will give written notice to each Holder at least ten (10) Business Days prior to
the date on which the Corporation closes its books or takes a record (I) with respect to any dividend or distribution upon the
Common Stock, (II) with respect to any pro rata subscription offer to holders of Common Stock or (III) for determining rights
to vote with respect to any Twenty Percent Issuance, any Fundamental Transaction or any Liquidation Event.
(iii) The
Corporation will also give written notice to each Holder at least ten (10) Business Days prior to the date on which any Twenty
Percent Issuance, any Fundamental Transaction or any Liquidation Event will take place.
8. Status
of Converted Stock. In the event any shares of Series B Convertible Preferred Stock shall be converted pursuant to Section
6 hereof, the shares so converted shall be canceled and shall not be issuable by the Corporation.
9. Lost
or Stolen Certificates. Upon receipt by the Corporation of evidence reasonably satisfactory to the Corporation of the loss,
theft, destruction or mutilation of any Series B Convertible Preferred Stock Certificates representing the Series B Convertible
Preferred Stock, and, in the case of loss, theft or destruction, of an indemnification undertaking (with surety, if reasonably
requested by the Corporation) by the holder thereof to the Corporation in customary form and, in the case of mutilation, upon
surrender and cancellation of the Series B Convertible Preferred Stock Certificate(s), the Corporation shall execute and deliver
new preferred stock certificate(s) of like tenor and date; provided, however, the Corporation shall not be obligated
to re-issue preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series B Convertible
Preferred Stock into Common Stock.
10. Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designation
shall be cumulative and in addition to all other remedies available under this Certificate of Designation, at law or in equity
(including a decree of specific performance and/or other injunctive relief). No remedy contained herein shall be deemed a waiver
of compliance with the provisions giving rise to such remedy. Nothing herein shall limit a holder of Series B Convertible Preferred
Stock's right to pursue actual damages for any failure by the Corporation to comply with the terms of this Certificate of Designation.
The Corporation covenants to each holder of Series B Convertible Preferred Stock that there shall be no characterization concerning
this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion
and the like (and the computation thereof) shall be the amounts to be received by the holder of Series B Convertible Preferred
Stock thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the
performance thereof). The Corporation acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the holders of Series B Convertible Preferred Stock and that the remedy at law for any such breach may be inadequate. The Corporation
therefore agrees that, in the event of any such breach or threatened breach, the holders of Series B Convertible Preferred Stock
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity
of showing economic loss and without any bond or other security being required.
11. Notice.
Whenever notice or other communication is required to be given hereunder, unless otherwise provided herein, such notice shall
be given in accordance with contact information provided by each Holder to the Corporation and set forth in the register for the
Series B Convertible Preferred Stock maintained by the Corporation as set forth in Section 14.
12.
Failure or Indulgence Not Waiver. No failure or delay on the part of any holder of Series B Convertible Preferred Stock
in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
13. Transfer
of Series B Convertible Preferred Stock. A Holder may assign some or all of the Series B Convertible Preferred Stock and the
accompanying rights hereunder held by such Holder without the consent of the Corporation; provided that such assignment
is in compliance with applicable securities laws.
14. Series
B Convertible Preferred Stock Register. The Corporation shall maintain at its principal executive offices (or such other office
or agency of the Corporation as it may designate by notice to the Holders), a register for the Series B Convertible Preferred
Stock, in which the Corporation shall record the name and address of the persons in whose name the Series B Convertible Preferred
Stock have been issued, as well as the name and address of each transferee. The Corporation may treat the person in whose name
any Series B Convertible Preferred Stock is registered on the register as the owner and holder thereof for all purposes, notwithstanding
any notice to the contrary, but in all events recognizing any properly made transfers.
15. Stockholder
Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Corporation pursuant to
the Delaware General Corporation Law (“DGCL”), this Certificate of Designation or otherwise with respect to
the issuance of the Series B Convertible Preferred Stock or the Common Stock issuable upon conversion thereof may be effected
by written consent of the Corporation's stockholders or at a duly called meeting of the Corporation's stockholders, all in accordance
with the applicable rules and regulations of the DGCL and the applicable provisions hereof. This provision is intended to comply
with the applicable sections of the DGCL permitting stockholder action, approval and consent affected by written consent in lieu
of a meeting.
16. General
Provisions. In addition to the above provisions with respect to Series B Convertible Preferred Stock, such Series B Convertible
Preferred Stock shall be subject to and be entitled to the benefit of the provisions set forth in the Certificate of Incorporation
of the Corporation with respect to preferred stock of the Corporation generally.
17. Disclosure.
Upon receipt or delivery by the Corporation of any notice in accordance with the terms of this Certificate of Designation, unless
the Corporation has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Corporation or any of its Subsidiaries, the Corporation shall within one (1) Business Day after any such receipt
or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event
that the Corporation believes that a notice contains material, nonpublic information relating to the Corporation or its Subsidiaries,
the Corporation so shall indicate to the Holders contemporaneously with delivery of such notice, and in the absence of any such
indication, the Holders shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic
information relating to the Corporation or its Subsidiaries.
[signature
page follows]
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be signed by the undersigned this 15th day of October,
2015.
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VRINGO, INC. |
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By: |
/s/
Andrew D. Perlman |
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Name: |
Andrew D. Perlman |
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Title: |
Chief Executive Officer |
EXHIBIT
I
VRINGO,
INC.
The
undersigned hereby elects to convert the number of shares of Series B Convertible Preferred Stock, par value $0.01 per share (the
"Series B Convertible Preferred Stock"), of Vringo, Inc., a Delaware corporation (the "Corporation"),
indicated below into shares of Common Stock, par value $0.01 per share (the "Common Stock"), of the Corporation,
as of the date specified below.
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Number of shares of Series B Convertible Preferred Stock to be converted: |
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Stock certificate no(s). of Series B Convertible Preferred Stock to be converted: |
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Tax ID Number (If applicable): |
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Conversion Price: |
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Number of shares of Common Stock to be issued: |
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Please issue the Common
Stock into which the Series B Convertible Preferred Stock are being converted in the following name and to the following address:
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Issue to: |
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Address: |
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Telephone Number: |
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Facsimile Number: |
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Authorization: |
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Account
Number (if electronic book entry transfer): |
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Transaction
Code Number (if electronic book entry transfer): |
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Exhibit 4.1
THE SECURITIES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE
IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
| Warrant No. |
Number of Shares: _____ |
Date of Issuance: October 15, 2015 (“Issuance
Date”)
VRINGO, INC.
Form Common Stock Warrant
Vringo, Inc.
(the “Company”), for value received, hereby certifies that _____________, or its registered assigns (the “Registered
Holder”), is entitled, subject to the terms of this Common Stock Warrant (the “Warrant”) set forth
below, to purchase from the Company, at any time after the date hereof and on or before April 15, 2021 (the “Expiration
Date”), up to ____________ shares of common stock of the Company (the “Warrant Stock”), par value
$0.01 per share (the “Common Stock”), at a per share exercise price (the “Exercise Price”)
equal to fifty cents ($0.50) per share (subject to adjustment as set forth in Section 2).
1. Exercise.
(a) Method of
Exercise. This Warrant may be exercised by the Registered Holder, in whole or in part, by delivering the form appended
hereto as Exhibit A duly executed by such Registered Holder (the “Exercise Notice”), at the principal
office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of such exercise,
accompanied by payment in full of the Exercise Price payable with respect to the number of shares of Warrant Stock purchased upon
such exercise. The Exercise Price must be paid by cash, check or wire transfer in immediately available funds for the Warrant Stock
being purchased by the Registered Holder.
(b) Effective
Time of Exercise. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of
business on the day on which the Exercise Notice has been delivered to the Company (the “Exercise Date”) as
provided in this Section 1. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall
be issuable upon such exercise as provided in Section 1(c) below shall be deemed to have become the holder or holders of record
of the Warrant Stock represented by such certificates.
(c) Delivery
to Holder. As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within three
(3) business days thereafter (the “Warrant Stock Delivery Date”), the Company will cause to be issued in the
name of, and delivered to, the Registered Holder, or as such Registered Holder (upon payment by such Registered Holder of any applicable
transfer taxes) may direct:
(i) a certificate
or certificates for the number of shares of Warrant Stock to which such Registered Holder shall be entitled, and
(ii) in case such
exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face
or faces thereof for the number of shares of Warrant Stock equal (giving effect to any adjustment therein) to the number of such
shares called for on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise
as provided in Section 1(a).
(d) Registered
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Registered Holder
shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent (but only to
the extent) that the Registered Holder or any of the Registered Holder’s affiliates, would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below). For purposes of this Section 1(e), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act (as defined herein) and the rules and regulations promulgated thereunder,
it being acknowledged by the Registered Holder that the Company is not representing to the Registered Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Registered Holder is solely responsible for any schedules required
to be filed in accordance therewith. To the extent that the limitation contained in this Section 1(e) applies, the determination
of whether this Warrant is exercisable (in relation to other securities owned by the Registered Holder together with any Affiliates)
and of which portion of this Warrant is exercisable shall be in the sole discretion of the Registered Holder, and the submission
of an Exercise Notice shall be deemed to be the Registered Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by the Registered Holder together with any Affiliates) and of which portion of this Warrant
is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify
or confirm the accuracy of such determination. Upon the written or oral request of a Registered Holder, the Company shall within
two business days confirm orally and in writing to the Registered Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Warrant, by the Registered Holder or its Affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of
the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable
upon exercise of this Warrant. The Registered Holder, upon not less than 61 days’ prior notice to the Company, may increase
or decrease the Beneficial Ownership Limitation provisions of this Section 1(e), provided that the Beneficial Ownership Limitation
shall in no event exceed 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock upon exercise of this Warrant held by the Registered Holder and the provisions of this Section 1(e) shall
continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the
Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
2. Adjustments.
(a) Stock Splits
and Dividends. If the outstanding shares of the Company’s Common Stock shall be subdivided into a greater number
of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior
to such subdivision or at the record date of such dividend shall, simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend, be proportionately reduced and the number of Warrant Stock issuable upon exercise
of the Warrant shall be proportionately increased. If the outstanding shares of Common Stock shall be combined into a smaller number
of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such
combination, be proportionately increased and the number of shares of Warrant Stock issuable upon exercise of the Warrant shall
be proportionately decreased.
(b) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation
of the Company with or into another person, (ii) the Company effects any sale of all or substantially all of its assets in one
or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another person) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property
or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (each, a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Registered Holder shall have the right to receive, for each share of Warrant
Stock that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the
number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such merger, consolidation
or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such event. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Registered
Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Registered Holder a new warrant consistent with the foregoing provisions
and evidencing the Registered Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to
comply with the provisions of this Section 2(b) and insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
(c) Adjustment
Certificate. When any adjustment is required to be made in the Exercise Price pursuant to this Section 2, the Company shall
promptly mail to the Registered Holder a certificate setting forth (i) a brief statement of the facts requiring such adjustment,
(ii) the Exercise Price after such adjustment and (iii) the kind and amount of stock or other securities or property
into which this Warrant shall be exercisable after such adjustment.
3. Transfers.
(a) Unregistered
Security. The holder of this Warrant acknowledges that this Warrant has not been registered under the Securities Act and
agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued
upon its exercise in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or
such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or
state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration
and qualification are not required.
(b) Transferability.
Subject to the provisions of Section 3(a) hereof, this Warrant and all rights hereunder are transferable in whole to (i) any entity
controlling, controlled by or under common control of the Registered Holder, or (ii) to any other proposed transferee by surrendering
the Warrant with a properly executed assignment (in the form of Exhibit B hereto) at the principal office of the Company.
(c) Warrant
Register. The Company will maintain a register containing the names and addresses of the Registered Holders of this Warrant.
Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant
as the absolute owner hereof for all purposes; provided, however, that if this Warrant is properly assigned in blank,
the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding
any notice to the contrary. Any Registered Holder may change such Registered Holder’s address as shown on the warrant register
by written notice to the Company requesting such change.
4. Termination.
This Warrant (and the right to purchase securities upon exercise hereof) shall terminate at 5:00 p.m., Eastern Time, on the Expiration
Date.
5. Notices
of Certain Transactions. In case:
(a) the Company shall
take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to
subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to subscribe
for or purchase any shares of stock of any class or any other securities, or to receive any other right, or
(b) of any capital
reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company,
any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the
Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or
(c) of the voluntary
or involuntary dissolution, liquidation or winding-up of the Company, or
(d) of any Fundamental
Transaction,
then, and in each such case, the Company
will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date
on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation, winding-up or Fundamental Transaction is to take place, and the time, if any is to
be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up) are to be determined.
Failure to send such notice shall not act to invalidate any such transaction.
6. Reservation
of Stock. The Company covenants that at all times it will have authorized, reserve and keep available, solely for the issuance
and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant. The Company covenants that all Warrant Stock that may be issued
upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by
this Warrant, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges in respect
of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). The Company further
covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for the shares of Warrant Stock upon the exercise of the purchase
rights under this Warrant by the Registered Holder. The Company will take all such reasonable action as may be necessary to assure
that such Warrant Stock may be issued as provided herein without violation of any applicable law or regulation.
7. Replacement
of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of
this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.
8. Notices.
Any notice required or permitted by this Warrant shall be in writing and shall be deemed duly given upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the regular mail
as certified or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder,
to the address of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address
set forth on the signature page of this Warrant or as subsequently modified by written notice to the Registered Holder.
9. No Rights
as Stockholder. Until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise any
rights by virtue hereof as a stockholder of the Company.
10. No Fractional
Shares. No fractional shares of Common Stock will be issued in connection with any exercise hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall round the amount of Warrant Stock issuable to the nearest whole share.
11. Amendment
or Waiver. Any term of this Warrant may be amended or waived upon written consent of the Company and the Registered Holder.
12. Headings.
The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision
of this Warrant.
13. Governing
Law. This Warrant and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall
be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles
of conflicts of law.
14. Representations
and Covenants of the Registered Holder. This Warrant has been entered into by the Company in reliance upon the following
representations and covenants of the Registered Holder:
(a) Investment
Purpose. The Registered Holder is acquiring the Warrant and the Warrant Stock issuable upon exercise of the Warrant for
its own account, not as a nominee or agent and with no present intention of selling or otherwise distributing any part thereof.
(b) Private
Issue. The Registered Holder understands: (i) that the Warrant is not registered under the Securities Act or qualified
under applicable state securities laws on the ground that the issuance contemplated by this Warrant will be exempt from the registration
and qualifications requirements thereof pursuant to Section 4(2) of the Securities Act and any applicable state securities laws,
and (ii) that the Company’s reliance on such exemption is predicated on the representations set forth in this Section 14.
(c) Disposition
of Registered Holder’s Rights. In no event will the Registered Holder make a disposition of the Warrant or the Warrant
Stock issuable upon exercise of the Warrant in the absence of (i) an effective registration statement under the Securities
Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any
applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the
Company, that such registration and qualification are not required. Whenever the restrictions imposed hereunder shall terminate,
as hereinabove provided, the Registered Holder or holder of a share of Common Stock then outstanding as to which such restrictions
have terminated shall be entitled to receive from the Company, without expense to such holder, one or more new certificates for
the Warrant or for such shares of Common Stock not bearing any restrictive legend.
(d) Financial
Risk. The Registered Holder has such business and financial experience as is required to give it the capacity to protect
its own interests in connection with its investment.
(e) Accredited
Investor. The Registered Holder is an “accredited investor” as defined by Rule 501 of Regulation D promulgated
under the Securities Act.
IN WITNESS WHEREOF, the parties have executed
this Warrant as of the date first above written.
| |
VRINGO, INC. |
| |
|
|
| |
By: |
|
| |
|
Name: Anastasia Nyrkovskaya |
| |
|
Title: Chief Financial Officer |
VRINGO, INC.
Exhibit A
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects
to exercise the within Warrant to the extent of purchasing _____________ shares of Common Stock of Vringo, Inc., a Delaware
corporation, and hereby makes payment of $___________ in payment therefore, all in accordance with the terms and conditions
of this Warrant.
| Warrant No.: |
|
| Name of Holder: |
|
| Signature: |
|
| Signature of Joint Holder (if applicable): |
|
| Date: |
|
| DWAC INSTRUCTIONS |
|
| Broker Name and DTC Number: |
|
| Account Number at DTC Participant |
|
| (if applicable): |
|
| INSTRUCTIONS FOR ISSUANCE OF STOCK |
| (if other than to the registered holder of the Warrant) |
| Name: |
|
| Address: |
|
| |
|
| Social Security or Taxpayer |
|
| Identification Number of Recipient: |
|
VRINGO, INC.
Exhibit B
WARRANT ASSIGNMENT FORM
FOR VALUE RECEIVED, the Holder hereby sells,
assigns and transfers unto the transferee listed below the right to purchase Common Stock of Vringo, Inc., a Delaware corporation,
represented by this Warrant to the extent of shares as to which such right is exercisable and does hereby irrevocably constitute
and appoint ______________________, Attorney, to transfer the same on the books of the Company with full power of substitution
in the premises.
| Date: |
|
| Warrant No.: |
|
| |
|
| HOLDER |
|
| Name of Holder: |
|
| Signature: |
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| Signature of Joint Holder (if applicable): |
|
| |
|
| TRANSFEREE |
|
| Name of Transferee: |
|
| Address: |
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| |
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| Social Security or Taxpayer |
|
| Identification Number: |
|
Exhibit 10.1
STOCK PURCHASE AGREEMENT
Dated as of October 15, 2015
Among
Vringo, Inc.,
International Development Group Limited,
The Sellers Party Hereto,
and
The Sellers’ Representative
Table of Contents
| 1. |
DEFINITIONS; CERTAIN RULES OF CONSTRUCTION |
1 |
| |
|
|
| 2. |
PURCHASE AND SALE OF SHARES |
8 |
| |
|
|
|
| |
2.1 |
Purchase and Sale of Shares |
8 |
| |
2.2 |
The Closing |
9 |
| |
2.3 |
Withholding Rights |
9 |
| |
2.4 |
Escrow |
9 |
| |
|
|
|
| 3. |
REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
10 |
| |
|
|
|
| |
3.1 |
Organization; Predecessors |
10 |
| |
3.2 |
Power and Authorization |
10 |
| |
3.3 |
Authorization of Governmental Authorities |
10 |
| |
3.4 |
Noncontravention |
11 |
| |
3.5 |
Capitalization of the Acquired Companies |
11 |
| |
3.6 |
Financial Statements |
12 |
| |
3.7 |
Absence of Undisclosed Liabilities |
12 |
| |
3.8 |
Absence of Certain Developments |
13 |
| |
3.9 |
Debt; Guarantees |
14 |
| |
3.10 |
Ownership of Assets; Sufficiency |
14 |
| |
3.11 |
Accounts Receivable; Accounts Payable |
15 |
| |
3.12 |
Real Property |
15 |
| |
3.13 |
Intellectual Property |
16 |
| |
3.14 |
Legal Compliance; Illegal Payments; Permits |
18 |
| |
3.15 |
Tax Matters |
18 |
| |
3.16 |
Employee Benefit Plans |
20 |
| |
3.17 |
Environmental Matters |
22 |
| |
3.18 |
Contracts |
22 |
| |
3.19 |
Affiliate Transactions |
24 |
| |
3.20 |
Customers and Suppliers |
24 |
| |
3.21 |
Employees |
25 |
| |
3.22 |
Litigation; Governmental Orders |
26 |
| |
3.23 |
Product Warranties |
26 |
| |
3.24 |
Insurance |
26 |
| |
3.25 |
Bank Accounts; Powers of Attorney |
26 |
| |
3.26 |
No Brokers |
26 |
| |
3.27 |
Inventory |
26 |
| |
3.28 |
Disclosure |
27 |
| |
|
|
|
| 4. |
INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF THE SELLERS |
27 |
| |
|
|
|
| |
4.1 |
Organization |
27 |
| |
4.2 |
Power and Authorization |
27 |
| |
4.3 |
Noncontravention |
27 |
| |
4.4 |
Title |
28 |
| |
4.5 |
No Brokers |
28 |
| |
4.6 |
Securities Law Matters |
28 |
| |
4.7 |
Legend |
28 |
| |
4.8 |
Restricted Securities |
29 |
| |
4.9 |
Access to Information |
29 |
| |
4.10 |
Reliance Upon Representations |
29 |
| |
4.11 |
Exculpation |
29 |
| |
|
|
|
| 5. |
REPRESENTATIONS AND WARRANTIES OF THE BUYER |
29 |
| |
|
|
|
| |
5.1 |
Organization |
29 |
| |
5.2 |
Power and Authorization |
30 |
| |
5.3 |
Authorization of Governmental Authorities |
30 |
| |
5.4 |
Noncontravention |
30 |
| |
5.5 |
No Brokers |
30 |
| |
5.6 |
Investment Representation |
30 |
| |
5.7 |
SEC Filings; Financial Statements |
31 |
| |
5.8 |
Capitalization of the Buyer |
31 |
| |
5.9 |
Access to Information |
32 |
| |
|
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| 6. |
COVENANTS |
32 |
| |
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6.1 |
Closing |
32 |
| |
6.2 |
Operation of Business |
32 |
| |
6.3 |
Notices and Consents |
33 |
| |
6.4 |
Buyer’s Access to Premises; Information |
33 |
| |
6.5 |
Notice of Developments |
33 |
| |
6.6 |
Exclusivity |
34 |
| |
6.7 |
Transaction Expenses; Debt |
34 |
| |
6.8 |
Sellers’ Release |
34 |
| |
6.9 |
Confidentiality |
34 |
| |
6.10 |
Publicity |
34 |
| |
6.11 |
Further Assurances |
35 |
| |
6.12 |
Legal Opinion |
35 |
| |
6.13 |
Limitation on Personal Liability of Officers and Directors of Acquired Companies |
35 |
| |
|
|
|
| |
|
|
|
| 7. |
CONDITIONS TO THE BUYER’S OBLIGATIONS AT THE CLOSING |
35 |
| |
|
|
|
| |
7.1 |
Representations and Warranties |
36 |
| |
7.2 |
Performance |
36 |
| |
7.3 |
Stock Certificates; Options and Warrants |
36 |
| |
7.4 |
Compliance Certificate |
36 |
| |
7.5 |
Qualifications |
36 |
| |
7.6 |
Absence of Litigation |
36 |
| |
7.7 |
Consents, etc. |
36 |
| |
7.8 |
FIRPTA Certificate |
37 |
| |
7.9 |
Proceedings and Documents |
37 |
| |
7.10 |
Ancillary Agreements |
37 |
| |
7.11 |
Resignations |
37 |
| |
7.12 |
No Material Adverse Effect |
37 |
| |
7.13 |
Repayment of Indebtedness; Seller Transaction Expenses |
37 |
| |
7.14 |
Consulting Agreement |
37 |
| |
7.15 |
Hong Kong Subsidiary |
37 |
| |
7.16 |
Tax Returns |
37 |
| |
7.17 |
UCC-3 Termination Statements |
37 |
| |
|
|
|
| 8. |
CONDITIONS TO THE SELLERS’ OBLIGATIONS AT THE CLOSING |
38 |
| |
|
|
|
| |
8.1 |
Representations and Warranties |
38 |
| |
8.2 |
Performance |
38 |
| |
8.3 |
Compliance Certificate |
38 |
| |
8.4 |
Qualifications |
38 |
| |
8.5 |
Absence of Litigation |
38 |
| |
8.6 |
Consents, etc. |
38 |
| |
8.7 |
Proceedings and Documents |
38 |
| |
8.8 |
Vringo Securities |
39 |
| |
8.9 |
Ancillary Agreements |
39 |
| |
|
|
|
| 9. |
TERMINATION |
39 |
| |
|
|
|
| |
9.2 |
Effect of Termination |
40 |
| |
|
|
|
| 10. |
INDEMNIFICATION |
40 |
| |
|
|
|
| |
10.1 |
Indemnification by the Sellers |
40 |
| |
10.2 |
Indemnity by the Buyer |
41 |
| |
10.3 |
Time for Claims |
41 |
| |
10.4 |
Third Party Claims |
42 |
| |
10.5 |
No Circular Recovery |
43 |
| |
10.6 |
Certain Limitations |
43 |
| |
10.7 |
Escrow Fund |
44 |
| |
10.8 |
Knowledge and Investigation |
44 |
| |
10.9 |
Remedies Cumulative |
44 |
| |
|
|
|
| 11. |
TAX MATTERS |
45 |
| |
|
|
|
| |
11.1 |
Cooperation on Tax Matters |
45 |
| |
11.2 |
Straddle Period |
45 |
| |
11.3 |
Transfer Taxes |
45 |
| |
|
|
|
| 12. |
MISCELLANEOUS |
46 |
| |
|
|
|
| |
12.1 |
Notices |
46 |
| |
12.2 |
Succession and Assignment; No Third-Party Beneficiary |
47 |
| |
12.3 |
Amendments and Waivers |
47 |
| |
12.4 |
Provisions Concerning Sellers’ Representative |
48 |
| |
12.5 |
Entire Agreement |
48 |
| |
12.6 |
Schedules; Listed Documents, etc. |
48 |
| |
12.7 |
Counterparts |
49 |
| |
12.8 |
Severability |
49 |
| |
12.9 |
Headings |
49 |
| |
12.10 |
Construction |
49 |
| |
12.11 |
Governing Law |
49 |
| |
12.12 |
Jurisdiction; Venue; Service of Process |
49 |
| |
12.13 |
Specific Performance |
50 |
| |
12.14 |
Waiver of Jury Trial |
50 |
| |
12.15 |
Representation by Counsel |
51 |
STOCK PURCHASE AGREEMENT
This Stock Purchase
Agreement dated as of October 15, 2015 (as amended or otherwise modified, the “Agreement”) is among Vringo,
Inc., a Delaware corporation (the “Buyer”) International Development Group Limited, a Maryland corporation (the “Company”),
each Person that has signed this Agreement as a “Seller” (collectively, the “Sellers”), and
Randall P. Marx as the representative of the Sellers (the “Sellers’ Representative”).
recitals
WHEREAS, the Sellers
are the record and beneficial owners of all of the outstanding shares of capital stock of the Company and all other equity interests
in the Company;
WHEREAS, the Buyer
desires to purchase from the Sellers, and the Sellers desire to sell to the Buyer, all of the shares of capital stock of the Company
owned by such Seller set forth opposite such Seller’s name on Exhibit A attached hereto (which number of shares of
capital stock is 100% of the shares of the Company’s stock owned by each stockholder of the Company as set forth in the Company’s
records, and therefore, in the aggregate, is equal to 100% of the issued and outstanding shares of capital stock of the Company
on a fully-diluted basis (collectively, such shares are referred to as the “Shares”) upon the terms and subject
to the conditions included in this Agreement; and
WHEREAS, it is intended
that the acquisition contemplated herein shall qualify for United States federal income tax purposes as a reorganization within
the meaning of Section 368 of the Internal Revenue Code of 1986, as amended.
agreement
NOW THEREFORE, in consideration
of the premises and mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained,
the Buyer, the Company and the Sellers hereby agree as follows:
1. DEFINITIONS;
CERTAIN RULES OF CONSTRUCTION.
As used herein, the
following terms will have the following meanings:
“1933 Act”
means the Securities Act of 1933.
“Action”
means any claim, action, cause of action, suit (whether in contract or tort or otherwise) or audit, litigation (whether at law
or in equity, whether civil or criminal), controversy, assessment, arbitration, investigation, opposition, interference, hearing,
charge, complaint, demand, notice or proceeding to, from, by or before any Governmental Authority.
“Acquired
Companies” means, collectively, the Company and each of its Subsidiaries.
“Affiliate”
means, with respect to any specified Person at any time means, (a) each Person directly or indirectly controlling, controlled by
or under direct or indirect common control with such specified Person at such time, (b) each Person who is at such time an officer
or director of, or direct or indirect beneficial holder of at least 20% of any class of the equity interests of, such specified
Person, (c) each Person that is managed by a common group of executive officers and/or directors as such specified Person, (d)
the members of the immediate family (i) of each officer, director or holder described in clause (b) and (ii) if such specified
Person is an individual, of such specified Person and (e) each Person of which such specified Person or an Affiliate (as defined
in clauses (a) through (d)) thereof will, directly or indirectly, beneficially own at least 20% of any class of equity interests
at such time.
“Agreement”
is defined in the Preamble.
“Ancillary
Agreements” means the Escrow Agreement.
“Annual Financials”
is defined in Section 3.6.1(a).
“Assets”
means, with respect to each Acquired Company, such Acquired Company’s properties, rights and assets, whether real or personal
and whether tangible or intangible, including all assets reflected in the Most Recent Balance Sheet or acquired after the Most
Recent Balance Sheet Date (except for such assets which have been sold or otherwise disposed of since the Most Recent Balance Sheet
Date in the Ordinary Course of Business).
“Business”
means the businesses conducted or actively being planned to be conducted by the Acquired Companies.
“Business
Day” means any weekday other than a weekday on which banks in New York, New York are authorized or required to be closed.
“Buyer”
is defined in the Preamble.
“Buyer Indemnified
Person” is defined in Section 10.1.
“Closing”
is defined in Section 2.2.
“Closing Certificate”
is defined in Section 2.4.
“Closing Date”
means the date on which the Closing actually occurs.
“Code”
means the U.S. Internal Revenue Code of 1986.
“Common Stock”
means the common stock, par value $.001 per share, of the Company.
“Company”
is defined in the Preamble.
“Company Counsel”
is Fleming PLLC, 49 Front Street, Suite 206, Rockville Centre, New York 11570.
“Company Intellectual
Property Rights” means all Intellectual Property Rights owned by the Acquired Companies or used by the Acquired Companies
in connection with the Business, including all Intellectual Property rights in and to Company Technology.
“Company Plan”
is defined in Section 3.16.2.
“Company Registrations”
is defined in Section 3.13.2.
“Company Technology”
means any and all Technology, including Technology obtained through the Court Order, used in connection with the operations and
sales for ruggedized computers and accessories, and the Wireless Charging, Wire-Free Charging and Near Field Communication Business.
“Company’s
Knowledge” (or any similar reference to the Knowledge of the Company or to the Knowledge of the Sellers) means the knowledge
of the directors and officers of the Acquired Companies.
“Compensation”
means, with respect to any Person, all salaries, commissions, compensation, remuneration, bonuses or benefits of any kind or character
whatever (including issuances or grants of equity interests), required to be made or that have been made directly or indirectly
by an Acquired Company to such Person or Affiliates of such Person.
“Contemplated
Transactions” means, collectively, the transactions contemplated by this Agreement, including (a) the sale and purchase
of the Shares and (b) the execution, delivery and performance of the Ancillary Agreements.
“Court Order”
means the Order issued on October 1, 2013 in Case Number 2013CV31722 in the District Court, Denver County, Colorado, a copy of
which is attached as Schedule 1.
“Current Liability
Policies” is defined in Section 3.24.
“Debt”
means, with respect to any Person, all obligations (including all obligations in respect of principal, accrued interest, penalties,
fees and premiums) of such Person (a) for borrowed money (including overdraft facilities), (b) evidenced by notes, bonds,
debentures or similar contractual obligations, (c) for the deferred purchase price of property, goods or services (other than trade
payables or accruals incurred in the Ordinary Course of Business, but including any deferred purchase price Liabilities, earnouts,
contingency payments, installment payments, seller notes, promissory notes, or similar Liabilities, in each case, related to past
acquisitions by the Acquired Companies and, for the avoidance of doubt, in each case, whether or not contingent), (d) under
capital leases (in accordance with GAAP), (e) in respect of letters of credit and bankers’ acceptances (in each case whether
or not drawn, contingent or otherwise), (f) in respect of deferred compensation for services, (g) in respect of severance, change
of control payments, stay bonuses, retention bonuses, success bonuses, and other bonuses and similar Liabilities payable in connection
with the transactions contemplated hereby, (h) for contractual obligations relating to interest rate protection, swap agreements
and collar agreements and (i) in the nature of guarantees of the obligations described in clauses (a) through (h) above of any
other Person.
“Employee
Plan” is defined in Section 3.16.1.
“Encumbrance”
means any charge, claim, community or other marital property interest, condition, equitable interest, lien, license, option, pledge,
security interest, mortgage, deed of trust, right of way, easement, encroachment, servitude, right of first offer or first refusal,
buy/sell agreement and any other restriction or covenant with respect to, or condition governing the use, construction, voting
(in the case of any security or equity interest), transfer, receipt of income or exercise of any other attribute of ownership.
“Environmental
Laws” means any Legal Requirement relating to (a) releases or threatened releases of Hazardous Substances, (b) pollution
or protection of public health or the indoor or outdoor environment or worker safety or health or (c) the generation, manufacture,
handling, transport, use, treatment, storage, or disposal of Hazardous Substances, including, without limitation, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. §§ 6901 et seq., the Clean Water Act, 33 U.S.C. §§ 1251 et seq.,
the Clean Air Act, 42 U.S.C. §§ 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et
seq. and all regulations promulgated thereto.
“ERISA”
means the federal Employee Retirement Income Security Act of 1974.
“Escrow Agent”
has the meaning set forth in Section 2.4.1.
“Escrow Agreement”
has the meaning set forth in Section 2.4.1.
“Escrow Amount”
has the meaning set forth in Section 2.4.2.
“Escrow Fund”
has the meaning set forth in Section 2.4.2.
“Facilities”
means any buildings, plants, improvements or structures located on the Real Property.
“Financials”
is defined in Section 3.6.1(c).
“GAAP”
means generally accepted accounting principles in the United States as in effect from time to time.
“Government
Order” means any order, writ, judgment, injunction, decree, stipulation, ruling, directive, determination or award entered
by or with any Governmental Authority.
“Governmental
Authority” means any United States federal, state or local or any foreign government, or political subdivision thereof,
or any multinational organization or authority, or any authority, agency or commission, entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau
or division thereof), or any arbitrator or arbitral body.
“Hazardous
Substance” is defined in Section 3.17.
“HSR Act”
means the Hart Scott Rodino Antitrust Improvements Act of 1976.
“Inbound IP
Contracts” is defined in Section 3.13.3.
“Indemnity
Claim” means a claim for indemnity under Section 10.1 or 10.2, as the case may be.
“Indemnified
Party” means, with respect to any Indemnity Claim, the party asserting such claim under Section 10.1 or 10.2, as the
case may be.
“Indemnifying
Party” means, with respect to any Indemnity Claims, the Buyer Indemnified Person or the Seller Indemnified Person under
Section 10.1 or 10.2, as the case may be, against whom such claim is asserted.
“Intellectual
Property Rights” means the entire right, title, and interest in and to all proprietary rights of every kind and nature
however denominated, throughout the world, including without limitation (a) patents, copyrights, mask work rights, confidential
information, trade secrets, database rights, and all other proprietary rights in Technology; (b) trademarks, trade names, service
marks, service names, brands, trade dress and logos, and the goodwill and activities associated therewith; (c) domain names, rights
of privacy and publicity, and moral rights; (d) any and all registrations, applications, recordings, licenses, common-law rights,
and contractual rights relating to any of the foregoing; and (e) all Actions and rights to sue at law or in equity for any past
or future infringement or other impairment of any of the foregoing, including the right to receive all proceeds and damages therefrom,
and all rights to obtain renewals, continuations, divisions, or other extensions of legal protections pertaining thereto.
“Interim Financials”
is defined in Section 3.6.1(b).
“IP Contracts”
is defined in Section 3.13.3.
“Leased Real
Property” is defined in Section 3.12.1.
“Legal Requirement”
means any United States federal, state or local or foreign law, statute, standard, ordinance, code, rule, regulation, guidance,
resolution or promulgation, or any Governmental Order, or any license, franchise, permit or similar right granted under any of
the foregoing, or any similar provision having the force or effect of law.
“Liability”
means, with respect to any Person, any liability or obligation of such Person whether known or unknown, whether asserted or unasserted,
whether determined, determinable or otherwise, whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, whether incurred or consequential, whether due or to become due and whether or not required under GAAP to be accrued
on the financial statements of such Person.
“Liability
Policies” is defined in Section 3.24.
“Losses”
is defined in Section 10.1.
“Material
Adverse Effect” means any event, occurrence, change in facts, condition or other change or effect on, the Business, operations,
Assets or condition (financial or otherwise) of the Acquired Companies which, is reasonably likely to be, materially adverse to
the Business, operations, Assets or condition (financial or otherwise) of the Acquired Companies, taken as a whole, or to the ability
to operate the Business immediately after the Closing in the manner operated before Closing. For purposes hereof, an event, occurrence,
change in facts, condition or other change or effect which has resulted or is reasonably likely to result in Losses of at least
$200,000 shall be deemed to constitute a Material Adverse Effect.
“Monthly Financials”
is defined in Section 3.6.1(c).
“Most Recent
Balance Sheet” is defined in Section 3.6.1(a).
“Most Recent
Balance Sheet Date” is defined in Section 3.6.1(a).
“Ordinary
Course of Business” means an action taken by any Person in the ordinary course of such Person’s business which
is consistent with the past customs and practices of such Person (including past practice with respect to quantity, amount, magnitude
and frequency, standard employment and payroll policies and past practice with respect to management of working capital) which
is taken in the ordinary course of the normal day-to-day operations of such Person.
“Outbound
IP Contracts” is defined in Section 3.13.4.
“Owned Real
Property” is defined in Section 3.12.1.
“Permits”
means, with respect to any Person, any license, franchise, permit, consent, approval, right, privilege, certificate or other similar
authorization issued by, or otherwise granted by, any Governmental Authority or any other Person to which or by which such Person
is subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound.
“Permitted
Encumbrance” means (a) statutory liens for current Taxes, special assessments or other governmental charges not yet due
and payable or the amount or validity of which is being contested in good faith by appropriate proceedings and for which appropriate
reserves have been established in accordance with GAAP, (b) mechanics’, materialmen’s, carriers’, workers’,
repairers’ and similar statutory liens arising or incurred in the Ordinary Course of Business which liens have not had and
are not reasonably likely to have a Material Adverse Effect, (c) zoning, entitlement, building and other land use regulations
imposed by Governmental Authorities having jurisdiction over any Owned Real Property which are not violated in any material respect
by the current use and operation of the Owned Real Property, (d) deposits or pledges made in connection with, or to secure payment
of, worker’s compensation, unemployment insurance, old age pension programs mandated under applicable Legal Requirements
or other social security, (e) covenants, conditions, restrictions, easements, Encumbrances and other similar matters of record
affecting title to but not adversely affecting the value of, or the current occupancy or use of, the Owned Real Property in any
material respect, and (f) restrictions on the transfer of securities arising under federal and state securities laws.
“Person”
means any individual or corporation, association, partnership, limited liability company, joint venture, joint stock or other company,
business trust, trust, organization, Governmental Authority or other entity of any kind.
“Predecessor”
is defined in Section 3.1.
“Representative”
means, with respect to any Person, any director, officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
“Scheduled
Intellectual Property Rights” is defined in Section 3.13.3.
“Seller”
and “Sellers” are defined in the Preamble.
“Sellers’
Representative” is defined in the Preamble.
“Seller Transaction
Expenses” means the fees and expenses (including legal, accounting, investment banking, advisory and other fees and expenses)
of the Acquired Companies and the Sellers incurred in connection with the negotiation and the consummation of the Contemplated
Transactions.
“Seller Indemnified
Person” is defined in Section 10.2.
“Shares”
is defined in the recitals to this Agreement.
“Straddle
Period” means any taxable period that includes, but does not end on, the Closing Date.
“Subsidiary”
means, with respect to any specified person, any other Person of which such specified Person will, at the time, directly or indirectly
through one or more Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other shares of beneficial interest)
entitled to vote generally, (b) hold at least 50% of the partnership, limited liability company, joint venture or similar
interests or (c) be a general partner, managing member or joint venturer.
“Tax”
or “Taxes” means (a) any and all federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar, including FICA), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind or any charge
of any kind in the nature of (or similar to) taxes whatsoever, including any interest, penalty, or addition thereto, whether disputed
or not and (b) any liability for the payment of any amounts of the type described in clause (a) of this definition as a result
of being a member of an affiliated, consolidated, combined or unitary group for any period, as a result of any tax sharing or tax
allocation agreement, arrangement or understanding, or as a result of being liable for another person’s taxes as a transferee
or successor, by contract or otherwise.
“Tax Return”
means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.
“Technology”
means all inventions, works, discoveries, innovations, know-how, information (including, without limitation, ideas, research and
development, formulas, algorithms, compositions, processes and techniques, data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, business and marketing plans and proposals, graphics, illustrations, artwork, documentation,
and manuals), databases, computer software, firmware, computer hardware, integrated circuits and integrated circuit masks, electronic,
electrical, and mechanical equipment, and all other forms of technology, including improvements, modifications, works in process,
derivatives, or changes, whether tangible or intangible, embodied in any form, whether or not protectable or protected by patent,
copyright, mask work right, trade secret law, or otherwise, and all documents and other materials recording any of the foregoing.
“Termination
Date” is defined in Section 9.
“Third Party
Claim” is defined in Section 10.4.1.
“Treasury
Regulations” means the regulations promulgated under the Code.
Except as otherwise explicitly specified
to the contrary, (a) references to a Section, Article, Exhibit or Schedule means a Section or Article of, or Schedule or Exhibit
to this Agreement, unless another agreement is specified, (b) the word “including” will be construed as “including
without limitation,” (c) references to a particular statute or regulation include all rules and regulations thereunder and
any predecessor or successor statute, rules or regulation, in each case as amended or otherwise modified from time to time, (d)
words in the singular or plural form include the plural and singular form, respectively and (e) references to a particular Person
include such Person’s successors and assigns to the extent not prohibited by this Agreement.
2. PURCHASE
AND SALE OF SHARES.
2.1 Purchase
and Sale of Shares. At the Closing, subject to the terms and conditions of this Agreement, the Sellers will sell,
transfer and deliver to the Buyer, and the Buyer will purchase from the Sellers, the Shares, free and clear of all Encumbrances. In
exchange for the Shares, at Closing, the Buyer will issue 1,609,167 shares (less the Escrow Amount (240,625 shares) and 5,000 shares
of preferred stock to be delivered to Company Counsel) of its preferred stock, par value $0.01 per share to the Sellers in the
individual amounts set forth on Exhibit A (the “Vringo Securities”). The Vringo Securities
(including the Escrow Amount and the shares to be issued to Company Counsel shall be convertible into 16,091,667 shares of common
stock of Buyer and shall have the rights, preferences and privileges as set forth in the Certificate of Designations attached hereto
as Exhibit B. In addition, as consideration for Sellers’ Representative’s agreement to forego any
payment from the Company or any Acquired Company of any and all Debt or other obligations or Liabilities that may be due to Sellers’
Representative or to the Randall P. and Marilyn S. Marx Living Trust (or any related person or party), Buyer shall deliver 575,000
shares of its common stock to Sellers’ Representative.
2.2 The
Closing. Subject to the terms and conditions of this Agreement, the closing of the purchase and sale
of the Shares (the “Closing”) will take place at the offices of Mintz Levin Cohn Ferris Glovsky and Popeo at
666 Third Avenue, New York, New York, on the date that is two Business Days following the satisfaction of the conditions set forth
in Sections 7 and 8 which can be satisfied prior to closing, or at such other time or on such other date or at such other place
as the parties hereto may mutually agree upon in writing (it being understood that the Closing may be effected by the delivery
of documents via e-mail and/or overnight courier).
2.3 Withholding
Rights. Buyer shall deduct and withhold from any amounts (including Vringo Securities) otherwise payable to a Seller
and shall pay to the appropriate Governmental Authority such amounts that are required to be deducted and withheld with respect
to the making of such payment under any Tax Law. To the extent amounts are so withheld and paid to a Governmental Authority,
the withheld amounts shall be treated for purposes of this Agreement as having been paid to the Person in respect of which such
deduction and withholding was made.
2.4 Escrow. At
the Closing, Buyer and the Sellers shall designate American Stock Transfer & Trust Company to act as escrow agent following
the Closing (the “Escrow Agent”) pursuant to an escrow agreement to be executed by and among Sellers’
Representative, Buyer and the Escrow Agent in substantially the form of Exhibit C hereto (the “Escrow Agreement”)
and Sellers’ Representative is hereby authorized by Sellers to provide direction, instruction and notices and take all other
actions with respect to the Escrow Agreement and Escrow Fund.
2.4.1 Pursuant
to Section 2.1 and concurrently with the Closing, Buyer shall deposit with the Escrow Agent for a period of one year 240,625 of
the Vringo Securities (the “Escrow Amount” and, together with any distributions or earnings thereon,
the “Escrow Fund”), which escrow shall be held and disbursed by the Escrow Agent in accordance with the
terms of this Agreement and the Escrow Agreement and shall serve as security to Buyer for the Sellers indemnity obligations set
forth in this Agreement. Notwithstanding anything to the contrary set forth herein, it is the intent of the parties
that, except as otherwise set forth in Section 10.6(c) and Section 10.7, the Escrow Fund shall serve as the sole recourse of Buyer
for any breaches of any of the representations and warranties set forth in Section 3 and Section 4 of this Agreement and any recourse
to the Escrow Fund shall be (a) pro rata as to all Sellers for all Losses arising out of any breach of the representations and
warranties set forth in Section 3 and (b) several as to each Seller for all Losses arising out of any breach by a Seller of the
representations and warranties set forth in Section 4. In addition, as set forth in Section 10.7, with respect to claims for any
Losses related to (i) the Excepted Representations, (ii) any of the items set forth on Schedule 10.6(c) or (iii) for fraud
or willful misrepresentation, Buyer shall seek payment for any Losses first from the Escrow Fund and then from the Sellers’
Representative, who shall be personally liable for any such Losses above the Escrow Fund. Subject to any unresolved claims, on
the six month anniversary of the Closing Date, the Escrow Agent shall release to the Sellers 80,128 of the Vringo Securities and
on the one year anniversary of the Closing Date, the Escrow Agent shall release to the Sellers the balance of the Vringo Securities
remaining in escrow.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
In order to induce
the Buyer to enter into and perform this Agreement and to consummate the Contemplated Transactions, the Company represents and
warrants to the Buyer, as of the date hereof and as of the Closing Date, as follows; provided, that, any representation or warranty
concerning fliCharge International Ltd. or any predecessor of fliCharge International Ltd., or Pure Energy Solutions, or the assets
or technology of Pure Energy Solutions, including any such assets or technology of Pure Energy Solutions that were transferred
to the Company, will not cover any period prior to October 1, 2013:
3.1 Organization;
Predecessors. Schedule 3.1 sets forth for each Acquired Company its name, jurisdiction of organization and
a true and correct list of its directors and officers. Each Acquired Company is (a) duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and (b) is duly qualified to do business and in
good standing in each jurisdiction, except where the failure to so qualify has not had, and is not reasonably likely to have, a
Material Adverse Effect. Notwithstanding the Court Order, it was agreed by the owners of fliCharge International Ltd.
that such entity shall be incorporated in the State of Maryland. The Company has delivered to the Buyer true, accurate
and complete copies of (x) the organizational documents of each Acquired Company and (y) the minute books of each Acquired
Company which contain records of all meetings of, and other corporate actions taken by, its stockholders, Boards of Directors and
any committees appointed by its Boards of Directors. Schedule 3.1 also sets forth a list of (a) any Person that
has ever merged with or into an Acquired Company, (b) any Person a majority of whose capital stock (or similar outstanding
ownership interests) or equity interests has ever been acquired by an Acquired Company, (c) any Person all or substantially all
of whose assets has ever been acquired by an Acquired Company and (d) any prior names of an Acquired Company or any Person
described in clauses (a) through (c) (each such Person, a “Predecessor”).
3.2 Power
and Authorization. The execution, delivery and performance by each Acquired Company of this Agreement and each Ancillary
Agreement to which it is (or will be) a party and the consummation of the Contemplated Transactions are within the power and authority
of each Acquired Company and have been duly authorized by all necessary action on the part of each Acquired Company. Randall
P. Marx is the sole officer and director of the Company and each Acquired Company. This Agreement and each Ancillary Agreement
to which each Acquired Company is (or will be) a party (a) has been (or, in the case of Ancillary Agreements to be entered
into at or prior to the Closing, will be) duly executed and delivered by each Acquired Company and (b) is (or, in the case
of Ancillary Agreements to be entered into at or prior to the Closing, will be) a legal, valid and binding obligation of each Acquired
Company, enforceable against each such Acquired Company in accordance with its terms, except as enforceability may be limited by
equitable principles or by bankruptcy, fraudulent conveyance or insolvency laws affecting creditors’ rights generally. Each
Acquired Company has the full power and authority necessary to own and use its Assets and carry on the portions of the Business
in which it is engaged.
3.3 Authorization
of Governmental Authorities. Except as disclosed on Schedule 3.3, no action by (including any authorization,
consent or approval), or in respect of, or filing with, or notice to, any Governmental Authority is required for, or in connection
with, the valid and lawful (a) authorization, execution, delivery and performance by any Acquired Company of this Agreement and
each Ancillary Agreement to which it is (or will be) a party or (b) the consummation of the Contemplated Transactions by each Acquired
Company.
3.4 Noncontravention. Except
as disclosed on Schedule 3.4, to the Company’s Knowledge, neither the execution, delivery and performance by an Acquired
Company of this Agreement or any Ancillary Agreement to which it is (or will be) a party nor the consummation of the Contemplated
Transactions will: (a) assuming the taking of any action by (including any authorization, consent or approval), or in respect of,
or any filing with, any Governmental Authority, in each case, as disclosed on Schedule 3.3, violate any Legal Requirement
applicable to an Acquired Company; (b) result in a breach or violation of, or default under, any contractual obligation of any
Acquired Company; (c) require any action by (including any authorization, consent or approval) or in respect of (including notice
to), any Person under any contractual obligation of any Acquired Company; (d) result in the creation or imposition of an Encumbrance
upon, or the forfeiture of, any Asset; or (e) result in a breach or violation of, or default under, the organizational documents
of any Acquired Company.
3.5 Capitalization
of the Acquired Companies. As of the date of this Agreement, the entire authorized capital stock of each Acquired
Company is as set forth on Schedule 3.5. As of the date hereof and as of the Closing Date, the entire issued
and outstanding shares of capital stock of the Company consists of 4,423,991 shares of Common Stock. All of the outstanding
shares of capital stock of each Acquired Company have been duly authorized, validly issued, and are fully paid and non-assessable. None
of the Acquired Companies has violated any preemptive or other similar rights of any Person in connection with the issuance or
redemption of any of its equity interests. The Acquired Companies hold no shares of their respective capital stock in
their respective treasuries. The Shares represent all of the issued and outstanding shares of capital stock of the Company.
The Acquired Companies have delivered to the Buyer true, accurate and complete copies of the stock ledger of each Acquired Company
which reflects all issuances, transfers, repurchases and cancellations of shares of its capital stock. All of the outstanding
equity interests in each of the Company’s Subsidiaries are set forth on Schedule 3.5 and are validly issued,
fully paid and non-assessable. Except for a 30% record and beneficial interest in fliCharge International Ltd., the
Company is the beneficial owner (and the Company or the Company’s Subsidiary listed on Schedule 3.5 is the record
owner) of all of the equity interests in the Company’s Subsidiaries and holds such equity interests free and clear of all
Encumbrances except as are imposed by applicable securities laws. Except for the Subsidiaries set forth on Schedule
3.5, the Company does not own, directly or indirectly, any membership interests, partnership interests or voting
securities of, or other equity interests in, or any interest convertible into or exchangeable or exercisable for, any membership
interests, partnership interests or voting securities of, or other equity interests in, any firm, corporation, partnership, company,
limited liability company, trust, joint venture, association or other entity. Except as disclosed on Schedule 3.5: (a)
there are no preemptive rights or other similar rights in respect of any equity interests in any Acquired Company, (b) to the Company’s
Knowledge, except as imposed by applicable securities laws, there are no Encumbrances on, or other contractual obligations relating
to, the ownership, transfer or voting of any equity interests in any Acquired Company, or otherwise affecting the rights of any
holder of the equity interests in any Acquired Company, (c) except for the Contemplated Transactions, there is no contractual obligation,
or provision in the organizational documents of any Acquired Company which obligates it to purchase, redeem or otherwise acquire,
or make any payment (including any dividend or distribution) in respect of, any equity interests in any Acquired Company and (d)
there are no existing rights with respect to registration under the 1933 Act of any equity interests in any Acquired Company. As
of the date of this Agreement, there are no outstanding or authorized options, warrants, convertible securities or other rights,
agreements, arrangements or commitments of any character that have been issued or agreed, or are otherwise known, by the Company
relating to any equity ownership interests in any Acquired Company. As of the date of this Agreement, there are no outstanding
or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character
obligating the Sellers to issue or sell any interest in any Acquired Company. As of the Closing Date, there will not
be any outstanding or authorized options, warrants, convertible securities, or other rights, agreements, arrangements or commitments
of any character relating to any equity ownership interests of any Acquired Company or obligating the Sellers or the Company to
issue or sell any interest in any Acquired Company. No Acquired Company has any outstanding, or authorized any, equity
appreciation, phantom equity, profit participation or similar rights. To the Company’s Knowledge there are no voting trusts,
stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of
the Shares.
3.6 Financial
Statements.
3.6.1 Financial
Statements. Attached as Schedule 3.6 are copies of each of the following:
(a) the
unaudited consolidated balance sheet of the Acquired Companies as at December 31, 2014 (respectively, the “Most Recent
Balance Sheet,” and the “Most Recent Balance Sheet Date”), December 31, 2013 and December 31, 2012
and the unaudited related consolidated statements of income of the Acquired Companies for the fiscal years then ended (collectively,
the “Annual Financials”);
(b) the
unaudited consolidated balance sheet of the Acquired Companies as at August 31, 2015 and the related unaudited consolidated statement
of income of the Acquired Companies for the eight months then ended (the “Interim Financials”); and
(c) monthly
unaudited financial statements of the Acquired Companies in the form customarily prepared by management for internal use for each
completed month from the date of the Interim Financials through the date of this Agreement (the “Monthly Financials,”
and together with the Annual Financials and Interim Financials, collectively the “Financials”).
3.6.2 Compliance
with GAAP, etc. Except as disclosed on Schedule 3.6, the Financials (including any notes thereto) (a) are
complete and correct and were prepared in accordance with the books and records of the Acquired Companies, (b) fairly present
the consolidated financial position of the Acquired Companies as at the respective dates thereof and the consolidated results of
the operations of the Acquired Companies.
3.7 Absence
of Undisclosed Liabilities. No Acquired Company has any Liabilities except for (a) Liabilities covered by the
Interim Financials and (b) Liabilities incurred in the Ordinary Course of Business, including in connection with the Contemplated
Transactions, since the date of the Interim Financials (none of which results from, arises out of, or relates to any breach or
violation of, or default under, a contractual obligation or Legal Requirement).
3.8 Absence
of Certain Developments. Since the date of the Interim Financials, the Business has been conducted in the Ordinary
Course of Business, including matters related to the Contemplated Transactions, and, except for the matters disclosed on Schedule
3.8 (which matters have not had, and are not reasonably likely to have, a Material Adverse Effect):
(a) no
Acquired Company has (i) amended its organizational documents, (ii) amended any term of its outstanding equity interests or
other securities or (iii) issued, sold, granted, or otherwise disposed of, its equity interests or other securities;
(b) no
Acquired Company has become liable in respect of any guarantee or has incurred, assumed or otherwise become liable in respect of
any Debt, except for borrowings in the Ordinary Course of Business under credit facilities in existence on the Most Recent Balance
Sheet Date;
(c) no
Acquired Company has permitted any of its Assets to become subject to an Encumbrance other than a Permitted Encumbrance;
(d) no
Acquired Company has (i) made any declaration, setting aside or payment of any dividend or other distribution with respect to,
or any repurchase, redemption or other acquisition of, any of its capital stock or other equity interests or (ii) entered into,
or performed, any transaction with, or for the benefit of, any Seller or any Affiliate of any Seller (other than payments made
to officers, directors and employees in the Ordinary Course of Business);
(e) there
has been no material loss, destruction, damage or eminent domain taking (in each case, whether or not insured) affecting the Business
or any material Asset;
(f) no
Acquired Company has increased the Compensation payable or paid, whether conditionally or otherwise, to (i) any employee, consultant
or agent other than in the Ordinary Course of Business, (ii) any director or officer or (iii) any Seller or any Affiliate of any
Seller;
(g) no
Acquired Company has entered into any contractual obligation providing for the employment or consultancy of any Person on a full-time,
part-time, consulting or other basis or otherwise providing Compensation or other benefits to any officer, director, employee or
consultant;
(h) no
Acquired Company has made any change in its methods of accounting or accounting practices (including with respect to reserves);
(i) no
Acquired Company has made, changed or revoked any material Tax election, elected or changed any method of accounting for Tax purposes,
settled any Action in respect of Taxes or entered into any contractual obligation in respect of Taxes with any Governmental Authority;
(j) no
Acquired Company has terminated or closed any Facility, business or operation;
(k) no
Acquired Company has adopted or amended any Employee Plan or, except in accordance with terms thereof as in effect on the Most
Recent Balance Sheet Date, increased any benefits under any Employee Plan;
(l) no
Acquired Company has written up or written down any of its material Assets or revalued its inventory;
(m) no
Acquired Company has entered into any contractual obligation to do any of the things referred to elsewhere in this Section 3.8;
(n) no
event or circumstance has occurred which has had, or is reasonably likely to have, a Material Adverse Effect;
(o) no
Acquired Company has (i) collected accounts receivable at a discount, (ii) collected accounts receivable earlier than in the ordinary
course of business consistent with past practice or prior to their original due date or (iii) accepted cash for more than the first
year of a multi-year support or services contract;
(p) no
Acquired Company has paid or extended accounts payable later than in the ordinary course of business consistent with past practice
or later than the due date; and
(q) no
Acquired Company has failed to pay any creditor any amount owed to such creditor when due.
3.9 Debt;
Guarantees. The Acquired Companies have no Liabilities in respect of Debt except as set forth on Schedule 3.9. For
each item of Debt, Schedule 3.9 correctly sets forth the debtor, the principal amount of the Debt as the date of this Agreement,
the creditor, the maturity date, and the collateral, if any, securing the Debt. No Acquired Company has any Liability
in respect of a guarantee of any Liability of any other Person (other than another Acquired Company, which guarantee is identified
on Schedule 3.9).
3.10 Ownership
of Assets; Sufficiency. Each Acquired Company has sole and exclusive, good and marketable title to, or, in the case
of property held under a lease or other contractual obligation, a sole and exclusive, enforceable leasehold interest in, or right
to use, all of its Assets (other than Real Property, which is addressed in Section 3.12). Except as disclosed on Schedule
3.10, none of the Assets (other than Real Property, which is addressed in Section 3.12) is subject to any Encumbrance other
than Permitted Encumbrances. The Assets comprise all of the assets, properties and rights of every type and description,
whether real or personal, tangible or intangible, used or necessary to the conduct of the Business and are adequate for the continued
conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing. No Acquired
Company controls, directly or indirectly, or owns any direct or indirect equity interest any Person which is not a Subsidiary of
the Company.
3.11 Accounts
Receivable; Accounts Payable.
(a) Schedule 3.11
sets forth a current listing of all accounts and notes receivable of the Company as of September 30, 2015. All accounts
and notes receivable reflected on Schedule 3.11 and all accounts and notes receivable arising subsequent to the date thereof and
on or prior to the Closing Date, have arisen or will arise in the ordinary course of business, consistent with past practice, and
(i) there are no material disputes, contests, claims, counterclaims, or setoffs with respect to such accounts receivable that have
not been reserved for in the Financial Statements and (ii) all such accounts and notes receivable have been, or will be, collected
or are, or will be, collectible in the aggregate recorded amounts thereof, without resort to litigation or extraordinary collection
activity thereof, in accordance with their terms and no later than ninety (90) days of invoice thereof.
(b) The
accounts payable and accrued expenses reflected on the Most Recent Balance Sheet and the accounts payable and accrued expenses
arising after the dates thereof have arisen from bona fide transactions entered into in the ordinary course of business consistent
with past practice, including in connection with the Contemplated Transactions.
3.12 Real
Property.
3.12.1 Schedule
3.12 sets forth a list of the addresses of all real property (a) owned or previously owned by any of the Acquired Companies
(the “Owned Real Property”) and (b) leased, subleased, or licensed by, or for which a right to use or occupy
has been granted to, any of the Acquired Companies (the “Leased Real Property”, and together with the Owned
Real Property, the “Real Property”). Schedule 3.12 also identifies, (i) with respect to each Owned Real
Property, the Acquired Company that is the owner or former owner of such Owned Real Property, and (ii) with respect to each Owned
Real Property that is currently owned by any of the Acquired Companies, the tax identification number(s) for such Owned Real Property
and all Persons that use or occupy such Owned Real Property in addition to the owner, if any. Schedule 3.12 also
identifies, with respect to each Leased Real Property, each lease, sublease, license or other contractual obligation under which
such Leased Real Property is occupied or used, including the date of and legal name of each of the parties to such lease, sublease,
license or other contractual obligation (the “Real Property Leases”).
3.12.2 Except
as set forth in Schedule 3.12, the Company or one of its Subsidiaries has good and clear, record and marketable fee simple
title in and to each of the Owned Real Properties, free and clear of all Encumbrances other than Permitted Encumbrances. Except
as set forth in Schedule 3.12, there are no written or oral subleases, licenses, concessions, occupancy agreements or other
contractual obligations granting to any other Person the right of use or occupancy of the Real Property and there is no Person
(other than any Acquired Company) in possession of the Leased Real Property.
3.12.3 The
Company or one of its Subsidiaries has a valid leasehold interest in and to each of the Leased Real Properties, free and clear
of all Encumbrances other than Permitted Encumbrances. The Acquired Companies have delivered to the Buyer accurate and
complete copies of the Real Property Leases, in each case as amended or otherwise modified and in effect, together with extension
notices and other material correspondence, lease summaries, notices or memoranda of lease, estoppel certificates and subordination,
non-disturbance and attornment agreements related thereto. With respect to each Real Property Lease that is a sublease,
to the Company’s Knowledge, the representations and warranties in this Section 3.12.3 are correct with respect to the underlying
lease.
3.12.4 The
current use of the Real Property is, in all material respects, in accordance with the certificates of occupancy relating thereto
and the terms of any Permits relating thereto. The Real Property and its current use, occupancy and operation by the
Acquired Companies and the Facilities located thereon do not (a) constitute a nonconforming use or structure under any applicable
building, zoning, subdivision or other land use or similar Legal Requirements, or (b) otherwise violate or conflict with any covenants,
conditions, restrictions or other contractual obligations, including the requirements of any applicable Encumbrances thereto. No
condemnation Action is pending or, to the Company’s Knowledge, threatened, that would preclude or materially impair the use
of any Real Property.
3.12.5 Each
Facility is supplied with utilities and other services necessary for the operation of such Facility as the same is currently operated
or currently proposed to be operated, all of which utilities and other services are provided via public roads or via permanent,
irrevocable appurtenant easements benefiting the Real Property. Each parcel of Real Property abuts on, and has direct
vehicular access to, a public road, or has access to a public road via a permanent, irrevocable appurtenant easement benefiting
the parcel of Real Property, in each case, to the extent necessary for the conduct of the Business.
3.13 Intellectual
Property.
3.13.1 Company
IP. Except as disclosed on Schedule 3.13.1, the Acquired Companies have the rights set forth in the Court
Order with respect to the ownership and use of all Company Technology and all Intellectual Property Rights therein. Except
for the Technology and Intellectual Property Rights licensed to the Acquired Companies under the Inbound IP Contracts identified
on Schedule 3.13.4 and to the extent provided in such Inbound IP Contracts, and except as set forth on Schedule 3.13.4
none of the Company Technology or Company Intellectual Property Rights is in the possession, custody, or control of any third Person
other than the Acquired Companies.
3.13.2 Infringement. Except
as disclosed on Schedule 3.13.2, none of the Acquired Companies (a) has to the Company’s Knowledge, interfered with,
infringed upon, diluted, misappropriated, or violated any Intellectual Property Rights of any Person, (b) except as set forth on
Schedule 3.13.2, has received any charge, complaint, claim, demand, or notice alleging interference, infringement, dilution,
misappropriation, or violation of the Intellectual Property Rights of any Person (including any invitation to license or request
or demand to refrain from using any Intellectual Property Rights of any Person in connection with the conduct of the Business or
the use of the Company Technology), or (c) has agreed to or has a contractual obligation to indemnify any Person for or against
any interference, infringement, dilution, misappropriation, or violation with respect to any Intellectual Property Rights. Except
as disclosed on Schedule 3.13.2, to the Company’s Knowledge, no Person has interfered with, infringed upon, diluted,
misappropriated, or violated any Company Intellectual Property Rights.
3.13.3 Scheduled
IP. Schedule 3.13.3 identifies all patents, patent applications, registered trademarks and copyrights, applications
for trademark and copyright registrations, domain names, registered design rights, and other forms of registered Intellectual Property
Rights and applications therefor, validly owned by or exclusively licensed to an Acquired Company (collectively, the “Company
Registrations”). Schedule 3.13.3 also identifies each trade name, each unregistered trademark, service
mark, or trade dress, and each unregistered copyright owned or exclusively licensed by an Acquired Company that, in each case,
is material to the Business. For purposes of this Agreement, all items listed on Schedule 3.13.3 shall be called
“Scheduled Intellectual Property Rights”.
3.13.4 IP
Contracts. Schedule 3.13.4 identifies under separate headings each agreement, whether written or oral, (a)
under which an Acquired Company uses or licenses an item of Company Technology or Company Intellectual Property Rights that any
Person besides an Acquired Company owns, including ownership pursuant to the Court Order (the “Inbound IP Contracts”),
and (b) under which an Acquired Company has granted any Person any right or interest in Company Intellectual Property Rights including
any right to use any item of Company Technology (the “Outbound IP Contracts” and together with the Inbound IP
Contracts, the “IP Contracts”). Except as provided in the Inbound IP Contracts, none of the Acquired
Companies owes any royalties to any Person for the use of any Intellectual Property Rights or Technology.
3.13.5 Confidentiality
and Invention Assignments. The Acquired Companies have maintained commercially reasonable practices to protect the
confidentiality of the Acquired Companies’ confidential information and trade secrets and, except as disclosed on Schedule
3.13.5, have required any employee or third party with access to an Acquired Company’s confidential information to execute
enforceable contracts requiring them to maintain the confidentiality of such information and use such information only for the
benefit of the Acquired Companies. All current and former employees of an Acquired Company who contributed to the Company
Technology that is incorporated in any product or service of an Acquired Company, except for three employees residing in China,
have executed contracts that assign to the Acquired Company all of such Person’s respective rights, including Intellectual
Property Rights relating to such product or service.
3.13.6 Open
Source Software. Schedule 3.13.6 lists all open source computer code contained in or used in the development
of Company Technology or any product or service of an Acquired Company. Except as disclosed on Schedule 3.13.6,
to the best of the Company’s Knowledge, none of the Company Technology or any product or service of an Acquired Company constitutes,
contains, or is dependent on any open source computer code, and none of the Company Technology or any product or service of an
Acquired Company is subject to any IP Contract or other contractual obligation that would require the Company to divulge to any
Person any source code or trade secret that is part of the Company Technology.
3.13.7 Privacy
and Data Security. The Acquired Companies’ use and dissemination of any personally-identifiable information
concerning individuals is in compliance with all applicable privacy policies, terms of use, Legal Requirements, and contractual
obligations applicable to any Acquired Company or to which any Acquired Company is bound. The Acquired Companies maintain
policies and procedures regarding data security and privacy and maintain administrative, technical, and physical safeguards that
are commercially reasonable and, in any event, in compliance with all applicable Legal Requirements and contractual obligations
applicable to any Acquired Company or to which any Acquired Company is bound. To the Company’s Knowledge, except
as set forth on Schedule 3.13.7, there have been no security breaches relating to, or violations of any security policy
regarding, or any unauthorized access of, any data or information used by the Acquired Companies.
3.14 Legal
Compliance; Illegal Payments; Permits. Each Acquired Company has complied and is in compliance in all material respects
with all Legal Requirements applicable to it or any of its respective assets or properties. No Acquired Company is in
breach or violation of, it or default under, and has not at any time during the previous five (5) years been in breach or violation
of, or default under: (a) its organizational documents nor, to the Company’s Knowledge, is there a basis which could constitute
such a breach, violation or default; (b) any Legal Requirement nor, to the Company’s Knowledge, is there a basis which could
constitute such a breach, violation or default, except for breaches, violation or defaults (i) disclosed on Schedule 3.14
and (ii) which have not had, and are not reasonably likely to have, a Material Adverse Effect. In the conduct of the Business,
to the Company’s Knowledge, no Acquired Company nor any of its directors, officers, employees or agents, has (a) directly
or indirectly, given, or agreed to give, any illegal gift, contribution, payment or similar benefit to any supplier, customer,
governmental official or employee or other Person who was, is or may be in a position to help or hinder an Acquired Company (or
assist in connection with any actual or proposed transaction) or made, or agreed to make, any illegal contribution, or reimbursed
any illegal political gift or contribution made by any other Person, to any candidate for federal, state, local or foreign public
office or (b) established or maintained any unrecorded fund or asset or made any false entries on any books or records for
any purpose. Each Acquired Company has been duly granted all Permits under all Legal Requirements necessary for either
(y) the conduct of the Business, or (z) the lawful occupancy of the Real Property and the present use and operation thereof. Schedule 3.14
describes each Permit affecting, or relating to, the Assets or the Business together with the Governmental Authority or other Person
responsible for issuing such Permit. Except as disclosed on Schedule 3.14, (a) the Permits are valid and
in full force and effect, (b) no Acquired Company is in breach or violation of, or default under, any such Permit, and, to
the Company’s Knowledge, no basis exists which, with notice or lapse of time or both, would constitute any such breach, violation
nor default and (c) the Permits will continue to be valid and in full force and effect, on identical terms following the consummation
of the Contemplated Transactions.
3.15 Tax
Matters.
3.15.1 Each
Acquired Company has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it in
accordance with all Legal Requirements. All such Tax Returns were true, correct and complete in all respects. All
Taxes owed by each Acquired Company (whether or not shown on any Tax Return) have been timely paid in full. No claim
has ever been made by an authority in a jurisdiction where an Acquired Company does not file Tax Returns that such Acquired Company
is or may be subject to taxation by that jurisdiction, and, to the Company’s Knowledge, there is no basis for any such claim
to be made. There are no Encumbrances with respect to Taxes upon any Asset other than Permitted Encumbrances for current
Taxes not yet due and payable.
3.15.2 Each
Acquired Company has deducted, withheld and timely paid to the appropriate Governmental Authority all Taxes required to be deducted,
withheld or paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other
third party, and each Acquired Company has complied with all reporting and recordkeeping requirements.
3.15.3 To
the Company’s Knowledge, there is no dispute, audit, investigation, proceeding or claim concerning any Tax Liability of any
Acquired Company pending, being conducted, claimed, raised by a Governmental Authority in writing. Except for Asia Pacific
Materials Ltd., the Company has provided or made available to the Buyer true, correct and complete copies of all Tax Returns, examination
reports, and statements of deficiencies filed, assessed against, or agreed to by an Acquired Company since January 1, 2011.
3.15.4 No
Acquired Company has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency. No Acquired Company has executed any power of attorney with respect to any Tax, other
than powers of attorney that are no longer in force. No closing agreements, private letter rulings, technical advice
memoranda or similar agreements or rulings relating to Taxes have been entered into or issued by any Governmental Authority with
or in respect of any Acquired Company.
3.15.5 The
unpaid Taxes of the Acquired Companies did not as of the Most Recent Balance Sheet Date exceed the reserve for Taxes (excluding
any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of
the Most Recent Balance Sheet (rather than in any notes thereto).
3.15.6 No
Acquired Company has made any payments, or has been or is a party to any agreement, contract, arrangement or plan that could result
in it making payments, that have resulted or would result, separately or in the aggregate, in the payment of any “excess
parachute payment” within the meaning of Code Section 280G or in the imposition of an excise Tax under Code Section 4999
(or any corresponding provisions of state, local or foreign Tax law) or that were or would not be deductible under Code Sections
162 or 404.
3.15.7 No
Acquired Company has filed a consent under Code Section 341(f).
3.15.8 No
Acquired Company has ever been a member of an “affiliated group” within the meaning of Code Section 1504(a) filing
a consolidated federal income Tax Return (other than the “affiliated group” the common parent of which is the Company). No
Acquired Company is a party to any contractual obligation relating to Tax sharing or Tax allocation. No Acquired Company
has any Liability for the Taxes of any Person (other than an Acquired Company) under Treasury Regulation 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by contract or otherwise.
3.15.9 No
Acquired Company is or has been required to make any adjustment pursuant to Code Section 481(a) (or any predecessor provision)
or any similar provision of state, local or foreign tax law by reason of any change in any accounting methods, or will be required
to make such an adjustment as a result of the Contemplated Transactions, and there is no application pending with any Governmental
Authority requesting permission for any changes in any of its accounting methods for Tax purposes. To the Company’s
Knowledge, no Governmental Authority has proposed any such adjustment or change in accounting method.
3.15.10 To
the Company’s Knowledge, no Acquired Company will be required to include any amount in taxable income or exclude any item
of deduction or loss from taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result
of (a) any “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of state,
local or foreign Income Tax law) executed on or prior to the Closing Date, (b) any deferred intercompany gain or excess loss
account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision or administrative
rule of federal, state, local or foreign Income Tax law), (c) installment sale or open transaction disposition made on or prior
to the Closing Date, (d) any prepaid amount received on or prior to the Closing Date or (e) any change in Legal Requirements.
3.15.11 To
the Company’s Knowledge, no Acquired Company owns any property of a character, the indirect transfer of which, pursuant to
this Agreement, would give rise to any documentary, stamp, or other transfer Tax.
3.15.12 None
of Acquired Companies has been either a “distributing corporation” or a “controlled corporation” in a distribution
in which the parties to such distribution treated the distribution as one to which Section 355 of the Code is applicable.
3.15.13 None
of the Acquired Companies is a passive foreign investment company as defined under Sections 1291 and 1298 of the Code. None
of the Acquired Companies has recognized a material amount of Subpart F income as defined in Section 952 of the Code during a taxable
year of such company that includes but does not end on the Closing Date.
3.16 Employee
Benefit Plans.
3.16.1 For
purposes of this Agreement, “Employee Plan” means any plan, program, agreement, policy or arrangement, whether
or not reduced to writing, and whether covering a single individual or a group of individuals, that is (a) a welfare plan
within the meaning of Section 3(1) of ERISA, (b) a pension benefit plan within the meaning of Section 3(2) of ERISA, (c) a
stock bonus, stock purchase, stock option, restricted stock, stock appreciation right or similar equity-based plan or (d) any
other deferred-compensation, retirement, welfare-benefit, bonus, incentive or fringe-benefit plan, program or arrangement.
3.16.2 Schedule
3.16 lists all Employee Plans as to which an Acquired Company sponsors, maintains, contributes or is obligated to contribute,
or under which an Acquired Company has or may have any Liability, or which benefits any current or former employee, director, consultant
or independent contractor of an Acquired Company or the beneficiaries or dependents of any such Person (each a “Company
Plan”). With respect to each Company Plan, the Acquired Companies have delivered to the Buyer true, accurate
and complete copies of each of the following: (a) if the plan has been reduced to writing, the plan document together
with all amendments thereto, (b) if the plan has not been reduced to writing, a written summary of all material plan terms, (c)
if applicable, copies of any trust agreements, custodial agreements, insurance policies, administrative agreements and similar
agreements, and investment management or investment advisory agreements, (d) copies of any summary plan descriptions, employee
handbooks or similar employee communications, (e) in the case of any plan that is intended to be qualified under Code Section 401(a),
a copy of the most recent determination letter from the IRS and any related correspondence, and a copy of any pending request for
such determination, (f) in the case of any funding arrangement intended to qualify as a VEBA under Code Section 501(c)(9),
a copy of the IRS letter determining that it so qualifies and (g) in the case of any plan for which Forms 5500 are required to
be filed, a copy of the two most recently filed Forms 5500, with schedules attached.
3.16.3 No
Acquired Company or any other Person that would be considered a single employer with an Acquired Company under the Code or ERISA
has ever maintained a plan subject to Title IV of ERISA or Code Section 412, including any “multiemployer plan” as
defined in Section 4001(a)(8) of ERISA.
3.16.4 Each
Company Plan that is intended to be qualified under Code Section 401(a) is so qualified. Each Company Plan, including
any associated trust or fund, has been administered in accordance with its terms and with applicable Legal Requirements, and nothing
has occurred with respect to any Company Plan that has subjected or could subject an Acquired Company to a penalty under Section
502 of ERISA or to an excise tax under the Code, or that has subjected or could subject any participant in, or beneficiary of,
a Company Plan to a tax under Code Section 4973. Each Company Plan that is a qualified contribution plan is an “ERISA
Section 404(c) Plan” within the meaning of the applicable Department of Labor regulations.
3.16.5 All
required contributions to, and premium payments on account of, each Company Plan have been made on a timely basis.
3.16.6 There
is no pending or, to the Company’s Knowledge, threatened Action relating to a Company Plan, other than routine claims in
the Ordinary Course of Business for benefits provided for by the Company Plans. No Company Plan is or, within the last
six years, has been the subject of an examination or audit by a Governmental Authority, is the subject of an application or filing
under, or is a participant in, a government-sponsored amnesty, voluntary compliance, self-correction or similar program.
3.16.7 Except
as required under Section 601 et seq. of ERISA, no Company Plan provides benefits or coverage in the nature of health, life
or disability insurance following retirement or other termination of employment.
3.17 Environmental
Matters. Except as set forth in Schedule 3.17, to the Company’s Knowledge, (a) the Acquired Companies
and their Predecessors are, and have been, in compliance with all Environmental Laws, (b) the Acquired Companies have obtained
and currently maintain in full force and effect all permits, licenses, authorizations and registrations required by any Environmental
Law for their operations, each of which is listed in Schedule 3.17(b), (c) there is no Action relating to or arising under
any Environmental Law pending, or, to the Knowledge of the Company, threatened, against any of the Acquired Companies or a Predecessor,
and there are no facts, circumstances or conditions that could reasonably be expected to form the basis of any such Action, (c)
there has been no release or threatened release of any pollutant, asbestos, lead or lead-based paint, polychlorinated biphenyls
(PCBs), petroleum or any fraction thereof, contaminant or toxic or hazardous material or substance (including toxic mold), substance
or waste (each a “Hazardous Substance”) at, on, upon, into or from any site currently or heretofore owned, leased
or otherwise used by an Acquired Company, (d) there have been no Hazardous Substances generated, manufactured, handled, transported,
used, treated or stored by an Acquired Company that have been disposed of or come to rest at any site that has been included in
any published U.S. federal, state or local “superfund” site list or any other similar list of hazardous or toxic waste
sites published by any Governmental Authority in the United States, (e) there are no underground storage tanks located on, no PCBs
or PCB-containing equipment used or stored on, and no Hazardous Substances generated, manufactured, handled, transported, used,
treated or stored on, any site currently or heretofore owned, leased or otherwise used by an Acquired Company and (f) the Acquired
Companies have made available to the Buyer true, accurate and complete copies of all environmental records, reports, notifications,
certificates of need, permits, licenses, authorizations, registrations, pending permit applications, correspondence, engineering
studies, and environmental studies or assessments, in each case as amended and in effect.
3.18 Contracts.
3.18.1 Contracts. Except
as disclosed on Schedule 3.18, no Acquired Company is bound by or a party to:
(a) any
contractual obligation (or group of related contractual obligations) for the purchase or sale of inventory, raw materials, commodities,
supplies, goods, products, equipment or other personal property, or for the furnishing or receipt of services, in each case, the
performance of which will extend over a period of more than one year or which provides for aggregate payments to or by an Acquired
Company in excess of $30,000;
(b) (i)
any capital lease or (ii) any other lease or other contractual obligation relating to the Equipment providing for aggregate rental
payments in excess of $5,000 under which any Equipment is held or used by an Acquired Company;
(c) any
contractual obligation, other than Real Property Leases or leases relating to the Equipment, relating to the lease or license of
any Asset, including Technology and Intellectual Property Rights (and including all customer license and maintenance agreements)
that is not included on Schedule 3.13.4;
(d) any
contractual obligation relating to the acquisition or disposition of (i) any business of an Acquired Company (whether by merger,
consolidation or other business combination, sale of securities, sale of assets or otherwise) or (ii) any asset other than in the
Ordinary Course of Business;
(e) any
contractual obligation under which an Acquired Company is, or may become, obligated to pay any amount in respect of indemnification
obligations, purchase price adjustment or otherwise in connection with any (i) acquisition or disposition of assets or securities
(other than the sale of inventory in the Ordinary Course of Business), (ii) merger, consolidation or other business combination
or (iii) series or group of related transactions or events of the type specified in clauses (i) and (ii) above.
(f) any
contractual obligation concerning or consisting of a partnership, limited liability company or joint venture agreement;
(g) any
contractual obligation (or group of related contractual obligations) (i) under which an Acquired Company has created, incurred,
assumed or guaranteed any Debt or (ii) under which an Acquired Company has permitted any Asset to become Encumbered;
(h) any
contractual obligation under which any other Person has guaranteed any Debt of an Acquired Company;
(i) any
contractual obligation relating to confidentiality or non-competition (whether the Acquired Company is subject to or the beneficiary
of such obligations);
(j) any
contractual obligation under which an Acquired Company is, or may become, obligated to incur any severance pay or special Compensation
obligations which would become payable, directly or indirectly, by reason of, this Agreement or the Contemplated Transactions;
(k) any
contractual obligation under which an Acquired Company is, or may, have any Liability to any investment bank, broker, financial
advisor, finder’s agreement or other similar Person (including an obligation to pay any legal, accounting, brokerage, finder’s,
or similar fees or expenses in connection with this agreement or the Contemplated Transactions);
(l) any
profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other plan or arrangement
for the benefit of an Acquired Company’s current or former directors, officers, and employees;
(m) any
contractual obligation providing for the employment or consultancy with an individual on a full-time, part-time, consulting or
other basis or otherwise providing Compensation or other benefits, including but not limited to severance or change of control
benefits, to any officer, director, employee or consultant (other than an Employee Plan);
(n) any
agency, dealer, distributor, sales representative, marketing or other similar agreement;
(o) any
contractual obligation under which an Acquired Company has advanced or loaned an amount to any of its Affiliates or employees other
than in the Ordinary Course of Business;
(p) any
contractual obligation with any Governmental Authority (including a notation as to any such contractual obligation under which
any Acquired Company has a “small business” or similar designation); and
(q) any
other contractual obligation (or group of related contractual obligations) the performance of which involves consideration in excess
of $25,000 over the life of such contractual obligation.
3.18.2 Enforceability;
Breach. To the Company’s Knowledge, each contractual obligation required to be disclosed on Schedule 3.9
(Debt), 3.12 (Real Property Leases), 3.13 (Intellectual Property), 3.16 (Employee Plans), 3.18 (Contracts),
3.20 (Customers and Suppliers) or 3.25 (Insurance) (each, a “Disclosed Contract”) is enforceable
against each party to such contractual obligation, and is in full force and effect, and, subject to obtaining any necessary consents
disclosed in Schedule 3.3, and subject to limitations to enforceability resulting from equitable principles or from bankruptcy,
fraudulent conveyance or insolvency laws affecting creditors’ rights generally, will continue to be so enforceable and in
full force and effect on identical terms following the consummation of the Contemplated Transactions. No Acquired Company
or, to the Company’s Knowledge, any other party to any Disclosed Contract has been or is currently in breach or violation
of, or default under, or has repudiated any provision of, any Disclosed Contract. The Acquired Companies have delivered
to the Buyer true, accurate and complete copies of each written Disclosed Contract, in each case, as amended or otherwise modified
and in effect.
3.19 Affiliate
Transactions. Except for the matters disclosed on Schedule 3.19, no Seller or any Affiliate of any Seller
is an officer, director, employee, consultant, competitor, creditor, debtor, customer, distributor, supplier or vendor of, or is
a party to any contractual obligation with, an Acquired Company. Except as disclosed on Schedule 3.19, no Seller
or any Affiliate of any Seller owns any Asset used in, or necessary to, the Business. At Closing, there will be no amounts owed
to Randall Marx or any Seller by any Acquired Company for (i) previously deferred compensation or (ii) any Liability for any Debt
or loans made by them to any Acquired Company.
3.20 Customers
and Suppliers. Schedule 3.20 sets forth a complete and accurate list of the Acquired Companies' top 10
customers and top 10 suppliers for the fiscal year ended December 31, 2014 and for the six months ended June 30, 2015 (determined
on a consolidated basis based on, in the case of customers, the amount of revenues recognized by the Acquired Companies and, in
the case of suppliers, the dollar amount of payments made by the Acquired Companies). Except as described on Schedule
3.20, no Acquired Company has received any written notice that (and the Company has no Knowledge of) any customers or customers
plans or has threatened to stop or materially decrease the rate of business done with the Acquired Companies or any of them. In
addition, except as described on Schedule 3.20, no Acquired Company has received any written notice that (and the Company
has no Knowledge of) any supplier or suppliers plans or has threatened to stop or materially decrease the rate of business
done with, or materially increase the prices charged to, the Acquired Companies or any of them. Each agreement relating
to such top 10 customers and suppliers is listed on Schedule 3.18 (Contracts).
3.21 Employees. Except
as disclosed on Schedule 3.21, there are no labor troubles (including any arbitrations, grievances, work slowdown, lockout,
stoppage, picketing or strike) pending, or to the Acquired Companies’ Knowledge, threatened between an Acquired Company,
on the one hand, and its employees, on the other hand, and there have been no such troubles at any time during the past five years. Except
as disclosed on Schedule 3.21, (a) no employee of an Acquired Company is represented by a labor union, (b) no Acquired Company
is a party to, or otherwise subject to, any collective bargaining agreement or other labor union contract, (c) no petition has
been filed or proceedings instituted by or on behalf of an employee or group of employees of an Acquired Company with any labor
relations board seeking recognition of a bargaining representative and there are no pending or threatened charges or complaints
before the National Labor Relations Board or analogous State of foreign Governmental Entities, (d) no Acquired Company has, or
is currently engaged in any unfair labor practice, and (e) there is no organizational effort currently being made or threatened
by, or on behalf of, any labor union to organize employees of an Acquired Company and no demand for recognition of employees of
an Acquired Company has been made by, or on behalf of, any labor union. No executive officer’s or other key employee’s
employment with the Acquired Companies has been terminated for any reason nor has any such officer or employee notified the Company
of his or her intention to resign or retire since at any time during the past five years. No Acquired Company has implemented
any plant closings or layoff of employees that would constitute a “plant closing” or a “mass layoff” within
the meaning of the WARN Act or any State of local analogy thereto. Neither the execution and delivery of this Agreement
nor the consummation of any Contemplated Transaction will (either alone or upon the occurrence of any additional or subsequent
event or events) (i) result in any payment (whether of severance pay or otherwise) becoming due to any employee, officer, consultant,
independent contractor, agent or director of any Acquired Company (ii) increase any benefit under any Employee Plan or (iii) result
in the acceleration before its due date or maturity date of the time of payment or vesting of any such payment or benefits.
3.21.1 Schedule
3.21.1 lists all current employees and independent contractors of the Acquired Companies and such individual’s (a) classification
as an employee or independent contractor; (b) classification as exempt or non-exempt from any Legal Requirement relating to the
payment of minimum wage or overtime wages, (c) the date the individual commenced providing services to an Acquired Company, (d)
current annual base salary or hourly rate of pay, (e) participation in any Company Plan, (f) leave status and expected date of
return if he or she is on leave, and (g) title. As of the date hereof and as of the Closing Date, each Acquired Company, (i) have
paid in full or accrued in full on the Balance Sheet all compensation, including wages, commissions, bonuses and accrued vacation
or other paid time off, payable to such employees and independent contractors of such Acquired Company for services performed on
or prior to the applicable date; and (ii) has paid or withheld or collected from their employees the amount of all Taxes required
to be withheld or collected therefrom and have paid the same when due to the proper Governmental Authority. The employment or services
of all persons employed by or providing services to an Acquired Company is terminable at will without any penalty or severance
obligation on the part of any Acquired Company. Except with respect to three employees in China, there are no employment,
severance pay, continuation pay, termination or indemnification agreements or arrangements between an Acquired Company and any
current or former officer, director, manager, employee, consultant or independent contractor of an Acquired Company, and no representation,
promise, or guarantee of any kind has been made to its employees regarding the employee’s continued employment with an Acquired
Company or the terms of any employee’s compensation.
3.22 Litigation;
Governmental Orders. During the past five (5) years there have been no Actions pending, or, to the Knowledge of
the Acquired Companies, threatened against any Acquired Company and to the Knowledge of the Acquired Companies, there are no facts
making the commencement of any such Action reasonably likely. None of the Acquired Companies (i) is the subject of any
judgment, decree, injunction or Government Order or (ii) plans to initiate any Action.
3.23 Product
Warranties. Except as set forth on Schedule 3.23 (and except for other liabilities for which there is a reserve
reflected in the Financial Statements), there are no claims outstanding, pending or, to the Sellers’ Knowledge, threatened
for breach of any express written warranty relating to any products manufactured, sold or delivered by the Acquired Companies. To
the Company’s Knowledge there is no material design defect with respect to the any of the Acquired Companies’ products.
3.24 Insurance. Schedule
3.24 sets forth a true and complete list of all insurance policies in force with respect to the Acquired Companies (collectively
“Liability Policies”). The list includes for each Liability Policy the type of policy, form of coverage,
policy number, name of insurer, period (term), limits, deductibles and premiums. All such policies are in full force
and effect, all premiums with respect thereto covering all periods up to and including the Closing will have been paid, no Acquired
Company is in default thereunder, and no notice of cancellation or termination has been received by any Acquired Company with respect
to any such policy. No insurer has (a) questioned, denied or disputed (or otherwise reserved its rights with respect
to) the coverage of any claim pending under any insurance policy or (b) to the Knowledge of the Acquired Companies, has threatened
to cancel any insurance policy. Except as disclosed on Schedule 3.24, to the Knowledge of the Acquired Companies, no insurer
plans to raise the premiums for, or materially alter the coverage under, any such insurance policy. Except as disclosed
on Schedule 3.24, the Acquired Companies will after the Closing continue to have coverage under all such insurance policies
and all such policies are in compliance with any requirements of Company contractual obligations.
3.25 Bank
Accounts; Powers of Attorney. Schedule 3.25 sets forth (a) the name of each bank, trust corporation or other
financial institution and stock or other broker with which each Acquired Company has an account, credit line or safe deposit box
or vault, (b) the names of all Persons authorized to draw thereon or to have access to any safe deposit box or vault, (c) the purpose
of each such account, safe deposit box or vault, and (d) the names of all Persons authorized by proxies, powers of attorney or
other like instruments to act on behalf of an Acquired Company in the matters concerning its business or affairs. No
such proxies, powers of attorney or other like instruments are irrevocable.
3.26 No
Brokers. No Acquired Company has any Liability of any kind to, or is subject to any claim of, any broker, finder
or agent in connection with the Contemplated Transactions other than those, if any, which have been incurred by the Sellers.
3.27 Inventory. Schedule
3.27 sets forth a list of all inventory of the Company as of October 15, 2015. All inventory of the Acquired Companies
consists of a quality and quantity that is materially usable and salable in the Ordinary Course of Business, except for obsolete
items and items of below-standard quality, all of which have been or will be, as applicable, written off or written down to net
realizable value, or otherwise not included, in the Most Recent Balance Sheet. All inventories not written off have
been priced at the lower of cost or market on a first in, first out basis. The quantities of each item of inventory
(whether raw materials, work-in-process, or finished goods) are not excessive, but are reasonable in the present circumstances
of the Acquired Companies.
3.28 Disclosure. The
representations and warranties of the Company and the Acquired Companies contained in this Section 3 and in the Ancillary Agreements,
as well as the certificates furnished by the Company, the Sellers’ Representative and the Sellers to the Buyer, both with
respect to this Agreement and the Ancillary Agreements, do not contain and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements and information contained therein not misleading.
4. INDIVIDUAL
REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
Each Seller, hereby
represents and warrants to the Buyer, solely as to such Seller, and, except as otherwise provided herein or in the Escrow Agreement,
with no joint or other responsibility for the representations, warranties or other liabilities or obligations of any other Seller
or of, or for, any of the Acquired Companies, as of the date hereof and as of the Closing Date, that:
4.1 Organization. In
the case of each Seller which is not an individual, such Seller is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization.
4.2 Power
and Authorization. The execution, delivery and performance by such Seller of this Agreement and each Ancillary Agreement
to which it is (or will be) a party and the consummation of the Contemplated Transactions are within the power and authority of
such Seller and, if applicable, have been duly authorized by all necessary action on the part of such Seller. This Agreement
and each Ancillary Agreement to which such Seller is (or will be) a party (a) has been (or, in the case of Ancillary Agreements
to be entered into at or prior to the Closing, will be) duly executed and delivered by such Seller and (b) is (or in the case
of Ancillary Agreements to be entered into at or prior to the Closing, will be) a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms, except as enforceability may be limited by equitable principles or
by bankruptcy, fraudulent conveyance or insolvency laws affecting creditors’ rights generally. No action by , or in respect
of, or filing with, any Governmental Authority is required for, or in connection with, the valid and lawful (a) authorization,
execution, delivery and performance by such Seller of this Agreement or (b) the consummation of the Contemplated Transactions by
such Seller.
4.3 Noncontravention. Except
as disclosed on Schedule 4.3, neither the execution, delivery and performance by such Seller of this Agreement or any Ancillary
Agreement to which such Seller is (or will be) a party nor the consummation of the Contemplated Transactions will: (a) assuming
the taking of any action by (including any authorization, consent or approval) or in respect of, or any filing with, any Governmental
Authority, in each case, as disclosed on Schedule 4.3, violate any provision of any Legal Requirement applicable to such
Seller; (b) result in a breach or violation of, or default under, any contractual obligation of such Seller; (c) require any action
by (including any authorization, consent or approval) or in respect of (including notice to), any Person under any contractual
obligation; or (d) if such Seller is not an individual, result in a breach or violation of, or default under, such Seller’s
organizational documents.
4.4 Title. Such
Seller is the record and beneficial owner of the outstanding Shares set forth opposite such Seller’s name on Schedule
4.4, and has good and marketable title to such Shares, free and clear of all Encumbrances. Such Seller has full
right, power and authority to transfer and deliver to the Buyer valid title to the Shares held by such Seller, free and clear of
all Encumbrances. Immediately following the Closing, the Buyer will be the record and beneficial owner of such Shares,
and have good and marketable title to such Shares, free and clear of all Encumbrances. Except pursuant to this Agreement, there
is no contractual obligation pursuant to which such Seller has, directly or indirectly, granted any option, warrant or other right
to any Person to acquire any Shares or other equity interests in an Acquired Company.
4.5 No
Brokers. Such Seller has no Liability of any kind to any broker, finder or agent with respect to the Contemplated
Transactions for which the Buyer could be liable, and such Seller agrees to satisfy in full any such Liability to any broker, finder,
agent or other person.
4.6 Securities
Law Matters. Such Seller hereby acknowledges that the shares of Vringo Securities (including the shares of common
stock to be issued upon conversion of the shares of Buyer’s preferred stock (the “Conversion Shares”))
being issued to such Seller hereunder have not been registered under the 1933 Act, or registered or qualified for sale under any
state securities laws, and cannot be resold without registration thereunder or exemption therefrom. Such Seller represents
that such Seller is an “accredited investor,” as such term is defined in Rule 501(a)(1), (2), (3) or (7) of Regulation
D of the 1933 Act, and will acquire the shares of Vringo Securities and the Conversion Shares for his, her or its own account and
not with a view to a sale or distribution thereof. Such Seller represents that such Seller has sufficient knowledge and experience
in financial and business matters to enable him, her or it to evaluate the risks of investment in the Vringo Securities and the
Conversion Shares, is acquiring the Vringo Securities with a full understanding of all of the terms, conditions and risks thereof,
and on the Closing Date will bear and have the ability to bear the economic risk of this investment for an indefinite period of
time. Such Seller represents that such Seller understands and agrees to the terms and conditions under which the shares
of Vringo Securities are being offered.
4.7 Legend. Each
Seller acknowledges that, to the extent applicable, each certificate evidencing the shares of Vringo Securities and the Conversion
Shares being issued hereunder shall be endorsed with a legend substantially in the form set forth below, as well as any additional
legend imposed or required by applicable securities laws:
“THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY U.S.
STATE, NOR IS ANY SUCH REGISTRATION CONTEMPLATED. THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.”
4.8 Restricted
Securities. Each Seller acknowledges that the Vringo Securities (including the Conversion Shares) being offered
hereunder are “restricted securities” (as such term is defined in Rule 144 under the 1933 Act) and must be held indefinitely
unless subsequently registered under the 1933 Act or an exemption from such registration is available.
4.9 Access
to Information. Each Seller acknowledges that he has been afforded an opportunity to request and to review all information
considered by that Seller to be necessary to make an investment decision with respect to the Vringo Securities being issued hereunder. Each
Seller also acknowledges that he has received and reviewed information about Buyer and has had an opportunity to discuss Buyer’s
business, management and financial affairs with its management.
4.10 Reliance
Upon Representations. Each Seller understands and acknowledges that: (a) the Vringo Securities being
issued hereunder have not been registered under the 1933 Act; (b) the representations and warranties contained in Sections 4.6
through 4.11 are being relied upon by Buyer as a basis for exemption of the issuance of the Vringo Securities (including the Conversion
Shares) under the 1933 Act; (c) the offering of the Vringo Securities pursuant to this Agreement will not be registered under the
1933 Act based on a determination that the issuance of securities hereunder is exempt from the registration requirements of the
1933 Act; and (d) no state or federal agency has made any finding or determination as to the fairness of the terms of the sale
of the Vringo Securities or any recommendation or endorsement thereof. If any of the representations made by any Seller
in connection with the purchase of Vringo Securities is no longer accurate prior to the Closing Date, such Seller will promptly
notify Buyer.
4.11 Exculpation;
Representation by Counsel. Each Seller acknowledges that he, she or it is not relying upon any Person, including,
without limitation, the Buyer, in making its decision to acquire the Vringo Securities, other than the representations and warranties
of the Buyer contained in this Agreement. Each Seller represents that he, she or it is aware that it has not been represented in
this transaction by the Company’s legal counsel or by any legal counsel provided by the Company, that the Company has advised
the Seller that it should retain the Seller’s own legal counsel to advise it with respect to the transaction, and that the
Seller has had the opportunity to consult with its own personal counsel concerning the advisability of entering into and executing
and delivering this Agreement. Each Seller further represents that the Seller understands that the Company’s legal
counsel has reviewed the Agreement and other documents only as counsel to the Company and not on behalf of the Seller.
5. REPRESENTATIONS
AND WARRANTIES OF THE BUYER.
The Buyer represents
and warrants to the Sellers, as of the date hereof and as of the Closing Date, that:
5.1 Organization. The
Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.
5.2 Power
and Authorization. The execution, delivery and performance by the Buyer of this Agreement and each Ancillary Agreement
to which it is (or will be) a party and the consummation of the Contemplated Transactions are within the power and authority of
the Buyer and have been duly authorized by all necessary action on the part of the Buyer. This Agreement and each Ancillary
Agreement to which the Buyer is (or will be) a party (a) has been (or, in the case of Ancillary Agreements to be entered into
at or prior to the Closing, will be) duly executed and delivered by the Buyer and (b) is (or in the case of Ancillary Agreements
to be entered into at or prior to the Closing, will be) a legal, valid and binding obligation of the Buyer, enforceable against
the Buyer in accordance with its terms, except as enforceability may be limited by equitable principles or by bankruptcy, fraudulent
conveyance or insolvency laws affecting creditors’ rights generally
5.3 Authorization
of Governmental Authorities. Except for any filings required by the SEC or NASDAQ, no action by (including any authorization,
consent or approval), or in respect of, or filing with, any Governmental Authority is required for, or in connection with, the
valid and lawful (a) authorization, execution, delivery and performance by the Buyer of this Agreement and each Ancillary Agreement
to which it is (or will be) a party or (b) the consummation of the Contemplated Transactions by the Buyer.
5.4 Noncontravention. Neither
the execution, delivery and performance by the Buyer of this Agreement or any Ancillary Agreement to which it is (or will be) a
party nor the consummation of the Contemplated Transactions will: (a) assuming the taking of any action by (including any authorization,
consent or approval) or in respect of, or any filing with, any Governmental Authority, in each case, as disclosed on Schedule
5.3, violate any provision of any Legal Requirement applicable to the Buyer; (b) result in a breach or violation of, or default
under, any contractual obligation of the Buyer; (c) require any action by (including any authorization, consent or approval) or
in respect of (including notice to), any Person under any contractual obligation; or (d) result in a breach or violation of, or
default under, the Buyer’s organizational documents.
5.5 No
Brokers. The Buyer has no Liability of any kind to any broker, finder or agent with respect to the Contemplated
Transactions for which the Sellers could be Liable, and Buyer agrees to satisfy in full any such Liability incurred by Buyer to
any broker, finder, agent or other Person.
5.6 Investment
Representation. Buyer is purchasing the Shares for its own account with the present intention of holding such securities
for investment purposes and not with a view to or for sale in connection with any public distribution of such securities in violation
of any federal or state securities laws. Buyer acknowledges that it is informed as to the risks of the transactions
contemplated hereby and of ownership of the Sharers. Buyer acknowledges that the Shares have not been registered under
the 1933 Act or registered or qualified under any state or foreign securities laws and that the Shares may not be sold, transferred,
offered for sale, pledged, hypothecated or otherwise disposed of unless such transfer, sale, assignment, pledge, hypothecation
or other disposition is pursuant to the terms of an effective registration statement under the 1933 Act and are registered under
any applicable state or foreign securities laws or pursuant to an exemption from registration under the 1933 Act and any applicable
state or foreign securities laws.
5.7 SEC
Filings; Financial Statements.
(a) Since
January 1, 2015, Buyer has timely filed (including any extension permitted under the SEC’s rules) or otherwise furnished
(as applicable) all registration statements, prospectuses, forms, reports, definitive proxy statements, schedules, statements and
documents required to be filed or furnished by it under the 1933 Act or the Securities Exchange Act of 1934 (the “Exchange
Act”), as the case may be, together with all certifications required pursuant to the Sarbanes-Oxley Act of 2002 (the
“Sarbanes Oxley Act”) such documents and any other documents filed by Buyer with the SEC, as have been supplemented,
modified or amended since the time of filing, collectively, the “Buyer SEC Documents”). As of their
respective filing dates, the Buyer SEC Documents (i) did not (or with respect to Buyer SEC Documents filed after the date hereof,
will not) contain any untrue statement of any material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances under which they were made, not misleading and (ii)
complied (or will comply) in all material respects with the applicable requirements of the Exchange Act or the 1933 Act, as the
case may be, the Sarbanes-Oxley Act and the applicable rules and regulations of the SEC under each of those statutes, rules, and
regulations.
(b) All
of the audited financial statements and unaudited interim financial statements of Buyer included in the Buyer SEC Documents (i)
have been or will be, as the case may be, prepared from, are in accordance with, and accurately reflect the books and records of
Buyer in all material respects, (ii) have been or will be, as the case may be, prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated in the notes thereto or, in the case of interim financial statements,
for normal and recurring year-end adjustments that are not material in amount or nature and as may be permitted by the SEC on Form
10-Q, Form 8-K or any successor or like form under the Exchange Act) and (iii) fairly and accurately present in all material respects
the consolidated financial position and the consolidated results of operations, cash flows and changes in stockholders’ equity
of the Buyer as of the dates and for the periods referred to therein. Without limiting the generality of the foregoing,
(i) no independent public accountant of Buyer has resigned or been dismissed as independent public accountant of Buyer as a result
of or in connection with any disagreement with Buyer on a matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, (ii) no executive officer of Buyer has failed in any respect
to make, without qualification, the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act with
respect to any form, report or schedule filed by Buyer with the SEC since the enactment of the Sarbanes-Oxley Act and (iii) no
enforcement action has been initiated or, to the knowledge of Buyer, threatened against Buyer by the SEC relating to disclosures
contained in any Buyer SEC Document.
5.8 Capitalization
of the Buyer. As of the Closing Date, the entire authorized capital stock of the Buyer is as set forth in the Buyer
SEC Documents. All of the outstanding shares of capital stock of the Buyer have been duly authorized, validly issued,
and are fully paid and non-assessable. Subject to the truth and accuracy of the representations and warranties of Sellers
set forth in Section 4. The Buyer has not violated and in entering into and effecting the Contemplated Transactions will not violate,
the 1933 Act, the Exchange Act, any state “blue sky” or securities laws, any other similar Legal Requirement or any
preemptive or other similar rights of any Person in connection with the issuance of the Vringo Securities. Except as
disclosed in the Buyer SEC Documents or as otherwise contemplated by this Agreement: (a) there are no preemptive rights
or other similar rights in respect of any equity interests in the Buyer, (b) there is no contractual obligation, or provision in
the organizational documents of the Buyer which obligates the Buyer to purchase, redeem or otherwise acquire, or make any payment
(including any dividend or distribution) in respect of any equity interests in the Buyer, and (c) there are no existing rights
with respect to registration under the 1933 Act of any equity interests in the Buyer. Except as set forth in the Buyer
SEC Documents or as otherwise contemplated by this Agreement, as of the date of this Agreement, there are no outstanding or authorized
options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to
any equity interests in the Buyer or obligating the Buyer to issue or sell any interest in the Buyer.
5.9 Access
to Information. Buyer acknowledges that it has been afforded an opportunity to request and to review all information
considered by Buyer to be necessary to make an investment decision with respect to the Shares. Buyer has received and
reviewed information about the Company and about each Seller’s Shares, and has had an opportunity to discuss these matters,
including the business, management and financial affairs of the Acquired Companies with management of the Acquired Companies, and
to discuss information concerning the ownership of the Shares with the individual owners to the extent deemed necessary by Buyer.
6. COVENANTS.
6.1 Closing. The
Sellers’ Representative will, and will cause the Acquired Companies to and each Seller, with respect to itself only, cooperate
with the Buyer to take all of the actions and deliver all the various certificates, documents and instruments described in Section
7 as being performed or delivered by the Sellers the Acquired Companies or the Sellers’ Representative, as applicable.
6.2 Operation
of Business. From the date of this Agreement until the earlier of the Closing or the termination of this Agreement
pursuant to Section 9, the Company and will cause the Acquired Companies to: (a) conduct the Business only in the Ordinary Course
of Business; (b) maintain the value of the Business as a going concern; (c) preserve intact its business organization and relationships
with third parties (including lessors, licensors, suppliers, distributors and customers) and employees; and (d) consult with the
Buyer prior to taking any action or entering into any transaction that may be of strategic importance to an Acquired Company. Without
limiting the generality of Section 6.2, without the written consent of the Buyer, the Company and the Acquired Companies will not:
(a) take any action, other than in the Ordinary Course of Business, that would cause the representations and warranties in Section
3 or any of the information set forth on the Sellers’ disclosure schedules to be untrue at, or as of any time prior to, the
Closing Date; and (b) take any action, other than in the Ordinary Course of Business or as disclosed on Schedule 3.8, which, if
taken or omitted to be taken between the Most Recent Balance Sheet Date and the date of this Agreement would have been required
to be disclosed on Schedule 3.8. Without limiting the generality of the foregoing, the Company and the Acquired Companies
will not, without the prior written consent of Buyer, other than in the
Ordinary Couse of Business (i) sell any assets, other than sales of inventory in the Ordinary Course of Business, (ii) incur any
new Debt, (iii) prepay or discharge any existing Debt or liabilities (including accounts payable) before normal due dates, (iv)
alter or change any terms or alter or amend its respective organizational documents, (v) make or change any Tax election, adopt
or change any accounting method with respect to Taxes, file any amended Tax Return, consent to any extension or waiver of the limitation
period applicable to any Tax claim or assessment relating to the Acquired Companies, or take any other similar action relating
to the filing of any Tax Return or the payment of any Tax. (vi) issue or sell equity or rights to acquire equity of any Acquired
Company, (vii) declare dividends on, make distributions with respect to, or redeem any portion of, the equity of any Acquired Company,
(viii) materially increase the level of compensation or employee benefits of any employee, except in amounts in keeping with past
practices by formulas or otherwise, or (ix) agree to do any of the foregoing.
6.3 Notices
and Consents. The Acquired Companies shall and the Sellers’ Representative shall cause the Acquired Companies
to give all notices to, make all filings with and use their commercially reasonable efforts to obtain all authorizations, consents
or approvals from, any Governmental Authority or other Person that are set forth on Schedule 3.3 and Schedule 3.4
or as otherwise reasonably requested by the Buyer. The Buyer will give all notices to, make all filings with and use
its commercially reasonable efforts to obtain all authorizations, consents or approvals from, any Governmental Authority or other
Person that are set forth on Schedule 5.3 or as otherwise reasonably requested by the Company.
6.4 Buyer’s
Access to Premises; Information. From the date of this Agreement until the earlier of the Closing or the termination
of this Agreement pursuant to Section 9, the Acquired Companies will permit the Buyer and its Representatives to have full access
(at reasonable times and upon reasonable notice) to all officers of the Acquired Companies and to all premises, properties, books,
records (including Tax records), contracts, financial and operating data and information and documents pertaining to the Acquired
Companies and make copies of such books, records, contracts, data, information and documents as the Buyer or its Representatives
may reasonably request. The Company will prepare and furnish to the Buyer, promptly after becoming available and in
any event within 15 days of the end of each calendar month, Monthly Financials for each month following the Most Recent Balance
Sheet Date through the Closing Date.
6.5 Notice
of Developments. From the date of this Agreement until the earlier of the Closing or the termination of this Agreement
pursuant to Section 9, the Company will give the Buyer prompt written notice upon becoming aware of any material development affecting
the Assets, Liabilities, Business, financial condition, operations or prospects of an Acquired Company, or any event or circumstance
that could reasonably be expected to result in a breach of, or inaccuracy in, any of the Company’s or the Sellers’
representations and warranties. Nothing contained herein shall affect the Buyer’s rights or remedies with respect
to, or the Company’s or any Seller’s obligations or Liabilities resulting from, any such development, breach or inaccuracy.
6.6 Exclusivity. From
the date of this Agreement until the earlier of the Closing or the termination of this Agreement pursuant to Section 9, the Company
will (and the Company will not permit its Affiliates or any of their or their Affiliates’ Representatives to) directly or
indirectly: (a) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating
to, or enter into or consummate any transaction relating to, the acquisition of any equity interests in the Acquired Companies
or any merger, recapitalization, share exchange, sale of substantial Assets (other than sales of inventory in the Ordinary Course
of Business) or any similar transaction or alternative to the Contemplated Transactions or (b) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any Person to do or seek any of the foregoing. None of the Sellers will vote their Shares in favor
of any such acquisition structured as a merger, consolidation, share exchange or otherwise. The Company and the Sellers’
Representative will notify the Buyer immediately if any Person makes any proposal, offer, inquiry or contact with respect to any
of the foregoing (whether solicited or unsolicited). Each Seller and the Company acknowledges and agrees that any breach or threatened
breach of this Section 6.6. shall cause irreparable injury to Buyer and money damages would be difficult to ascertain and, therefore,
the Company agrees to pay liquidated damages to Buyer in an amount equal to $200,000 for any such breach or threatened breach,
plus any costs and expenses, including reasonable legal fees and expenses, incurred by Buyer in seeking to enforce the provisions
of this Section 6.6.
6.7 Transaction
Expenses; Debt. At or prior to Closing, Sellers shall cause to be paid and satisfied in full any and all Seller
Transaction Expenses. In addition, at or prior to Closing, each Seller will, and will cause each of its Affiliates, except for
Affiliates that also are Acquired Companies, to satisfy all Liabilities it has to any Acquired Company in respect of Debt.
6.8 Sellers’
Release. Effective as of the Closing, each Seller hereby releases, remises and forever discharges any and all rights
and claims that it has had, now has or might now have against the Acquired Companies except for (a) rights and claims arising from
or in connection with this Agreement and the Ancillary Agreements, and (b) rights and claims arising from or in connection with
claims asserted against such Seller by third parties for which the Buyer Indemnified Persons are not entitled to indemnification
by such Seller pursuant to Section 10.2.
6.9 Confidentiality. The
Buyer acknowledges that the information provided to it in connection with this Agreement and the transactions contemplated hereby
is subject to the terms of the confidentiality agreement between the Buyer and the Company dated June 10, 2015 (the “Confidentiality
Agreement”), the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing
Date, the Confidentiality Agreement shall terminate with respect to information relating solely to the Business. Sellers
hereby agree with Buyer that Sellers will not, and that Sellers will cause their Affiliates not to, at any time on or after the
Closing Date, directly or indirectly, without the prior written consent of the Buyer, disclose or use, any confidential or proprietary
information involving or relating to the Business.
6.10 Publicity. No
public announcement or disclosure will be made by any party with respect to the subject matter of this Agreement or the Contemplated
Transactions without the prior written consent of the Buyer and the Sellers’ Representative; provided, however,
notwithstanding anything to the contrary herein or in the Confidentiality Agreement, the provisions of Section 6.9 and this Section
6.10 will not prohibit (a) a press release and Form 8-K filed with the SEC by Buyer disclosing the entry into of this Agreement
and the transactions contemplated thereby, (b) any disclosure required by any applicable Legal Requirements after the full execution
of this Agreement, (c) any disclosure made in connection with the enforcement of any right or remedy relating to this Agreement
or the Contemplated Transactions; (d) any disclosure by the Sellers and the Buyer to report and disclose the status of this Agreement
and the Contemplated Transactions in the Ordinary Course of Business to their board of directors, owners and Affiliates; provided,
further, however, that after the Closing, all parties are freely permitted to make any such public announcements
or disclosures of matters that previously have been publicly disclosed.
6.11 Further
Assurances. From and after the Closing Date, upon the request of either the Sellers’ Representative or the
Buyer, each of the parties hereto will do, execute, acknowledge and deliver all such further acts, assurances, deeds, assignments,
transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the Contemplated
Transactions in a manner that is in accordance, and consistent, with this Agreement. No Seller will take any action
that is designed or intended to have the effect of discouraging any lessor, licensor, supplier, distributor or customer of an Acquired
Company or other Person with whom an Acquired Company has a relationship from maintaining the same relationship with the Acquired
Company after the Closing as it maintained prior to the Closing. Each Seller will refer all customer inquiries relating to the
Business to the Buyer, or an Acquired Company, as appropriate, from and after the Closing.
6.12 Legal
Opinion. On or before the date that is 181 days after Closing and within five business days of a request of the
Sellers’ Representative on behalf of a Seller, Buyer shall deliver a written opinion in substantially the form of Exhibit
D to the Sellers’ Representative for the benefit of such Seller; provided, that, Buyer’s obligation to deliver
such opinion shall be subject to the receipt by Buyer from such Seller of a representation letter in connection with such Seller’s
proposed sale of Vringo Securities in substantially the form of Exhibit E attached hereto. Provided that each
Seller has delivered its respective representation letter in substantially the form of Exhibit E in connection with such Seller’s
proposed sale of Vringo Securities and the Buyer fails to deliver the opinion as required by this Section, Buyer shall pay to such
Seller liquidated damages of three percent (3%) of the market value of the Vringo Securities subject to such opinion in cash and
such payment shall continue every 30 days on a pro rata basis thereafter until such opinion is delivered. Notwithstanding anything
to the contrary set forth herein, no liquidated damages shall be payable with respect to any Vringo Securities that are not converted
to shares of Buyer common stock and/or are being held in escrow pursuant to the terms of this Agreement and the Escrow Agreement.
6.13 Limitation
on Personal Liability of Officers and Directors of Acquired Companies. The directors and officers of the Acquired
Companies will not have any personal liability for any matters in this Agreement, including representations and warranties, for
which they are acting in their respective capacities as officers or directors of the Acquired Companies, except to the extent that
they are making a representation, warranty or covenant as a Seller or to the extent that they have made false statements that they
knew were false at the time of making the statement, or they otherwise intentionally violated their duties to any of the Acquired
Companies.
7. CONDITIONS
TO THE BUYER’S OBLIGATIONS AT THE CLOSING.
The obligations of
the Buyer to consummate the Closing is subject to the fulfillment of each of the following conditions (unless waived by the Buyer
in accordance with Section 12.3):
7.1 Representations
and Warranties. The representations and warranties of the Company and the Sellers contained in this Agreement and
in any document, instrument or certificate delivered hereunder (a) that are not qualified by materiality or Material Adverse Effect
will be true and correct in all material respects at and as of the Closing with the same force and effect as if made as of the
Closing and (b) that are qualified by materiality or Material Adverse Effect will be true and correct in all respects at and as
of the Closing with the same force and effect as if made as of the Closing, in each case, other than representations and warranties
that expressly speak only as of a specific date or time, which will be true and correct as of such specified date or time.
7.2 Performance. Each
Acquired Company and each Seller will have performed and complied in all material respects, with all agreements, obligations and
covenants contained in this Agreement that are required to be performed or complied with by each of them, respectively, at or prior
to the Closing.
7.3 Stock
Certificates; Options and Warrants. The Sellers will have delivered to the Buyer certificates, duly endorsed (or
accompanied by duly executed stock transfer powers) evidencing all of the Shares. Any options or warrants to acquire any capital
stock of any Acquired Company shall have been exercised or otherwise terminated.
7.4 Compliance
Certificate. Buyer shall have received a certificate, dated the Closing Date and signed by the Sellers’ Representative
and a duly authorized officer of the Company, that each of the conditions set forth in Section 7.1, Section 7.2, Section 7.6, Section
7.12 and Section 7.13 have been satisfied.
7.5 Qualifications. No
provision of any applicable Legal Requirement and no Government Order will prohibit the consummation of any of the Contemplated
Transactions.
7.6 Absence
of Litigation. No Action will be pending or threatened in writing which may result in a Governmental Order (nor
will there be any Governmental Order in effect) (a) which would prevent consummation of any of the Contemplated Transactions, (b)
which would result in any of the Contemplated Transactions being rescinded following consummation, (c) which would limit or otherwise
adversely affect the right of the Buyer to own the Shares (including the right to vote the Shares), to control the Acquired Companies,
or to operate all or any material portion of either the Business or Assets or of the business or assets of the Buyer or any of
its Affiliates or (d) would compel the Buyer or any of its Affiliates to dispose of all or any material portion of either the Business
or Assets or the business or assets of the Buyer or any of its Affiliates.
7.7 Consents,
etc.. All actions by (including any authorization, consent or approval) or in respect of (including notice to),
or filings with, any Governmental Authority or other Person that are required to consummate the Contemplated Transactions, as disclosed
in Schedule 3.3, Schedule 3.4, Schedule 3.9 and Schedule 4.3, or as otherwise reasonably requested
by the Buyer, will have been obtained or made, in a manner reasonably satisfactory in form and substance to the Buyer (including
any authorizations, consents or approvals required by any lenders or suppliers), and no such authorization, consent or approval
will have been revoked.
7.8 FIRPTA
Certificate. The Company will have delivered to the Buyer a duly executed certificate conforming to the requirements
of Treasury Regulation Section 1.1445-2(b)(2).
7.9 Proceedings
and Documents. All corporate and other proceedings on the part of the Acquired Companies and the Sellers in connection
with the Contemplated Transactions and all documents incident thereto will be reasonably satisfactory in form and substance to
the Buyer and its counsel, and they will have received all such counterpart original and certified or other copies of such documents
as they may reasonably request.
7.10 Ancillary
Agreements. Each of the Ancillary Agreements required to be delivered to the Buyer will have been executed and delivered
to the Buyer by each of the other parties thereto.
7.11 Resignations. The
Buyer will have received the resignation of Randall P. Marx as sole officer and director of, and from any other position with,
each of the Acquired Companies.
7.12 No
Material Adverse Effect. Since the Balance Sheet Date, there will have occurred no events nor will there exist circumstances
which singly or in the aggregate have resulted in a Material Adverse Effect.
7.13 Repayment
of Indebtedness; Seller Transaction Expenses. Buyer shall have received evidence reasonably satisfactory to it that
(a) any and all Debt or other obligations or Liabilities of any Acquired Company to Randall Marx or to The Randall P. And Marilyn
S. Marx Living Trust (or any related person or party) shall have been repaid by the Company prior to Closing and (b) all Seller
Transaction Expenses and all amounts owed by the Acquired Companies to Haynes and Boone, LLP shall have been paid prior to Closing.
7.14 Consulting
Agreement. Buyer (or the Company) shall have entered into a consulting agreement with Randall P. Marx, in form and
substance reasonably satisfactory to the Buyer and to Mr. Marx.
7.15 Hong
Kong Subsidiary. Buyer shall have received evidence reasonably satisfactory to it that Asia Pacific Materials Ltd.
has been spun-out or otherwise terminated as a Subsidiary or Affiliate of any Acquired Company. Any and all legal, accounting,
audit or other fees and expenses that might be due and payable in connection with the above shall be borne by the Sellers and not
the Buyer or any Acquired Company.
7.16 Tax
Returns. The Company shall have provided evidence to Buyer that the Company has filed, or caused to be filed on
its behalf, all Tax Returns required to be filed by any Acquired Company for the year ending December 31, 2014 and all Taxes owed
by each Acquired Company (whether or not shown on any Tax Return) shall have been paid in full.
7.17 UCC-3
Termination Statements. Buyer shall have received evidence reasonably satisfactory to it that the UCC-1 financing
statements set forth on Schedule 3.10 shall have been terminated by the filing of UCC-3 termination statements.
8. CONDITIONS
TO THE SELLERS’ OBLIGATIONS AT THE CLOSING.
The obligations of
the Sellers to consummate the Closing is subject to the fulfillment of each of the following conditions (unless waived by the Sellers’
Representative in accordance with Section 12.3):
8.1 Representations
and Warranties. The representations and warranties of the Buyer contained in this Agreement and in any document,
instrument or certificate delivered hereunder (a) that are not qualified by materiality or Material Adverse Effect will be true
and correct in all material respects at and as of the Closing with the same force and effect as if made as of the Closing and (b)
that are qualified by materiality or Material Adverse Effect will be true and correct in all respects at and as of the Closing
with the same force and effect as if made as of the Closing, in each case, other than representations and warranties that expressly
speak only as of a specific date or time, which will be true and correct as of such specified date or time.
8.2 Performance. The
Buyer will have performed and complied with, in all material respects, all agreements, obligations and covenants contained in this
Agreement that are required to be performed or complied with by the Buyer at or prior to the Closing.
8.3 Compliance
Certificate. The Buyer will have delivered to the Sellers’ Representative a certificate, dated the Closing
Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 8.1, Section 8.2 and Section
8.5 have been satisfied.
8.4 Qualifications. No
provision of any applicable Legal Requirement and no Government Order will prohibit the consummation of any of the Contemplated
Transactions.
8.5 Absence
of Litigation. No Action will be pending or threatened in writing which may result in Governmental Order, nor will
there be any Governmental Order in effect, (a) which would prevent consummation of any of the Contemplated Transactions or
(b) which would result in any of the Contemplated Transactions being rescinded following consummation (and no such Governmental
Order will be in effect).
8.6 Consents,
etc.. All actions by (including any authorization, consent or approval) or in respect of (including notice to),
or filings with, any Governmental Authority or other Person that are required to consummate the Contemplated Transactions, as disclosed
in Schedule 5.3, will have been obtained or made, in a manner reasonably satisfactory in form and substance to the Sellers’
Representative, and no such authorization, consent or approval will have been revoked.
8.7 Proceedings
and Documents. All corporate and other proceedings on the part of the Buyer in connection with the Contemplated
Transactions and all documents incident thereto will be reasonably satisfactory in form and substance to the Sellers’ Representative
and to its counsel, and the Sellers’ Representative will have received all such counterpart original and certified or other
copies of such documents as it may reasonably request.
8.8 Vringo
Securities. The Buyer will have delivered to the Sellers’ Representative separate certificates for each respective
Seller evidencing all of the Vringo Securities as set forth on Exhibit A to which that Seller is entitled.
8.9 Ancillary
Agreements. Each of the Ancillary Agreements required to be delivered to the Sellers will have been executed and
delivered to the Sellers’ Representative by each of the other parties thereto.
9. TERMINATION.
This Agreement may
be terminated (the date on which the Agreement is terminated, the “Termination Date”) at any time prior to the
Closing:
(a) By
either the Buyer or the Sellers’ Representative by providing written notice to the other at any time beginning on or after
October 15, 2015; or
(b) by
either the Buyer or the Sellers’ Representative by providing written notice to the other at any time after October 15, 2015
if the Closing will not have occurred by reason of the failure of any condition set forth in Section 7, in the case of the
Buyer, or Section 8, in the case of the Sellers, to be satisfied (unless such failure is the result of one or more breaches
or violations of, or inaccuracy in any covenant, agreement, representation or warranty of this Agreement by the terminating party);
or
(c) by
either the Buyer or the Sellers’ Representative if a final non-appealable Governmental Order permanently enjoining, restraining
or otherwise prohibiting the Closing will have been issued by a Governmental Authority of competent jurisdiction;
(d) by
the Buyer if either (i) there will be a breach of, or inaccuracy in, any representation or warranty of the Company or of any
of the Sellers contained in this Agreement as of the date of this Agreement or as of any subsequent date (other than representations
or warranties that expressly speak only as of a specific date or time, with respect to which the Buyer’s right to terminate
under this provision will arise only in the event of a breach of, or inaccuracy in, such representation or warranty as of such
specified date or time), or (ii) the Company or a Seller will have breached or violated in any material respect any of their
respective covenants and agreements contained in this Agreement; in each case of (i) or (ii) above, which breach or violation would
give rise, or could reasonably be expected to give rise, to a failure of a condition set forth in Section 7 and cannot be
or has not been cured within five Business Days after the Buyer notifies the Company of such breach or violation; or
(e) by
the Sellers’ Representative if either (i) there will be a breach of, or inaccuracy in, any representation or warranty
of the Buyer contained in this Agreement as of the date of this Agreement or as of any subsequent date (other than representations
or warranties that expressly speak only as of a specific date or time, with respect to which the Sellers’ Representative’s
right to terminate will arise only in the event of a breach of, or inaccuracy in, such representation or warranty as of such specified
date or time), or (ii) the Buyer will have breached or violated in any material respect any of its covenants and agreements
contained in this Agreement; in each case of (i) or (ii) above, which breach or violation would give rise, or could reasonably
be expected to give rise, to a failure of a condition set forth in Section 8 and cannot be or has not been cured within five
Business Days after the Sellers’ Representative notifies the Buyer of such breach or violation.
9.2 Effect
of Termination. In the event of the termination of this Agreement pursuant to Section 9.1, this Agreement –
other than the provisions of Sections 3.26, 4.6 and 5.5 (No Brokers), 6.6 (Exclusivity), 6.9 (Confidentiality), 6.10 (Publicity),
10 (Indemnification), 12.11 (Governing Law) 12.12 (Jurisdiction) and 12.14 (Waiver of Jury Trial), will then be null
and void and have no further force and effect and all other rights and Liabilities of the parties hereunder will terminate without
any Liability of any party to any other party, except for Liabilities arising in respect of breaches under this Agreement by any
party on or prior to the Termination Date.
10. INDEMNIFICATION.
10.1 Indemnification
by the Sellers.
10.1.1 Indemnification
by the Sellers. Each Seller will severally indemnify and hold harmless the Buyer and each of its directors, officers, shareholders,
partners, employees, agents and Affiliates (including, following the Closing, each Acquired Company), and the Representatives and
Affiliates of each of the foregoing Persons (each, a “Buyer Indemnified Person”), from, against and in respect
of any and all Actions, Liabilities, Governmental Orders, Encumbrances, losses, damages, bonds, dues, assessments, fines, penalties,
Taxes, fees, costs (including costs of investigation, defense and enforcement of this Agreement), expenses or amounts paid in settlement
(in each case, including reasonable attorneys’ and experts fees and expenses), whether or not involving a Third Party Claim
(collectively, “Losses”), incurred or suffered by the Buyer Indemnified Persons or any of them as a result of,
arising out of or directly or indirectly relating to: (a) any breach of, or inaccuracy in, any representation or warranty made
by the Company or the Sellers or any of them in this Agreement (other than in Section 4), any Ancillary Agreement or in any document,
Schedule, instrument or certificate delivered pursuant to this Agreement (in each case, as such representation or warranty would
read if all qualifications as to materiality, including each reference to the defined term “Material Adverse Effect,”
were deleted therefrom); (b) any fraud of the Company or any breach or violation of any covenant or agreement of the Company in
or pursuant to this Agreement or any Ancillary Agreement to the extent required to be performed or complied with by the Company
at or prior to the Closing; (c) any breach of, or inaccuracy in, any representation or warranty made by such Seller in Section 4,
any Ancillary Agreement or in any document, Schedule, instrument or certificate delivered pursuant to this Agreement (in each case,
as such representation or warranty would read if all qualifications as to materiality, including each reference to the defined
term “Material Adverse Effect,” were deleted therefrom); or (d) any fraud of any of the Sellers or any breach or violation
of any covenant or agreement of such Sellers or any of them (including under this Section 10) in or pursuant to this Agreement
or any Ancillary Agreement. As set forth in Section 2.4.1, it is the intent of the parties that, except as otherwise set forth
in Section 10.6(c) and Section 10.7, the Escrow Fund shall serve as the sole recourse of Buyer for any breaches of any of the representations
and warranties set forth in Section 3 and Section 4 of this Agreement and any recourse to the Escrow Fund shall be (a) pro rata
as to all Sellers for all Losses arising out of any breach of the representations and warranties set forth in Section 3 and (b)
several as to each Seller for all Losses arising out of any breach by a Seller of the representations and warranties set forth
in Section 4.
10.2 Indemnity
by the Buyer. The Buyer will indemnify and hold harmless each Seller and each Seller’s respective Affiliates
(including, prior to the Closing, each Acquired Company), and the Representatives and Affiliates of each of the foregoing Persons
(each, a “Seller Indemnified Person”), from, against and in respect of any and all Losses incurred or suffered
by the Seller Indemnified Persons or any of them as a result of, arising out of or relating to, directly or indirectly: (a) any
breach of, or inaccuracy in, any representation or warranty made by the Buyer in this Agreement any Ancillary Agreement or in any
document, Schedule, instrument or certificate delivered pursuant to this Agreement (in each case, as such representation or warranty
would read if all qualifications as to materiality, including each reference to the defined term “Material Adverse Effect,”
were deleted therefrom); or (b) any breach or violation of any covenant or agreement of the Buyer (including under this Section
10) or any covenant or agreement of the Company to the extent required to be performed or complied with by the Company after the
Closing, in either case in or pursuant to this Agreement or any Ancillary Agreement.
10.3 Time
for Claims. No claim may be made or suit instituted seeking indemnification pursuant to Section 10.1.1 or 10.2 for
any breach of, or inaccuracy in, any representation or warranty unless a written notice describing such breach or inaccuracy in
reasonable detail in light of the circumstances then known to the Indemnified Party, is provided to the Indemnifying Party: (a)
at any time, in the case of any breach of, or inaccuracy in, the representations and warranties set forth in Sections 3.1 (Organization;
Predecessors), 3.2 (Power and Authorization), 3.4 (Breach of Organizational Documents), 3.5 (Capitalization), 3.9 (Debt;
Guarantees), 3.26 (No Brokers), 4.1 (Organization), 4.2 (Power and Authorization), 4.4 (No Breach of Organizational Documents
of Seller), 4.5 (Title), 4.6 (No Brokers), 5.1 (Organization), 5.2 (Power and Authorization), 5.4 (Breach of Organizational Documents),
5.5 (No Brokers) or 5.8 (Capitalization) (or as such representations and warranties are repeated or confirmed in any document,
Schedule, instrument or certificate delivered pursuant to this Agreement), or in the case of any claim or suit based upon fraud
or intentional misrepresentation; (b) at any time prior to the thirtieth day after the expiration of the applicable statute of
limitations (taking into account any tolling periods and other extensions) in the case of any breach of, or inaccuracy in, the
representations and warranties set forth in Sections 3.15 (Tax Matters), 3.16 (Employee Benefit Plans) or 3.17 (Environmental Regulation)
(or as such representations and warranties are repeated or confirmed in any document, Schedule, instrument or certificate delivered
pursuant to this Agreement); (c) at any time prior to the thirty-six month anniversary of the Closing, in the case of any breach
of covenant required to be performed or complied with at or prior to the Closing or breach of, or inaccuracy in, any other representation
and warranty in this Agreement (or as such representations and warranties are repeated or confirmed in any document, Schedule,
instrument or certificate delivered pursuant to this Agreement) and (d) in the case of breaches of covenants hereunder that are
required to be performed after the Closing, at any time prior to the expiration of the time period within which such covenant is
to be performed or observed under the express terms of this Agreement.
Claims for indemnification pursuant to any
other provision of Sections 10.1.1 and 10.2 are not subject to the limitations set forth in this Section 10.3.
10.4 Third
Party Claims.
10.4.1 Notice
of Claim. If any third party will notify an Indemnified Party with respect to any matter (a “Third Party
Claim”) which may give rise to an Indemnified Claim against an Indemnifying Party under this Section 10, then the Indemnified
Party will promptly give written notice to the Indemnifying Party; provided, however, that no delay on the part of
the Indemnified Party in notifying the Indemnifying Party will relieve the Indemnifying Party from any obligation under this Section
10, except to the extent such delay actually and materially prejudices the Indemnifying Party.
10.4.2 Assumption
of Defense, etc. The Indemnifying Party will be entitled to participate in the defense of any Third Party Claim
and will have the right to defend the Indemnified Party against the Third Party Claim so long as (a) the Indemnifying Party gives
written notice to the Indemnified Party within fifteen (15) days after receipt of written notice of the claim pursuant to Section
10.4.1 that it will indemnify the Indemnified Party from and against the entirety of any and all Losses the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (b) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Party, (c) the Indemnified
Party has not been advised by counsel that a conflict exists between the Indemnified Party and the Indemnifying Party in connection
with the defense of the Third Party Claim, (d) the Third Party Claim does not relate to or otherwise arise in connection with Taxes
or any criminal or regulatory enforcement action, (e) settlement of an adverse judgment with respect to, or the Indemnifying Party’s
conduct of, the defense of the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to be adverse
to the Indemnified Party’s reputation or continuing business interests (including its relationships with current or potential
customers, suppliers or other parties material to the conduct of its business) and (f) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently. The Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim; provided, however, that the Indemnifying Party will pay the
fees and expenses of separate co-counsel retained by the Indemnified Party if the Indemnifying Party does not assume control of
the defense of the Third Party Claim within the 15-day period described above in this Section 10.4.1.
10.4.3 Limitations
on Indemnifying Party. The Indemnifying Party will not consent to the entry of any judgment or enter into any compromise
or settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party unless such judgment,
compromise or settlement (a) provides for the payment by the Indemnifying Party of money as sole relief for the claimant, (b) results
in the full and general release of the Buyer Indemnified Persons or Seller Indemnified Persons, as applicable, from all liabilities
arising or relating to, or in connection with, the Third Party Claim and (c) involves no finding or admission of any violation
of Legal Requirements or the rights of any Person and no effect on any other claims that may be made against the Indemnified Party.
10.4.4 Indemnified
Party’s Control. If the Indemnifying Party does not deliver the notice contemplated by clause (a) of Section
10.4.2 within 15 days after the Indemnified Party has given notice of the Third Party Claim, or otherwise at any time fails to
conduct the defense of the Third Party Claim actively and diligently, the Indemnified Party may defend, and may consent to the
entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim in any manner it may deem
appropriate. If such notice is given on a timely basis and the Indemnifying Party conducts the defense of the Third
Party Claim actively and diligently, but any of the other conditions in Section 10.4.2 is or becomes unsatisfied, the Indemnified
Party may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the
Third Party Claim. In the event that the Indemnified Party conducts the defense of the Third Party Claim pursuant to this Section
10.4.4, the Indemnifying Party will (a) advance the Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys’ and experts’ fees and expenses) and (b) remain responsible for
any and all other Losses that the Indemnified Party may incur or suffer resulting from, arising out of, relating to, in the nature
of or caused by the Third Party Claim to the fullest extent provided in this Section 10.
10.5 No
Circular Recovery. Notwithstanding anything to the contrary in this Agreement, each Seller hereby agrees that it
will not make any claim for indemnification against the Buyer, any Buyer Indemnified Person or the Company for any matter with
respect to which such Seller (i) was an executive officer or director of the Company, and (ii) was either negligent
or was acting outside of his authorized authority, or otherwise did not intend to act in the best interests of the Acquired Companies,
and (iii) in such director or officer position was responsible for and in control of the facts or circumstances (with the ability
to modify such facts and circumstances at that time) that form the basis for an indemnification claim by a Buyer Indemnified Person
hereunder.
10.6 Certain
Limitations. The indemnification provided for in Section 10.1.1 and Section 10.2 shall be subject to the following
limitations:
(a) Except
as provided in Section 10.6(c) and Section 10.7, the aggregate amount of all Losses for which the Sellers’ Representative
or the Sellers shall be liable pursuant to Section 10.1.1 shall not exceed the Escrow Fund (the “Cap”). No
Buyer Indemnified Person shall be entitled to recover from the Escrow Fund for Losses pursuant to Section 10.1.1 unless and until
the total amount of all Losses that have been suffered or incurred by one or more of the Buyer Indemnified Persons exceeds $50,000
in the aggregate (the “Deductible”), after which, subject to the terms of this Section 10, Buyer Indemnified
Persons shall be entitled to recover from the Escrow Fund for all Losses pursuant to Section 8.02(a) that exceed the
Deductible.
(b) The
aggregate amount of all Losses for which Buyer shall be liable pursuant to Section 10.2 shall not exceed $2,500,000.
(c) Notwithstanding
the foregoing, the limitations set forth in Section 10.6(a) shall not apply to Losses (i) based upon, arising out of, with respect
to or by reason of any inaccuracy in or breach of any representation or warranty of Sections 3.1 (Organization; Predecessors),
3.2 (Power and Authorization), 3.4 (Breach of Organizational Documents), 3.5 (Capitalization), 3.9 (Debt; Guarantees),
3.15 (Tax Matters), 3.19, (Affiliate Transactions), 3.26 (No Brokers), 4.1 (Organization), 4.2 (Power and Authorization),
4.4 (No Breach of Organizational Documents of Seller), 4.5 (Title), and 4.6 (No Brokers) (collectively, the “Excepted
Representations”), (ii) related to any of the items set forth on Schedule 10.6(c) or (iii) for fraud or willful
misrepresentation or breach of any covenant or agreement, for which the the Sellers’ Representatives and the Sellers shall
be severally liable for an aggregate amount not to exceed $6,600,000. For the avoidance of doubt, none of the limitations set forth
in this Section 10.6(c) shall apply to any claims for indemnification that relate to Taxes.
(d) Notwithstanding
anything to the contrary set forth herein, all indemnification obligations pursuant to this Section 10 will exclude punitive Losses
(except to the extent punitive Losses constitute Losses payable to a third party as a result of a claim by a third party) and damages
(other than direct or incidental damages) that are not the probable and reasonably foreseeable result of the underlying breach,
misrepresentation, inaccuracy, default or event.
10.7 Escrow
Fund. At the Closing, the Escrow Fund shall be delivered to the Escrow Agent to be held and administered by the Escrow Agent
in accordance with the terms of the Escrow Agreement. Buyer may make a claim against the Escrow Fund for the amount of any Losses
by sending a Notice of Claim pursuant to this Agreement or the Escrow Agreement to the Escrow Agent, as applicable. With respect
to claims for any Losses related to (i) the Excepted Representations, (ii) any of the items set forth on Schedule 10.6(c)
or (iii) for fraud or willful misrepresentation, Buyer shall seek payment for any Losses first from the Escrow Fund and then from
the Sellers’ Representative, who shall be personally liable for any such Losses above the Escrow Fund, and Buyer shall not
be entitled to seek payment for the above specified Losses from the Sellers except as it relates to the Escrow Fund.
10.8 Knowledge
and Investigation. The right of any party to indemnification pursuant to this Section 10 will not be affected by
any investigation conducted or knowledge acquired (or capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing, with respect to the accuracy of any representation or warranty, or performance of
or compliance with any covenant or agreement. The waiver of any condition contained in this Agreement or in any Ancillary
Agreement based on the breach of any such representation or warranty, or on the performance of or compliance with any such covenant
or agreement, will not affect the right of any person to indemnification pursuant to this Section 10 based on such representation,
warranty, covenant or agreement. Such representations and warranties and covenants and agreements shall not be affected or deemed
waived by reason of the fact that the indemnified party knew or should have known that any representation or warranty might be
inaccurate or that the indemnifying party failed to comply with any agreement or covenant. Any investigation by such party shall
be for its own protection only and shall not affect or impair any right or remedy hereunder.
10.9 Remedies
Cumulative. The rights of each Buyer Indemnified Person and Seller Indemnified Person under this Section 10 are
cumulative and each Buyer Indemnified Person and Seller Indemnified Person, as the case may be, will have the right in any particular
circumstance, in its sole discretion, to enforce any provision of this Section 10 without regard to the availability of a remedy
under any other provision of this Section 10.
10.9.1 Definition
of Loss and Losses Not to Include Matters Related to JVIS or to the Automotive-Related Business of any Acquired Company. Notwithstanding
any other provision of this Agreement, as used in this Agreement, the term “Loss” or “Losses” will not
include any Actions, Liabilities, Governmental Orders, Encumbrances, losses, damages, bonds, dues, assessments, fines, penalties,
Taxes, fees, costs (including costs of investigation, defense and enforcement of this Agreement), expenses or amounts paid in settlement
(in each case, including reasonable attorneys’ and experts’ fees and expenses), whether or not involving a Third Party
Claim, relating to any dispute or litigation involving JVIS (USA) Ltd., Jason Murar, Mitch Randall, Zii Energy, Gregory Clark.
11. TAX
MATTERS
11.1 Cooperation
on Tax Matters. Buyer and the Acquired Companies will cooperate fully, as and to the extent reasonably requested
by the other party, in connection with any Tax matters relating to the Acquired Companies (including by the provision of reasonably
relevant records or information). The party requesting such cooperation will pay the reasonable out-of-pocket expenses
of the other party.
11.2 Straddle
Period. In the case of any Straddle Period, the amount of Taxes allocable to the portion of the Straddle Period
ending on the Closing Date shall be deemed to be: (1) In the case of Taxes imposed on a periodic basis (such as real or personal
property Taxes), the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis,
the amount of such Taxes for the immediately preceding period) multiplied by a fraction, the numerator of which is the number of
calendar days in the Straddle Period ending on and including the Closing Date and the denominator of which is the number of calendar
days in the entire relevant Straddle Period; and (2) In the case of Taxes not described in (1) above (such as franchise Taxes,
Taxes that are based upon or related to income or receipts, based upon occupancy or imposed in connection with any sale or other
transfer or assignment of property (real or personal, tangible or intangible)), the amount of any such Taxes shall be determined
as if such taxable period ended as of the close of business on the Closing Date.
11.3 Transfer
Taxes. Sellers shall be responsible for the timely payment of, and to such extent shall indemnify and hold harmless
the Buyer against, all sales (including without limitation, bulk sales), use, value added, documentary, stamp, gross receipts,
registration, transfer, conveyance, excise, recording, license, stock transfer stamps and other similar Taxes (in no event including
Taxes computed on the basis of income) and fees (“Transfer Taxes”) arising out of or in connection with or attributable
to the transactions effected pursuant to this Agreement. Sellers shall prepare and timely file all Tax Returns required
to be filed in respect of Transfer Taxes (including, without limitation, all notices required to be given with respect to bulk
sales taxes), provided that Buyer shall prepare any such Tax Returns that are the primary responsibility of Buyer under
applicable laws. Buyer’s preparation of any such Tax Returns shall be subject to Seller’s approval, which
approval shall not be unreasonably withheld.
12. MISCELLANEOUS
12.1 Notices. All
notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided
under this Agreement must be in writing and must be delivered, given or otherwise provided: (a) by hand (in which case, it will
be effective upon delivery); (b) by facsimile (in which case, it will be effective upon receipt of confirmation of good transmission
by the intended recipient; provided, that such communication is also sent by some other means permitted by this Section 12.1);
(c) by overnight delivery by a nationally recognized courier service (in which case, it will be effective on the Business Day after
being deposited with such courier service); or (d) by e-mail (in which case it will be effective on the date sent if sent during
normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient, and
followed by a transmission pursuant to another method of delivery permitted by this Section 12.1) in each case, to the address
(or facsimile number) listed below:
If to the Company, to it at:
International Development Group Limited
5590 W. Chandler Blvd., #3
Chandler, AZ 85226
Telephone number: (303) 475-4940
Facsimile number:
Attention: Randall P. Marx
Email: rmarx@groupmobile.com
with a copy to:
Fleming PLLC
49 Front Street, Suite 206
Rockville Centre, New York 11570
Telephone number: 516-833-5034
Facsimile number: 516-977-1209
Attention: Stephen M. Fleming, Esq.
Email: smf@flemingpllc.com
If to Buyer, to:
c/o Vringo, Inc.
780 Third Avenue, 15th Floor
New York, NY 10017
Telephone number: (646) 532-6778
Facsimile number: (646) 532-6775
Attention: Andrew Perlman
Email: APerlman@vringoinc.com
with a copy to:
Mintz Levin Cohn Ferris Glovsky and Popeo PC
666 Third Avenue
New York, New York 10017
Facsimile number: (212) 983-3115
Attention: Kenneth R. Koch, Esq.
If to Sellers’ Representative, to:
Randall P. Marx
1207 St. Andrews
Edmond, OK 73025
Telephone number: (405) 348-0688
Facsimile number: (405) 348-8101
Email: rmarx@groupmobile.com
Each of the parties
to this Agreement may specify different address or facsimile number by giving notice in accordance with this Section 12.1 to each
of the other parties hereto.
12.2 Succession
and Assignment; No Third-Party Beneficiary. Subject to the immediately following sentence, this Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, each of which
such successors and permitted assigns will be deemed to be a party hereto for all purposes hereof. No party may assign,
delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior
written approval of the other parties; provided, however, that the Buyer may (a) assign any or all of its rights
and interests hereunder to one or more of its Affiliates and (b) designate one or more of its Affiliates to perform its obligations
hereunder, in each case, so long as Buyer is not relieved of any Liability hereunder. Except as expressly provided herein,
this Agreement is for the sole benefit of the parties and their permitted successors and assignees and nothing herein expressed
or implied will give or be construed to give any Person, other than the parties and such successors and assignees, any legal or
equitable rights hereunder. Notwithstanding the foregoing, the Buyer Indemnified Persons and the Seller Indemnified Persons shall
be considered third party beneficiaries of this Agreement with respect to Section 10 hereof.
12.3 Amendments
and Waivers. No amendment or waiver of any provision of this Agreement will be valid and binding unless it is in
writing and signed, in the case of an amendment, by Buyer, the Company and the Sellers’ Representative, or in the case of
a waiver, by the party (in the case of the Sellers, by the Sellers’ Representative) against whom the waiver is to be effective. No
waiver by any party of any breach or violation or, default under or inaccuracy in any representation, warranty or covenant hereunder,
whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation, default of, or inaccuracy in,
any such representation, warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent
such occurrence. No delay or omission on the part of any party in exercising any right, power or remedy under this Agreement
will operate as a waiver thereof.
12.4 Provisions
Concerning Sellers’ Representative.
12.4.1 Appointment. Each
Seller hereby appoints Randall P. Marx as the Sellers’ Representative, to serve, in the manner and to the extent described
herein, as agent and proxy for such Seller for all purposes under this Agreement. Without limiting the generality
of the foregoing, the Sellers’ Representative will be authorized to: (a) in connection with the Closing, execute and receive
all documents, instruments, certificates, statements and agreements on behalf of and in the name of the Sellers necessary to effectuate
the Closing and consummate the Contemplated Transactions; (b) take all actions on behalf of the Sellers with respect to the matters
set forth in Section 10; (c) take all actions on behalf of the Sellers in connection with any claims made under Section 10 to defend
or settle such claims, and to make payments in respect of such claims; (d) execute and deliver, should it elect to do so in its
sole discretion, on behalf of the Sellers, any amendment to this Agreement or the Escrow Agrement so long as such amendment will
apply equally to all Sellers and (e) take all other actions to be taken by or on behalf of the Sellers and exercise any and all
rights which the Sellers are permitted or required to do or exercise under this Agreement or the Escrow Agreement. All decisions
of the Sellers' Representative shall be final and binding on all of the Sellers, and no Seller shall have the right to object,
dissent, protest or otherwise contest the same. The Buyer shall be entitled to rely upon, without independent investigation,
any act, notice, instruction or communication from the Sellers' Representative and any document executed by the Sellers' Representative
on behalf of any such Sellers and shall be fully protected in connection with any action or inaction taken or omitted to be taken
in reliance thereon absent willful misconduct.
12.4.2 Liability. The
Sellers’ Representative will not be liable to any Seller for any action taken by it in good faith pursuant to this Agreement
or the Escrow Agrement. Michael Solomon and Keith Goodman, jointly and severally, agree to indemnify and hold harmless
the Sellers’ Representative for any liability incurred by the Sellers’ Representative for any losses or damages, including
reasonable attorneys’ fees, incurred by the Sellers’ Representative for any action taken by it in good faith pursuant
to this Agreement or the Escrow Agreement. The execution of this Agreement by each of Michael Solomon and Keith Goodman,
respectively, as Sellers, constitutes their agreement to the indemnification and other provisions of this Section 12.4.2. The
Sellers’ Representative is serving as Sellers’ Representative solely for purposes of administrative convenience, and
is not personally liable in such capacity for any of the obligations of the Sellers or for any other obligations hereunder, and
the Buyer agrees that it will not look to the personal assets of the Sellers’ Representative, acting in such capacity, for
the satisfaction of any obligations to be performed by the Sellers hereunder.
12.5 Entire
Agreement. This Agreement, together with the other Ancillary Agreements and any documents, instruments and certificates
explicitly referred to herein, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof
and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written
or oral, with respect thereto.
12.6 Schedules;
Listed Documents, etc.. Neither the listing nor description of any item, matter or document in any Schedule hereto
nor the furnishing or availability for review of any document will be construed to modify, qualify or disclose an exception to
any representation or warranty of any party made herein or in connection herewith, except to the extent that the applicability
of such disclosure to such representation or warranty is reasonably apparent on the face of such disclosure.
12.7 Counterparts. This
Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will
constitute but one and the same instrument. This Agreement will become effective when duly executed by each party hereto.
12.8 Severability. Any
term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction. In the event that any provision hereof would, under applicable
law, be invalid or unenforceable in any respect, each party hereto intends that such provision will be construed by modifying or
limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.
12.9 Headings. The
headings contained in this Agreement are for convenience purposes only and will not in any way affect the meaning or interpretation
hereof.
12.10 Construction. The
parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or
burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The
parties intend that each representation, warranty and covenant contained herein will have independent significance. If
any party has breached or violated, or if there is an inaccuracy in, any representation, warranty or covenant contained herein
in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless
of the relative levels of specificity) which the party has not breached or violated, or in respect of which there is not an inaccuracy,
will not detract from or mitigate the fact that the party has breached or violated, or there is an inaccuracy in, the first representation,
warranty or covenant.
12.11 Governing
Law. This Agreement, the negotiation, terms and performance of this Agreement, the rights of the parties under this
Agreement, and all Actions arising in whole or in part under or in connection with this Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of New York, without giving effect to any choice or conflict of law
provision or rule that would cause the application of the laws of any other jurisdiction.
12.12 Jurisdiction;
Venue; Service of Process.
12.12.1 Jurisdiction. Except
as otherwise expressly provided in this Agreement, each party to this Agreement, by its, his or her execution hereof, (a) hereby
irrevocably submits to the exclusive jurisdiction and venue of the state courts of the State of New York or the United States District
Court located in the Southern District of New York for the purpose of any Action between any of the parties hereto arising in whole
or in part under or in connection with this Agreement, any Ancillary Agreement, the Contemplated Transactions or the negotiation,
terms or performance hereof or thereof, (b) hereby waives to the extent not prohibited by applicable Legal Requirements, and agrees
not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it, he or she is not subject personally
to the jurisdiction of the above-named courts, that venue in any such court is improper, that its, his or her property is exempt
or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds
of forum non conveniens or improper venue, that such Action should be transferred or removed to any court other than one
of the above-named courts, that such Action should be stayed by reason of the pendency of some other Action in any other court
other than one of the above-named courts or that this Agreement or the subject matter hereof may not be enforced in or by such
court and (c) hereby agrees not to commence or prosecute any such Action other than before one of the above-named courts. Notwithstanding
the previous sentence, a party hereto may commence any Action in a court other than the above-named courts solely for the purpose
of enforcing an order or judgment issued by one of the above-named courts.
12.12.2 Service
of Process. Each party hereto hereby (a) consents to service of process in any Action between any of the parties
hereto arising in whole or in part under or in connection with this Agreement, any Ancillary Agreement, the Contemplated Transactions
or the negotiation, terms or performance hereof or thereof, in any manner permitted by Delaware law, (b) agrees that service of
process made in accordance with clause (a) or made by overnight delivery by a nationally recognized courier service at its, his
or her address specified pursuant to Section 12.1 will constitute good and valid service of process in any such Action and (c)
waives and agrees not to assert (by way of motion, as a defense or otherwise) in any such Action any claim that service of process
made in accordance with clause (a) or (b) does not constitute good and valid service of process.
12.13 Specific
Performance. Each of the parties hereto acknowledges and agrees that the other parties hereto would be damaged irreparably
in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are
breached or violated. Accordingly, each of the parties hereto agrees that, without posting bond or other undertaking,
the other parties hereto shall be entitled to an injunction or injunctions to prevent breaches or violations of the provisions
of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any Action instituted in any
court specified in Section 12.12.1 in addition to any other remedy to which it, he or she may be entitled, at law or in equity. Each
party hereto further agrees that, in the event of any action for an injunction or specific performance in respect of any such threatened
or actual breach or violation, it, he or she shall not assert that a remedy at law would be adequate.
12.14 Waiver
of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HERETO HEREBY WAIVE,
AND COVENANT THAT THEY SHALL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION
ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, any Ancillary Agreement,
the Contemplated Transactions or the negotiation, terms or performance hereof or thereof, WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES HERETO AGREE THAT ANY OF THEM MAY FILE A COPY
OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES HERETO
IRREVOCABLY TO WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY PROCEEDING SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE SITTING WITHOUT A JURY.
12.15 Representation
by Counsel. Each party hereto acknowledges that it has been advised by legal and any other counsel retained by such
party in its sole discretion. Each party acknowledges that such party has had a full opportunity to review this Agreement
and all related exhibits, schedules and ancillary agreements and to negotiate any and all such documents in its sole discretion,
without any undue influence by any other party hereto or any third party.
[signature page follows]
IN WITNESS WHEREOF,
each of the undersigned has executed this Agreement as of the date first above written.
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Exhibit 10.2
AMENDMENT NO. 2 TO
EMPLOYMENT AGREEMENT
This Amendment No. 2 to Employment Agreement
(the “Amendment”), dated as of October 13, 2015, is entered into by and between Vringo, Inc., a Delaware corporation
(the “Company”), and Andrew D. Perlman (the “Executive”), for purposes of amending the terms
of that certain Employment Agreement dated February 13, 2013, as amended on August 20, 2015 (the “Agreement”).
WHEREAS, the Company and Executive
desire to extend the expiration date of the Agreement and amend the bonus and incentive compensation provision by amending certain
terms of the Agreement as set forth in this Amendment.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties amend the Agreement and agree as follows:
1. All capitalized terms not defined herein shall have
the same meaning ascribed to them in the Agreement.
2. The following shall replace the first sentence of
Section 2 of the Agreement:
“The Company hereby agrees to employ Executive,
and Executive hereby accepts employment with the Company, upon the terms set forth in this Agreement, for the period commencing
on the Effective Date and ending on December 31, 2017, unless sooner terminated in accordance with the provisions of Section 9
below (such period is the "Employment Period").”
3. The following
shall be added as the second sentence of Section 5 of the Agreement:
“On or before March 15, 2016, the Compensation
Committee shall establish a bonus plan for the Executive to be eligible to receive an annual performance bonus (the “Annual
Bonus”) for fiscal year 2015 and future years, based on Executive’s achievement of individual and/or corporate goals
to be negotiated in good faith and agreed to in writing by Executive and the Compensation Committee. The amount, if any, of the
Annual Bonus shall be determined by the Compensation Committee in its sole discretion based upon achievement of the goals, and
shall be paid to Executive following the close of the fiscal year to which it relates, and in no event later than March 15th of
the calendar year immediately following the calendar year in which it was earned. Executive must be employed by Company on
the date of payment in order to be eligible for, and to be deemed as having earned, such Annual Bonus.”
4. Executive acknowledges that this Amendment,
the execution thereof, and any communications or negotiations between Executive and the Company related to this Amendment or otherwise,
do not constitute a Good Reason termination (as defined in the Agreement) under the Agreement.
5. This Amendment shall be governed by and construed
in accordance with the domestic laws of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
6. This Amendment may be executed in
one or more counterparts, any one of which may be by facsimile, and all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have
executed this Amendment as of the date first above written.
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/s/ John Engelman |
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John Engelman |
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Chair of the Compensation Committee of the Board of Directors |
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/s/ Andrew D. Perlman |
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Andrew D. Perlman |
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Exhibit 10.3
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
This Amendment No. 1 to Employment Agreement
(the “Amendment”), dated as of October 13, 2015, is entered into by and between Vringo, Inc., a Delaware corporation
(the “Company”), and Anastasia Nyrkovskaya (the “Employee”), for purposes of amending the
terms of that certain Employment Agreement dated December 19, 2014 (the “Agreement”).
WHEREAS, the Company and Employee
desire to extend the expiration of the Agreement and the Company desires to increase the salary and amend the bonus and incentive
compensation provision by amending certain terms of the Agreement as set forth in this Amendment.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties amend the Agreement and agree as follows:
1. All capitalized terms not defined herein shall have
the same meaning ascribed to them in the Agreement.
2. The following shall replace and amend and restate
in its entirety Section 1(c) of the Agreement:
“The Company hereby agrees to employ Employee
and Employee hereby accepts employment with the Company, upon the terms set forth in this Agreement, for the period commencing
on the Effective Date and ending December 31, 2017, unless sooner terminated in accordance with the provisions of Section 7 below
(the “Employment Term”). At the end of the Employment Term this Agreement shall terminate except as otherwise provided
herein.”
3. The following shall replace the first
sentence of Section 3 of the Agreement:
“For all services to be rendered by Employee
pursuant to this Agreement, the Company agrees to pay Employee during the term of this Agreement an annual base salary, less applicable
taxes, including income tax, FICA and FUTA, and other appropriate deductions (the "Base Salary") at an annual
rate of three hundred twenty-five thousand dollars ($325,000).”
4 The following
shall replace the first two sentences of Section 4 of the Agreement:
“On or before March 15, 2016, the Compensation
Committee shall establish a bonus plan for the Employee to be eligible to receive an annual performance bonus (the “Annual
Bonus”) for fiscal year 2015 and future years, based on Employee’s achievement of individual and/or corporate goals
to be determined by the Compensation Committee in consultation with the Chief Executive Officer. The amount, if any, of the Annual
Bonus shall be determined by the Compensation Committee in its sole discretion based upon achievement of the goals, and shall be
paid to Employee following the close of the fiscal year to which it relates, and in no event later than March 15th of the calendar
year immediately following the calendar year in which it was earned. Employee must be employed by Company on the date of payment
in order to be eligible for, and to be deemed as having earned, such Annual Bonus.”
5. Employee acknowledges that this Amendment,
the execution thereof, and any communications or negotiations between Employee and the Company related to this Amendment or otherwise,
do not constitute a Good Reason termination (as defined in the Agreement) under the Agreement.
6. This Amendment shall be governed by and construed
in accordance with the domestic laws of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
7. This Amendment may be executed in
one or more counterparts, any one of which may be by facsimile, and all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have
executed this Amendment as of the date first above written.
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VRINGO, INC. |
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/s/ John Engelman |
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Name: |
John Engelman |
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Title: |
Chair of the Compensation Committee of the Board of Directors |
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/s/ Anastasia Nyrkovskaya |
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Anastasia Nyrkovskaya |
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Exhibit 10.4
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
This Amendment No. 1 to Employment Agreement
(the “Amendment”), dated as of October 13, 2015, is entered into by and between Vringo, Inc., a Delaware corporation
(the “Company”), and David L. Cohen (the “Employee”), for purposes of amending the terms
of that certain Employment Agreement dated May 7, 2013 (the “Agreement”).
WHEREAS, the Company and Employee
desire to extend the expiration of the Agreement and the Company desires to increase the salary and amend the bonus and incentive
compensation provision by amending certain terms of the Agreement as set forth in this Amendment.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties amend the Agreement and agree as follows:
1. All capitalized terms not defined herein shall have
the same meaning ascribed to them in the Agreement.
2. The following shall replace and amend and restate
in its entirety Section 1(c) of the Agreement:
“The Company hereby agrees to employ Employee
and Employee hereby accepts employment with the Company, upon the terms set forth in this Agreement, for the period commencing
on the Effective Date and ending December 31, 2017, unless sooner terminated in accordance with the provisions of Section 7 below
(the “Employment Term”). At the end of the Employment Term this Agreement shall terminate except as otherwise provided
herein.”
3. The following shall replace the first
sentence of Section 3 of the Agreement:
“For all services to be rendered by Employee
pursuant to this Agreement, the Company agrees to pay Employee during the term of this Agreement an annual base salary, less applicable
taxes, including income tax, FICA and FUTA, and other appropriate deductions (the "Base Salary") at an annual
rate of three hundred twenty-five thousand dollars ($325,000).”
4 The following
shall replace the first two sentences of Section 4 of the Agreement:
“On or before March 15, 2016, the Compensation
Committee shall establish a bonus plan for the Employee to be eligible to receive an annual performance bonus (the “Annual
Bonus”) for fiscal year 2015 and future years, based on Employee’s achievement of individual and/or corporate goals
to be determined by the Compensation Committee in consultation with the Chief Executive Officer. The amount, if any, of the Annual
Bonus shall be determined by the Compensation Committee in its sole discretion based upon achievement of the goals, and shall be
paid to Employee following the close of the fiscal year to which it relates, and in no event later than March 15th of the calendar
year immediately following the calendar year in which it was earned. Employee must be employed by Company on the date of payment
in order to be eligible for, and to be deemed as having earned, such Annual Bonus.”
5. Employee acknowledges that this Amendment,
the execution thereof, and any communications or negotiations between Employee and the Company related to this Amendment or otherwise,
do not constitute a Good Reason termination (as defined in the Agreement) under the Agreement.
6. This Amendment shall be governed by and construed
in accordance with the domestic laws of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
7. This Amendment may be executed in
one or more counterparts, any one of which may be by facsimile, and all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have
executed this Amendment as of the date first above written.
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VRINGO, INC. |
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By: |
/s/ John Engelman |
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Name: |
John Engelman |
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Title: |
Chair of the Compensation Committee of the Board of Directors |
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/s/ David L.
Cohen |
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David L. Cohen |
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Exhibit 99.1
VRINGO ACQUIRES WIRE-FREE CHARGING AND
RUGGED COMPUTING COMPANY INTERNATIONAL DEVELOPMENT GROUP
Conference Call Scheduled today at 8:30
a.m. Eastern Time
NEW YORK —
October 16, 2015 — Vringo, Inc. (NASDAQ: VRNG), a company engaged in the innovation,
development and monetization of intellectual property, today announced that it has entered into a
definitive agreement to acquire privately held International Development Group (IDG), a holding company consisting of two primary
businesses: fliCharge, a wire-free charging technology company, and Group Mobile, a market leading built-to-order supplier of rugged
computers, mobile devices and accessories.
Founded in
2014, fliCharge owns a patented, conductive, wire-free charging technology that is already on the market and available to consumers.
The patented fliCharge technology consists of a wire-free charging solution that can simultaneously charge multiple battery operated
devices on the same charging pad regardless of their power requirement or position on the pad; users simply place their enabled
device onto a fliCharge pad. fliCharge is currently commercializing, partnering or developing products in numerous markets
including automotive, education, office, healthcare, power tools and vaporizers.
Founded in 2002, Group
Mobile is a market-leading supplier of built-to-order rugged computers, mobile devices and accessories. Group Mobile provides a
high touch sales experience with full service technical and customer support in the rugged mobile computer market. Group Mobile’s
customers include large corporations, military suppliers, small businesses and individuals. Rugged products sold by Group Mobile
can be found in military helicopters, police cruisers and ambulance fleets as well as on construction sites, oil rigs and manufacturing
facilities.
The aggregate consideration
will be unregistered shares of Vringo preferred stock convertible into shares of common stock representing approximately 11.4 percent
of the combined company on a fully diluted basis, including contingent consideration.
"I am excited to announce the acquisition
of IDG. We believe that the combination with Vringo provides IDG with the necessary resources to accelerate
growth by increasing market awareness and brand identity stemming directly from the development, manufacturing, distribution, licensing
and sales of innovative products and technologies,” said Andrew D. Perlman, Chief Executive Officer of Vringo.
“Our existing patent
licensing and litigation strategy remains intact and on track. We believe this acquisition offers diversification to our shareholders
and additional licensing opportunities,” Mr. Perlman concluded.
“This transaction presents a fantastic
opportunity as we move towards the next chapter in our company,” said Randy Marx, the Chief Executive Officer of IDG. “I
speak on behalf of myself, IDG’s largest shareholder, as well as our employees and shareholders in saying that we are all
excited about our partnership with Vringo.”
Vringo has
released a presentation that provides an overview of the acquisition. The presentation is available on the homepage of Vringo’s
website or at http://bit.ly/1NK6CgW.
Conference
Call
Vringo
will host a conference call to discuss its proposed acquisition today at 8:30 a.m. Eastern Time. Members of Vringo's management
team including Andrew D. Perlman, Chief Executive Officer; David L. Cohen, Chief Legal and
Intellectual Property Officer; Anastasia Nyrkovskaya, Chief Financial Officer; and Clifford J. Weinstein, Executive Vice President
will participate as well as members of IDG including Randy Marx, Chief Executive Officer; Kevin Hibbard, Vice President of Product
Development of fliCharge; and Stephanie Kreitner, Executive Vice President of Group Mobile.
Join the Conference Call via Webcast
| 1. | Visit http://bit.ly/1METd8n before the start time to join the web portion of this event. |
| 2. | Enter your First Name, Last Name, Company, and Email Address and select "Submit". |
| 3. | Select the "Launch Webcast" icon to view the event. |
Join the Conference Call via Assisted
Dial-In
To access the conference call by telephone,
interested parties should dial (888) 390-3967 (U.S. and Canada) or (862) 255-5351 (international) and reference Vringo.
Replay
An audio webcast of the conference call
will be available within the "Presentations" section of Vringo's investor relations website shortly after the end of
the conference call.
About Vringo, Inc.
Vringo, Inc. is engaged in the innovation,
development and monetization of intellectual property and mobile technologies. Vringo's intellectual property portfolio consists
of over 600 patents and patent applications covering telecom infrastructure, internet search, and mobile technologies. The
patents and patent applications have been developed internally, and acquired from third parties. For more information, visit:
www.vringo.com.
Forward-Looking Statements
This press release includes forward-looking
statements, which may be identified by words such as "believes," "expects," "anticipates," "estimates,"
"projects," "intends," "should," "seeks," "future," "continue," or
the negative of such terms, or other comparable terminology. Forward-looking statements are statements that are not historical
facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ
materially from the forward-looking statements contained herein. Factors that could cause actual results to differ materially
include, but are not limited to: our inability to license and monetize our patents, including the outcome of the litigation against
ZTE and other companies; our inability to recognize the anticipated benefits of the acquisition of IDG, which may be affected by,
among other things, competition, our ability to secure advantageous licensing and sales agreements, market acceptance of IDG’s
technology, potential technology obsolescence, protection of intellectual property rights and potential liability risks that are
inherent in the marketing and sale of products used by consumers; our inability to monetize and recoup our investment with respect
to patent assets that we acquire; our inability to develop and introduce new products and/or develop new intellectual property;
our inability to protect our intellectual property rights; new legislation, regulations or court rulings related to enforcing patents,
that could harm our business and operating results; unexpected trends in the mobile phone and telecom infrastructure industries;
our inability to raise additional capital to fund our combined operations and business plan; our inability to maintain the listing
of our securities on a major securities exchange; the potential lack of market acceptance of our products; potential competition
from other providers and products; our inability to retain key members of our management team; the future success of Infomedia
and our ability to receive value from its stock; our ability to continue as a going concern; our liquidity and other risks and
uncertainties and other factors discussed from time to time in our filings with the Securities and Exchange Commission ("SEC"),
including our annual report on Form 10-K filed with the SEC on March 16, 2015. Vringo expressly disclaims any obligation
to publicly update any forward-looking statements contained herein, whether as a result of new information, future events or otherwise,
except as required by law.
Contacts:
Investors and Media:
Cliff Weinstein
Executive Vice President
Vringo, Inc.
646-532-6777
cweinstein@vringoinc.com
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