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Exhibit 10.1
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of April 15, 1997 (the "Agreement"),
between the undersigned holders (the "Holders") of shares of the common stock,
$.01 par value (the "Company Common Stock"), of MultiLink, Inc., a Massachusetts
corporation (the "Company"), and PictureTel Corporation, a Delaware corporation
("Parent").
RECITALS
The Company, Parent and ML Acquisition Corp., a Massachusetts
corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), propose to
enter into an Agreement and Plan of Merger dated the date hereof (the "Merger
Agreement"; capitalized terms not otherwise defined herein being used herein as
therein defined), pursuant to which Merger Sub would be merged (the "Merger")
with and into the Company, and each outstanding share of Company Common Stock
would be converted into the right to receive shares ("Parent Shares") of Parent
Common Stock; and
As a condition of its entering into the Merger Agreement, Parent has
requested each Holder to agree, and each Holder has agreed, to enter into this
Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. Representations and Warranties of the Holders. Each Holder
represents and warrants, severally and not jointly, to Parent as follows:
(a) Ownership of Securities. Each Holder is the record and beneficial
owner of the number of shares of Company Common Stock (the "Existing
Securities") (together with any shares of Company Common Stock or other
securities of the Company hereafter acquired by the Holder, the "Subject
Securities") set forth on Schedule I to this Agreement. Such Holder does not own
any securities of the Company on the date hereof other than the Existing
Securities and options, if any, to purchase shares of Common Stock as set forth
on Schedule I. The Holder has sole voting power and sole power to issue
instructions with respect to the voting of the Existing Securities, sole power
of disposition, sole power of exercise or conversion and the sole power to
demand appraisal rights, in each case with respect to all of the Existing
Securities and, on the date of the Special Meeting, will have sole voting power
and sole power to issue
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instructions with respect to the voting of all of such Holder's Subject
Securities, sole power of disposition, sole power of exercise or conversion and
the sole power to demand appraisal rights, in each case with respect to all of
such Holder's Subject Securities.
(b) Power; Binding Agreement. Each Holder has full power and
authority to enter into and perform all of such Holder's obligations under this
Agreement. This Agreement has been duly and validly executed and delivered by
such Holder and constitutes a valid and binding agreement of such Holder,
enforceable against such Holder in accordance with its terms, except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(c) No Conflicts. No filing by the Holder with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary to be obtained by the Holder for the execution of this
Agreement by such Holder and the consummation by such Holder of the transactions
contemplated hereby. Neither the execution and delivery of this Agreement by
such Holder nor the consummation by such Holder of the transactions contemplated
hereby nor compliance by such Holder with any of the provisions hereof shall
conflict with or result in any breach of any applicable corporate, partnership
or other organizational documents applicable to such Holder, result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third-party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which such Holder is a party or by which such
Holder's properties or assets may be bound or violate any order, writ,
injunction, decree, judgment, order, statute, rule or regulation applicable to
such Holder or any of such Holder's properties or assets.
(d) No Liens. The Existing Securities are now and, at all times
during the term hereof, the Subject Securities will be held by such Holder, or
by a nominee or custodian for the benefit of such Holder, free and clear of all
Liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever, except for
any encumbrances arising hereunder.
2. Agreement to Vote Shares. At every meeting of the stockholders of
the Company called with respect to any of the following, and at every
adjournment thereof, and on every action or approval by written consent of the
stockholders of the Company with respect to any of the following, each Holder,
severally and not jointly, agrees that it shall vote all the Subject Securities
that it beneficially owns on the record date of any such vote: (i) in favor of
the Merger, the execution and delivery of the Merger Agreement and the approval
of the terms thereof and each of the other transactions contemplated by the
Merger Agreement and (ii) against
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the following actions (other than the Merger and the transactions contemplated
by the Merger Agreement): (1) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or its
subsidiaries; (2) a sale, lease or transfer of a material amount of assets of
the Company or its subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of the Company or its subsidiaries; (3) (a) any
change in the majority of the board of directors of the Company; (b) any
material change in the present capitalization of the Company or any amendment of
the Company's Certificate of Incorporation; (c) any other material change in the
Company's corporate structure or business; or (d) any other action; which, in
the case of each of the matters referred to in clauses (a), (b), (c) or (d)
above, is intended, or could reasonably be expected, to impede, interfere with,
delay, postpone, discourage or materially adversely affect the contemplated
economic benefits to Parent of the Merger or the transactions contemplated by
the Merger Agreement or this Agreement. Notwithstanding anything herein to the
contrary, the foregoing provision of this Section 2 and the proxy granted
pursuant to Section 3 hereof, shall not be applicable in the event the Merger
Agreement is terminated pursuant to the provisions contained therein, and
immediately upon any such termination of the Merger Agreement, this Agreement
shall terminate and be of no further force and effect.
3. IRREVOCABLE PROXY. EACH STOCKHOLDER HEREBY, SEVERALLY AND NOT
JOINTLY, GRANTS TO, AND APPOINTS PARENT AND THE PRESIDENT OF PARENT AND THE
TREASURER OF PARENT, IN THEIR RESPECTIVE CAPACITIES AS OFFICERS OF PARENT, AND
ANY INDIVIDUAL WHO SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF PARENT, AND ANY
OTHER DESIGNEE OF PARENT, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S PROXY
AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE OR ACT BY WRITTEN
CONSENT WITH RESPECT TO SUCH STOCKHOLDER'S SUBJECT SECURITIES IN ACCORDANCE WITH
SECTION 2 HEREOF. THIS PROXY IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE, AND EACH STOCKHOLDER WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH
OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND
HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY IT WITH RESPECT TO THE SUBJECT
SECURITIES.
4. Covenants of the Holders. Each Holder, severally and not jointly,
hereby agrees and covenants that:
(a) No Solicitation. Such Holder shall not, directly or indirectly,
solicit (including by way of furnishing information) or respond to any inquiries
or the making of any proposal by any person or entity (other than Parent or any
Affiliate of Parent) with respect to the Company that constitutes or could
reasonably be expected to lead to an Alternative Transaction. Such Holder will
notify Parent immediately upon becoming aware that any Person has made any
proposal, offer, inquiry, or contact with respect to any Alternative
Transaction, which notice shall include the identities of all relevant parties
and the content of such communication.
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Such Holder will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. Notwithstanding the foregoing provisions
of this Section 4(a), such Holder may hold or continue discussions with the
Company with respect to an investment in a private placement of up to $10
million of subordinated debt or equity by the Company (which is an alternative
in the event the Merger is not consummated), provided that such Holder shall not
enter into any understanding, commitment or transaction with respect thereto
unless the Merger Agreement is terminated in accordance with Section 11.1
thereof.
(b) Restriction on Transfer, Proxies and Noninterference. Such Holder
shall not, directly or indirectly: (i) except pursuant to the terms of the
Merger Agreement, offer for sale, sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other disposition of,
any or all of such Holder's Subject Securities; (ii) except as contemplated
hereby, grant any proxies or powers of attorney, deposit any such Subject
Securities into a voting trust or enter into a voting agreement with respect to
any of such Holder's Subject Securities; or (iii) take any action that would
make any representation or warranty contained herein untrue or incorrect or have
the effect of preventing or disabling such Holder from performing its
obligations under this Agreement.
(c) Tax Representations. Each Holder covenants that, on or
immediately prior to the Effective Date, it will execute and deliver to each of
Parent and the Company a letter in substantially the form of Exhibit A attached
hereto. Each Holder acknowledges that the representations made in such letter
may be relied upon by counsel in opining that the Merger constitutes a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended.
5. Fiduciary Duties. Notwithstanding anything in this Agreement to
the contrary, the covenants and agreements set forth herein shall not prevent
any of the Holders or Holders' designees serving on the Company's Board of
Directors from taking any action required by applicable fiduciary duties (which,
if contrary to any covenant or agreement set forth herein, shall be confirmed by
written opinion of counsel) while acting in Holder's or designee's capacity as a
director of the Company.
6. Indemnification.
(a) Agreement to Indemnify. Each Holder (each in its capacity as
indemnifying party, an "Indemnifying Party") severally and not jointly and
severally agrees to indemnify and hold harmless each of the Buying Parties and
their respective Affiliates (each in its capacity as indemnified party, an
"Indemnitee") from, against and in respect of any and all Losses arising from or
related to any breach of or inaccuracy (or any allegation by any third party of
facts which, if true as alleged, would constitute such a breach or inaccuracy)
in any
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representation or warranty, contained in Section 1 of this Agreement.
(b) Monetary Limitation on Indemnification. The aggregate liability
of the Holders for indemnification under this Agreement shall not, when taken
together with all liabilities for Losses pursuant to Section 9.1.1 of the Merger
Agreement in any event exceed an amount equal to 10% of the total number of
Parent Shares issued in connection with the Merger.
(c) Time Limitation on Indemnification. Claims for indemnification
for Losses shall be made on or prior to the Release Date. If written notice of a
claim has been given to any Indemnifying Party prior to the Release Date, such
claim shall survive as to such claim until such claim has been finally resolved.
(d) Matters Involving Third Parties. Promptly after the receipt by
any Indemnitee of notice of the commencement of any action against such
Indemnitee by a third party, such Indemnitee shall, if a claim with respect
thereto is or may be made against any Indemnifying Party, use reasonable efforts
to give the Indemnifying Parties written notice thereof. The failure to give
such notice shall not relieve any Indemnifying Party from any obligation
hereunder except where, and then solely to the extent that, such failure
actually and materially prejudices the rights of such Indemnifying Party. Such
Indemnifying Party shall have the right to defend such claim, at such
Indemnifying Party's expense and with counsel of its choice reasonably
satisfactory to the Indemnitee, provided that (a) the Indemnifying Party so
notifies the Indemnitee within 30 days after receipt of such notice, (b) the
claim involves only money damages and does not seek injunctive or other
equitable relief, (c) settlement of, or an adverse judgment with respect to,
such claim is not, in the good faith judgment of the Indemnitee, reasonably
likely to establish a precedent adverse to the continuing business interests of
the Indemnitee, and (d) the Indemnifying Party conducts the defense of such
claim actively and diligently. So long as the Indemnifying Party is conducting
the defense of such claim as provided in the previous sentence, the Indemnitee
may retain separate co-counsel at its sole cost and expense and may participate
in defense of such claim, and neither the Indemnifying Party nor the Indemnitee
will consent to the entry of any judgment or enter into any settlement with
respect to such claim without the prior written consent of the other. In the
event the Indemnifying Party does not or ceases to conduct defense of such claim
as so provided, (x) the Indemnitee may defend against, such claim in any manner
it may reasonably deem to be appropriate, (y) the Indemnifying Party will
reimburse the Indemnitee promptly and periodically for the costs of defending
against such claim, including attorneys' fees and expenses, and (z) the
Indemnifying Party will remain responsible for any Losses the Indemnitee may
suffer as a result of such claim to the full extent provided in this Agreement.
7. Assignment; Benefits. This Agreement shall be binding
upon, and shall inure to the benefit of, the Holders, Parent and their
respective successors and permitted assigns.
8. Notices. Any notices or other communications required or
permitted
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hereunder shall be sufficiently given if in writing and delivered personally or
sent by telecopier, Federal Express, or registered or certified mail, postage
prepaid, addressed as follows:
If to Parent, to it at: PictureTel Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Holders, to them at the addresses set forth on Schedule I to
this Agreement.
with a copy to: ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally, (b) one
Business Day after being sent by Federal Express, if sent by Federal Express,
(c) one Business Day after being delivered, if delivered by telecopier and where
receipt by the addressee is confirmed by return telecopy and (d) three Business
Days after being sent, if sent by registered or certified mail. Each of the
parties hereto shall be entitled to specify a different address by giving notice
as aforesaid to each of the other parties hereto.
9. Specific Performance. The parties hereto agree that irreparable harm
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
10. Amendment. This Agreement may not be amended or modified, except by an
instrument in writing signed by or on behalf of each of the parties hereto. This
Agreement may not be waived by either party hereto, except by an instrument in
writing signed by or on behalf of
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the party granting such waiver.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts.
12. Survival, etc. All of the representations and warranties of the
Holders contained herein (except for those contained in the letters to be
delivered pursuant to Section 4(c)) shall survive the Closing and continue in
full force and effect until the Release Date. The representations and warranties
of the Company contained in the letters to be delivered pursuant to Section 4(c)
shall survive the Closing and shall continue in full force and effect without
limit as to time (subject to any applicable statutes of limitations and any
extensions or waivers thereof). All covenants and agreements of the Holders
contained herein shall remain in full force and effect so long as applicable.
Neither the period of survival nor the liability of any party with respect to
such party's representations, warranties, covenants and agreements shall be
reduced by any investigation made at any time by or on behalf of any party.
13. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
[The rest of this page intentionally left blank.]
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto, all as of the date first above written.
PICTURETEL CORPORATION
By:_______________________________
Name:
Title:
MASSACHUSETTS TECHNOLOGY
DEVELOPMENT CORP.
By:
Name:
Title:
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▇▇▇▇▇▇▇▇ INVESTMENT CORPORATION
By:
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ VENTURES, L.P.
__________________________________
By:_______________________________
Name:
Title:
CORNING PARTNERS III, L.P.
__________________________________
By:_______________________________
Name:
Title:
CORNING PARTNERS IV, L.P.
__________________________________
By:_______________________________
Name:
Title:
▇.▇. ▇▇ PARTNERS, L.P.
__________________________________
By:_______________________________
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Name:
Title:
▇▇▇▇▇▇▇ FAMILY TRUST
__________________________________
By:_______________________________
Name:
Title:
PRIT FUND - MASSACHUSETTS RESERVE
__________________________________
By:_______________________________
Name:
Title:
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SCHEDULE I
[TO BE PROVIDED]
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EXHIBIT A TO STOCKHOLDERS AGREEMENT
____________, 1997
PictureTel Corporation
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MultiLink, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We are providing this letter to you pursuant to Section 4(c) of the
Stockholders Agreement dated as of ________, 1997 between the undersigned and
Parent (the "Stockholders Agreement"). Capitalized terms used herein and not
defined have the meanings assigned to them in the Stockholders Agreement.
We hereby represent that, as of the Effective Date, we have no present
plan or intention to engage in any sale, exchange, transfer, distribution, gift,
pledge, disposition or short sale of Parent Shares received in the Merger (or
any other transaction which would result in a reduction in the risk of ownership
of Parent Shares received in the Merger).
We are not aware of or participating in any plan on the part of Company
shareholders to transfer (i) Company Shares in contemplation of the Merger or
(ii) Parent Shares received in the Merger.
We agree to report the Merger on applicable United States federal and
state income tax returns as a "reorganization" within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended.
Immediately prior to the Effective Date, we own, of record and
beneficially, [insert number] shares of Company Common Stock (the "Company
Shares"). The Company Shares were not acquired in contemplation of the Merger,
have been held by us at all times since [insert date of Merger Agreement], and
are not subject to any transaction which would result in a reduction in the risk
of ownership of such Company Shares.
Each of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel to the Company, and Ropes &
▇▇▇▇, counsel to Parent, may rely on these representations in rendering their
opinions to Company and Parent to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, and Company and Parent may rely on these representations in making any
representation to each such counsel for the purpose of such counsel rendering
its opinion.
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Very truly yours,
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