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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
PROXIM, INC.,
ALK ACQUISITION CORP.
AND
NETOPIA, INC.
DATED AS OF JANUARY 23, 2001
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TABLE OF CONTENTS
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ARTICLE I THE MERGER .................................................................... 2
1.1 The Merger ............................................................ 2
1.2 Effective Time; Closing ............................................... 2
1.3 Effect of the Merger .................................................. 2
1.4 Certificate of Incorporation; Bylaws .................................. 3
1.5 Directors and Officers ................................................ 3
1.6 Effect on Capital Stock ............................................... 3
1.7 Surrender of Certificates; Payment of Cash and Stock Consideration .... 4
1.8 No Further Ownership Rights in Company
Common Stock .......................................................... 6
1.9 Lost, Stolen or Destroyed Certificates ................................ 6
1.10 Tax and Accounting Consequences ....................................... 6
1.11 Taking of Necessary Action; Further Action ............................ 7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY .................................... 7
2.1 Organization and Qualification;
Subsidiaries .......................................................... 7
2.2 Certificate of Incorporation and Bylaws ............................... 8
2.3 Capitalization ........................................................ 8
2.4 Authority Relative to this Agreement .................................. 9
2.5 No Conflict; Required Filings and Consents ............................ 10
2.6 Compliance; Permits ................................................... 11
2.7 SEC Filings; Financial Statements ..................................... 11
2.8 No Undisclosed Liabilities ............................................ 12
2.9 Absence of Certain Changes or Events .................................. 12
2.10 Absence of Litigation ................................................. 13
2.11 Employee Benefit Plans ................................................ 13
2.12 Labor Matters ......................................................... 15
2.13 Registration Statement; Joint Proxy
Statement/Prospectus .................................................. 16
2.14 Restrictions on Business Activities ................................... 16
2.15 Property .............................................................. 16
2.16 Taxes ................................................................. 17
2.17 Environmental Matters ................................................. 19
2.18 Brokers ............................................................... 19
2.19 Intellectual Property ................................................. 20
2.20 Agreements, Contracts and Commitments ................................. 23
2.21 Insurance ............................................................. 25
2.22 Opinion of Financial Advisor .......................................... 25
2.23 Board Approval ........................................................ 25
2.24 Vote Required ......................................................... 25
2.25 State Takeover Statutes ............................................... 26
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB ..................... 26
3.1 Organization and Qualification; Subsidiaries .......................... 26
3.2 Certificate of Incorporation and Bylaws ............................... 26
3.3 Capitalization ........................................................ 27
3.4 Parent Common Stock ................................................... 27
3.5 Authority Relative to this Agreement .................................. 27
3.6 No Conflict; Required Filings and Consents ............................ 28
3.7 SEC Filings; Financial Statements ..................................... 28
3.8 No Undisclosed Liabilities ............................................ 29
3.9 Absence of Certain Changes or Events .................................. 29
3.10 Absence of Litigation ................................................. 30
3.11 Registration Statement; Joint Proxy Statement/Prospectus .............. 30
3.12 Operations of Merger Sub. ............................................. 30
3.13 Brokers ............................................................... 30
3.14 Opinion of Financial Advisor .......................................... 30
3.15 Board Approval ........................................................ 31
3.16 Vote Required ......................................................... 31
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME .......................................... 31
4.1 Conduct of Business by Company ........................................ 31
4.2 Conduct of Business by Parent ......................................... 34
ARTICLE V ADDITIONAL AGREEMENTS ......................................................... 35
5.1 Joint Proxy Statement/Prospectus; Registration Statement .............. 35
5.2 Stockholder Meetings .................................................. 36
5.3 Confidentiality; Access to Information ................................ 36
5.4 No Solicitation ....................................................... 37
5.5 Public Disclosure ..................................................... 38
5.6 Reasonable Efforts; Notification ...................................... 39
5.7 Third Party Consents .................................................. 40
5.8 Stock Options; 401(k) Plan; Employee Benefit Matters .................. 40
5.9 Form S-8 .............................................................. 41
5.10 Indemnification ....................................................... 41
5.11 Nasdaq Listing ........................................................ 42
5.12 Affiliates ............................................................ 42
5.13 Regulatory Filings; Reasonable Efforts ................................ 43
5.14 Parent Board of Directors ............................................. 43
5.15 Obligations of Merger Sub. ............................................ 43
ARTICLE VI CONDITIONS TO THE MERGER ..................................................... 43
6.1 Conditions to Obligations of Each Party to Effect the Merger .......... 43
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TABLE OF CONTENTS
(CONTINUED)
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6.2 Additional Conditions to Obligations of Company ....................... 44
6.3 Additional Conditions to the Obligations of Parent and Merger Sub. .... 45
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER ........................................... 46
7.1 Termination ........................................................... 46
7.2 Notice of Termination; Effect of Termination .......................... 47
7.3 Fees and Expenses ..................................................... 47
7.4 Amendment ............................................................. 48
7.5 Extension; Waiver ..................................................... 48
ARTICLE VIII GENERAL PROVISIONS ......................................................... 49
8.1 Survival of Representations and Warranties ............................ 49
8.2 Notices ............................................................... 49
8.3 Interpretation; Definitions ........................................... 50
8.4 Counterparts .......................................................... 51
8.5 Entire Agreement; Third Party Beneficiaries ........................... 51
8.6 Severability .......................................................... 51
8.7 Other Remedies; Specific Performance .................................. 51
8.8 Governing Law ......................................................... 52
8.9 Rules of Construction ................................................. 52
8.10 Assignment ............................................................ 52
INDEX OF EXHIBITS
Exhibit A-1 Form of Company Voting Agreement
Exhibit A-2 Form of Parent Voting Agreement
Exhibit B Form of Stock Option Agreement
Exhibit C Officers Signing Employment and Non-Competition Agreements
Exhibit D Form of Affiliate Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
January 23, 2001, by and among Proxim, Inc., a Delaware corporation ("PARENT"),
ALK Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("MERGER SUB"), and Netopia, Inc., a Delaware corporation ("COMPANY").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the Delaware General
Corporation Law ("DELAWARE LAW"), Parent and Company intend to enter into a
business combination transaction.
B. The Board of Directors of Company has unanimously (except for
director Xxxxx Xxxx who has recused himself from substantive discussions and
votes taken by the Board of Directors of Company with respect to the
transactions contemplated by this Agreement) (i) approved and declared advisable
this Agreement and has approved the Merger (as defined in Section 1.1) and the
other transactions contemplated hereby, (ii) determined that the Merger is
consistent with and in furtherance of the long-term business strategy of Company
and fair to, and in the best interests of, Company and its stockholders and
(iii) determined to recommended that the stockholders of Company adopt and
approve this Agreement and approve the Merger.
C. The Board of Directors of Parent (i) has determined that the Merger
is consistent with and in furtherance of the long-term business strategy of
Parent and is fair to, and in the best interests of, Parent and its
stockholders, (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement, and (iii) has determined to
recommend that the stockholders of Parent approve the issuance of shares of
Parent Common Stock (as defined below) pursuant to the Merger (the "SHARE
ISSUANCE").
D. Concurrently with the execution of this Agreement, (i) as a condition
and inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company are entering into Voting Agreements in the form attached
hereto as Exhibit A-1 (the "COMPANY VOTING AGREEMENTS") and (ii) as a condition
and inducement to Company's willingness to enter into this Agreement, certain
affiliates of Parent are entering into Voting Agreements in the form attached
hereto as Exhibit A-2 (the "PARENT VOTING AGREEMENTS").
E. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, Company is
entering into a Stock Option Agreement in favor of Parent in the form attached
hereto as Exhibit B (the "OPTION AGREEMENT").
F. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, each of the
officers of Company
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listed on Exhibit C is entering into an Employment and Noncompetition Agreement
with Parent and Company (the "EMPLOYMENT AGREEMENTS").
G. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "CODE"). For accounting purposes, the parties intend
that the Merger be treated as a purchase.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Company (the "MERGER"), the separate corporate existence of Merger Sub shall
cease, and Company shall continue as the surviving corporation and as a
wholly-owned subsidiary of Parent. Company as the surviving corporation after
the Merger is hereinafter sometimes referred to as the "SURVIVING CORPORATION."
1.2 Effective Time; Closing. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a certificate of merger, and such other articles, certificates or other
appropriate filing documents with the Secretary of State of the State of
Delaware in accordance with the relevant provisions of Delaware Law
(collectively, the "CERTIFICATE OF MERGER") (the time of such filing (or such
later time as may be agreed in writing by Company and Parent and specified in
the Certificate of Merger) being the "EFFECTIVE TIME") as soon as practicable on
or after the Closing Date (as herein defined). Unless the context otherwise
requires, the term "AGREEMENT" as used herein refers collectively to this
Agreement and Plan of Reorganization and the Certificate of Merger. The closing
of the Merger (the "CLOSING") shall take place at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx at a time and date to be specified by the parties, which shall be no
later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location as
the parties hereto agree in writing (the "CLOSING DATE").
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers,
and franchises of Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Company and Merger Sub
shall become the debts, liabilities, and duties of the Surviving Corporation.
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1.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of
the Surviving Corporation shall, subject to Section 5.10(a) of this Agreement,
be amended and restated to be identical to the Certificate of Incorporation of
Merger Sub as in effect immediately prior to the Effective Time until thereafter
amended as provided by law; provided, however, that at the Effective Time the
Certificate of Incorporation of the Surviving Corporation shall be amended and
restated so that the name of the Surviving Corporation shall be Netopia, Inc.
(b) The Bylaws of the Surviving Corporation shall, subject to
Section 5.10(a) of this Agreement, be amended and restated to be identical to
those in effect for Merger Sub immediately prior to the Effective Time until
thereafter amended.
1.5 Directors and Officers. The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified. The initial officers of
the Surviving Corporation shall be the officers of Merger Sub immediately prior
to the Effective Time, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation until their respective
successors are duly appointed.
1.6 Effect on Capital Stock. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of Merger Sub, Company or the holders of any of the following
securities, the following shall occur:
(a) Conversion of Company Common Stock. Each share of Common
Stock, $0.001 par value per share, of Company (the "COMPANY COMMON STOCK")
issued and outstanding immediately prior to the Effective Time, other than any
shares of Company Common Stock ("SHARES") to be cancelled pursuant to Section
1.6(b), will be cancelled and extinguished and automatically converted (subject
to Sections 1.6(e) and (f)) into the right to receive that number of shares of
Common Stock, $0.001 par value per share, of Parent (the "PARENT COMMON STOCK")
equal to 0.3 (the "EXCHANGE RATIO"), upon surrender of the certificate
representing such share of Company Common Stock in the manner provided in
Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9). If any shares of Company Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with the Company, then the shares of
Parent Common Stock issued in exchange for such shares of Company Common Stock
will also be unvested and subject to the same repurchase option, risk of
forfeiture or other condition, and the certificates representing such shares of
Parent Common Stock may accordingly be marked with appropriate legends. The
Company shall take all action that may be necessary to ensure that, from and
after the Effective Time, Parent is entitled to exercise any such repurchase
option or other right set forth in any such restricted stock purchase agreement
or other agreement.
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(b) Cancellation of Company-Owned and Parent-Owned Stock. Each
share of Company Common Stock held by Company or owned by Merger Sub, Parent or
any direct or indirect wholly-owned subsidiary of Company or of Parent
immediately prior to the Effective Time shall be cancelled and extinguished
without any conversion thereof.
(c) Stock Options. At the Effective Time, all options to
purchase Company Common Stock and stock appreciation rights then outstanding
under each of Company's 1987 Stock Option Plan, 1996 Stock Option Plan and 2000
Incentive Plan (collectively, the "COMPANY OPTION PLANS"), whether vested or
unvested and whether exercisable or unexercisable, with an exercise price per
share (as of immediately prior to the Effective Time) of less than $14.87, and
the Company Option Plans shall be assumed by Parent in accordance with Section
5.8 hereof.
(d) Capital Stock of Merger Sub. Each share of Common Stock,
$0.001 par value per share, of Merger Sub (the "MERGER SUB COMMON STOCK") issued
and outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of Common Stock, $0.001
par value per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock shall evidence ownership of such
shares of capital stock of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Parent Common Stock or Company Common Stock), reorganization,
recapitalization, reclassification or other like change with respect to Parent
Common Stock or Company Common Stock occurring on or after the date hereof and
prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Parent Common
Stock will be issued by virtue of the Merger, but in lieu thereof, each holder
of shares of Company Common Stock who would otherwise be entitled to a fraction
of a share of Parent Common Stock (after aggregating all fractional shares of
Parent Common Stock that otherwise would be received by such holder) shall, upon
surrender of such holder's Certificates(s) (as defined in Section 1.7(c)),
receive from Parent an amount of cash (rounded to the nearest whole cent),
without interest, equal to the product of (i) such fraction and (ii) the average
closing price of Parent Common Stock for the five trading days immediately
preceding the last full trading day prior to the Effective Time, as reported on
the Nasdaq National Market System ("NASDAQ").
1.7 Surrender of Certificates; Payment of Cash and Stock Consideration.
(a) Exchange Agent. Parent shall select a bank or trust company
reasonably acceptable to Company to act as the exchange agent (the "EXCHANGE
AGENT") in the Merger.
(b) Parent to Provide Common Stock and Cash Consideration. When
and as needed, Parent shall make available to the Exchange Agent, for exchange
in accordance with this Article I, (i) the shares of Parent Common Stock
issuable pursuant to Section 1.6 in exchange for outstanding shares of Company
Common Stock, and (ii) cash in an amount sufficient for payment in
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lieu of fractional shares pursuant to Section 1.6(f) and any dividends or
distributions to which holders of shares of Company Common Stock may be entitled
pursuant to Section 1.7(d).
(c) Exchange Procedures. As soon as practicable after the
Effective Time, and in any event not later than ten (10) business days, Parent
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate or certificates (the "CERTIFICATES"), which
immediately prior to the Effective Time represented outstanding Shares whose
Shares were converted into the right to receive shares of Parent Common Stock
pursuant to Section 1.6, cash in lieu of any fractional shares pursuant to
Section 1.6(f), and any dividends or other distributions pursuant to Section
1.7(d), (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall contain such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock, cash in lieu of any fractional
shares pursuant to Section 1.6(f) and any dividends or other distributions
pursuant to Section 1.7(d). Upon surrender of Certificates for cancellation to
the Exchange Agent or to such other agent or agents as may be appointed by
Parent, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, the holders of such
Certificates shall be entitled to receive in exchange therefor certificates
representing the number of whole shares of Parent Common Stock into which their
shares of Company Common Stock were converted at the Effective Time, payment in
lieu of fractional shares which such holders have the right to receive pursuant
to Section 1.6(f) and any dividends or distributions payable pursuant to Section
1.7(d), and the Certificates so surrendered shall forthwith be cancelled. Until
so surrendered, outstanding Certificates will be deemed from and after the
Effective Time, for all corporate purposes, subject to Section 1.7(d) as to the
payment of dividends, to evidence only the ownership of the number of full
shares of Parent Common Stock into which such shares of Company Common Stock
shall have been so converted and the right to receive an amount in cash in lieu
of the issuance of any fractional shares in accordance with Section 1.6(f) and
any dividends or distributions payable pursuant to Section 1.7(d).
(d) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Parent Common Stock with a record date after the
Effective Time will be paid to the holders of any unsurrendered Certificate(s)
with respect to the shares of Parent Common Stock represented thereby until the
holders of record of such Certificate(s) shall surrender such Certificate(s).
Subject to applicable law, following surrender of any such Certificate(s), the
Exchange Agent shall deliver to the record holders thereof, without interest, a
certificate(s) representing whole shares of Parent Common Stock issued in
exchange therefor along with payment in lieu of fractional shares pursuant to
Section 1.6(f) hereof and the amount of any such dividends or other
distributions with a record date after the Effective Time payable with respect
to such whole shares of Parent Common Stock.
(e) Transfers of Ownership. If any certificate representing
shares of Parent Common Stock is to be issued in a name other than that in which
the Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Parent or any agent designated by it
any transfer or other
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taxes required by reason of the issuance of certificates representing shares of
Parent Common Stock in any name other than that of the registered holder of the
Certificates surrendered, or established to the satisfaction of Parent or any
agent designated by it that such tax has been paid or is not payable.
(f) Required Withholding. Each of the Exchange Agent, Parent,
and the Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock such amounts as may be required
to be deducted or withheld therefrom under the Code or under any provision of
state, local or foreign tax law or under any other applicable legal requirement.
To the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the person
to whom such amounts would otherwise have been paid.
(g) No Liability. Notwithstanding anything to the contrary in
this Section 1.7, neither of the Exchange Agent, Parent, the Surviving
Corporation, or any party hereto shall be liable to a holder of shares of Parent
Common Stock or Company Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat, or similar law.
1.8 No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued in accordance with the terms hereof (together with
any cash paid in respect thereof pursuant to Sections 1.6(f) and 1.7(d)) shall
be deemed to have been issued in full satisfaction of all rights pertaining to
such shares of Company Common Stock, and there shall be no further registration
of transfers on the records of the Surviving Corporation of shares of Company
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
this Article I.
1.9 Lost, Stolen or Destroyed Certificates. In the event that any
Certificate shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock into which the shares of Company
Common Stock represented by such Certificates were converted pursuant to Section
1.6, cash for fractional shares, if any, as may be required pursuant to Section
1.6(f) and any dividends or distributions payable pursuant to Section 1.7(d);
provided, however, that Parent may, in its discretion and as a condition
precedent to the issuance of such certificates representing shares of Parent
Common Stock and other distributions, require the owner of such lost, stolen or
destroyed Certificate to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Parent, the Surviving
Corporation, or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
1.10 Tax and Accounting Consequences.
(a) It is intended by the parties hereto that the Merger shall
constitute a reorganization within the meaning of Section 368 of the Code. The
parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations.
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(b) It is intended by the parties hereto that the Merger shall
be treated as a purchase for accounting purposes.
1.11 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title, and possession to all assets, property, rights, privileges, powers
and franchises of Company and Merger Sub, the officers and directors of Company
and Merger Sub are fully authorized in the manner of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
As of the date hereof and as of the Closing Date, Company represents and
warrants to Parent and Merger Sub, subject to such exceptions as are
specifically disclosed in writing in the disclosure letter and schedules thereto
(each such exception referencing the specific section number of this Article II
to which it applies and each other section number of this Article II to the
extent such applicability is reasonably apparent on the face of such exception),
dated as of the date hereof (the "COMPANY SCHEDULE"), as follows:
2.1 Organization and Qualification; Subsidiaries.
(a) Each of Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted. Each of Company and its subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("APPROVALS") necessary
to own, lease and operate the properties it purports to own, operate or lease
and to carry on its business as it is now being conducted, except where the
failure to have such Approvals has not had, and would not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect (as
defined in Section 8.3(b)(ii)), on Company. Each of Company and its subsidiaries
is duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that have not had, and would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect on Company.
(b) Company has no subsidiaries except for the corporations
identified in Section 2.1(b) of the Company Schedule. Neither Company nor any of
its subsidiaries has agreed nor is obligated to make nor be bound by any
written, oral or other agreement, contract, subcontract, lease, binding
understanding, instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan, commitment or undertaking of any
nature, as of the date hereof or as may hereafter be in effect (a "CONTRACT")
under which it may become obligated to make, any future investment in or capital
contribution to any other entity. Neither Company nor any of its
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subsidiaries directly or indirectly owns any equity or similar interest in or
any interest convertible, exchangeable or exercisable for, any equity or similar
interest in, any corporation, partnership, joint venture or other business,
association or entity.
2.2 Certificate of Incorporation and Bylaws. Company has previously
furnished to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date (together, the "COMPANY CHARTER
DOCUMENTS"). Such Company Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Company is
not in violation of any of the provisions of the Company Charter Documents, and
no subsidiary of Company is in violation of its equivalent organizational
documents.
2.3 Capitalization.
(a) The authorized capital stock of Company consists of
25,000,000 shares of Company Common Stock, $0.001 par value, and 5,000,000
shares of Preferred Stock, $0.001 par value ("COMPANY PREFERRED STOCK"). At the
close of business on January 22, 2001, (i) 17,735,858 shares of Company Common
Stock were issued and outstanding, all of which are validly issued, fully paid
and nonassessable; (ii) no shares of Company Common Stock were held in treasury
by Company or by subsidiaries of Company; (iii) 5,055,731 shares of Company
Common Stock were reserved for issuance upon the exercise of outstanding options
to purchase Company Common Stock under the Company Option Plans; (iv) 960,849
shares of Company Common Stock were available for future grant under the Company
Option Plans; (v) 138,580 shares of Company Common Stock were available for
future issuance under the Company ESPP; (vi) 3,545,398 shares of Company Common
Stock were reserved for issuance upon exercise of the Option Agreement; and
(vii) 5,000 shares of Company Common Stock were reserved for issuance upon the
exercise of outstanding warrants to purchase Company Common Stock (the "COMPANY
WARRANTS"). As of the date hereof, no shares of Company Preferred Stock were
issued or outstanding. Section 2.3(a) of the Company Schedule sets forth the
following information with respect to each Company Stock Option (as defined in
Section 5.8) outstanding as of the close of business on January 22, 2001: (i)
the name and address of the optionee; (ii) the particular plan pursuant to which
such Company Stock Option was granted; (iii) the number of shares of Company
Common Stock subject to such Company Stock Option; (iv) the exercise price of
such Company Stock Option; (v) the date on which such Company Stock Option was
granted; (vi) the applicable vesting schedule; and (vii) the date on which such
Company Stock Option expires. Section 2.3(a) of the Company Schedule also sets
forth each outstanding Company Warrant as of the close of business on January
22, 2001, the name of the holder of such Company Warrant and the exercise price
therefor. Company has made available to Parent accurate and complete copies of
all stock option plans pursuant to which the Company has granted such Company
Stock Options that are currently outstanding and the form of all stock option
agreements evidencing such Company Stock Options. All shares of Company Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instrument pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. Except
as set forth in Section 2.3(a) of the Company Schedule, there are no commitments
or agreements of any character to which the Company is bound obligating the
Company to accelerate the vesting of any Company Stock Option as a result of the
Merger. All outstanding shares of Company Common Stock, all outstanding Company
Stock Options, and all
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outstanding shares of capital stock of each subsidiary of the Company have been
issued and granted in compliance in all material respects with (i) all
applicable securities laws and other applicable Legal Requirements (as defined
below) and (ii) all requirements set forth in applicable Contracts. For the
purposes of this Agreement, "LEGAL REQUIREMENTS" means any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issues, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Entity (as defined
below) and (ii) all requirements set forth in applicable contracts, agreements,
and instruments.
(b) Except for securities Company owns free and clear of all
liens, pledges, hypothecations, charges, mortgages, security interests,
encumbrances, claims, infringements, interferences, options, right of first
refusals, preemptive rights, community property interests or restriction of any
nature (including any restriction on the voting of any security, any restriction
on the transfer of any security or other asset, any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset) directly or indirectly through one or more subsidiaries, and except for
shares of capital stock or other similar ownership interests of subsidiaries of
the Company that are owned by certain nominee equity holders as required by the
applicable law of the jurisdiction of organization of such subsidiaries (which
shares or other interests do not materially affect the Company's control of such
subsidiaries), as of the date of this Agreement, there are no equity securities,
partnership interests or similar ownership interests of any class of equity
security of any subsidiary of the Company, or any security exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except as set forth in Section 2.3(a) and except for the Option
Agreement, there are no subscriptions, options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which Company
or any of its subsidiaries is a party or by which it is bound obligating Company
or any of its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition of, any shares of capital stock,
partnership interests or similar ownership interests of the Company or any of
its subsidiaries or obligating the Company or any of its subsidiaries to grant,
extend, accelerate the vesting of or enter into any such subscription, option,
warrant, equity security, call, right, commitment or agreement. As of the date
of this Agreement, except as contemplated by this Agreement, there are no
registration rights and there is, except for the Company Voting Agreements, no
voting trust, proxy, rights plan, antitakeover plan or other agreement or
understanding to which the Company or any of its subsidiaries is a party or by
which they are bound with respect to any equity security of any class of the
Company or with respect to any equity security, partnership interest or similar
ownership interest of any class of any of its subsidiaries. Stockholders of
Company will not be entitled to dissenters' rights under applicable state law in
connection with the Merger.
2.4 Authority Relative to this Agreement. Company has all necessary
corporate power and authority to execute and deliver this Agreement and the
Option Agreement and subject to obtaining the approval of the stockholders of
Company of the Merger and the transactions contemplated hereby and thereby, to
perform its obligations hereunder and thereunder and to
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consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Option Agreement by Company and the
consummation by Company of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part
of Company, and no other corporate proceedings on the part of Company are
necessary to authorize this Agreement and the Option Agreement or to consummate
the transactions so contemplated (other than, with respect to the Merger, the
approval and adoption of this Agreement by Company's stockholders in accordance
with Delaware Law and the Company Charter Documents and the filing and
recordation of the Certificate of Merger as required by Delaware Law). This
Agreement and the Option Agreement each has been duly and validly executed and
delivered by Company and, assuming the due authorization, execution and delivery
by Parent and Merger Sub, constitute legal and binding obligations of Company,
enforceable against Company in accordance with their respective terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
2.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and the Option
Agreement by Company do not, and the performance of this Agreement and the
Option Agreement by Company will not, (i) conflict with or violate the Company
Charter Documents or the equivalent organizational documents of any of Company's
subsidiaries; (ii) subject to obtaining the approval of Company's stockholders
of the Merger and compliance with the requirements set forth in Section 2.5(b)
below, to the knowledge of Company, conflict with, or result in any violation
of, any law, rule, regulation, order, judgment or decree applicable to Company
or any of its subsidiaries or by which either Company or any of its subsidiaries
or any of their respective properties is bound or affected; or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or impair Company's or any of its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a material lien or encumbrance on
any of the properties or assets of Company or any of its subsidiaries pursuant
to, any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Company or
any of its subsidiaries is a party or by which Company or any of its
subsidiaries or its or any of their respective properties are bound or affected.
(b) The execution and delivery of this Agreement and the Option
Agreement by Company do not, and the performance of this Agreement by Company
will not, require any consent, waiver, approval, authorization or permit of, or
filing with or notification to, any court, administrative agency, commission,
governmental or regulatory authority, domestic or foreign (a "GOVERNMENTAL
ENTITY"), except (A) for applicable requirements, if any, of the Securities Act
of 1933, as amended (together with the rules and regulations promulgated
thereunder, the "SECURITIES ACT"), the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
"EXCHANGE ACT"), state securities laws ("BLUE SKY LAWS"), the pre-merger
notification requirements (the "HSR APPROVAL") of the Xxxx-Xxxxx-Xxxxxx
Antitrust
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Improvements Act of 1976, as amended (together with the rules and regulations
promulgated thereunder, the "HSR ACT"), the rules and regulations of Nasdaq,
state takeover laws and the filing and recordation of the Certificate of Merger
as required by Delaware Law and (B) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not reasonably be expected to have a Material Adverse Effect on Company or
a material adverse effect on the ability of Company to perform its obligations
under this Agreement, or prevent consummation of the Merger or otherwise prevent
the parties hereto from performing their obligations under this Agreement.
2.6 Compliance; Permits.
(a) Neither Company nor any of its subsidiaries is in conflict
with, or in default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to Company or any of its subsidiaries or by which
its or any of their respective properties is bound or affected or (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Company or any of its
subsidiaries is a party or by which Company or any of its subsidiaries or its or
any of their respective properties is bound or affected, except for any
conflicts, defaults or violations that (individually or in the aggregate) would
not be material to the business of Company as currently conducted. No
investigation or review by any governmental or regulatory body or authority is
pending or, to the knowledge of Company, threatened against Company or its
subsidiaries, nor has any governmental or regulatory body or authority indicated
to Company or any of its subsidiaries an intention to conduct the same, other
than, in each such case, those the outcome of which would not, individually or
in the aggregate, reasonably be expected to have the effect of prohibiting or
materially impairing any current business practice of the Company or any of its
subsidiaries, any acquisition of material property by the Company or any of its
subsidiaries or the conduct of business by the Company or any of its
subsidiaries.
(b) Company and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals from governmental authorities which
are material to operation of the business of Company and its subsidiaries taken
as a whole (collectively, the "COMPANY PERMITS"). Company and its subsidiaries
are in compliance in all material respects with the terms of the Company
Permits.
2.7 SEC Filings; Financial Statements.
(a) Company has made available to Parent a correct and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by Company with the Securities and Exchange Commission ("SEC")
since December 31, 1999 (the "COMPANY SEC REPORTS"), which are all the forms,
reports and documents required to be filed by Company with the SEC since
December 31, 1999. The Company SEC Reports (A) complied in all material respects
as of their respective dates with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (B) did not at the time they were filed
(and if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading. None of Company's subsidiaries is required to file any
reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, do not
contain footnotes as permitted by Form 10-Q of the Exchange Act) and each fairly
presents the consolidated financial position of Company and its subsidiaries at
the respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments that were not or are not expected to be material in amount.
(c) Company has previously furnished to Parent a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Company with the SEC
pursuant to the Securities Act or the Exchange Act.
2.8 No Undisclosed Liabilities. Neither Company nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise) of
a nature required to be disclosed on a balance sheet or in the related notes to
the consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations or financial condition of Company and its subsidiaries taken as a
whole, except (i) liabilities provided for in Company's balance sheet as of
September 30, 2000 and (ii) liabilities incurred since September 30, 2000 in the
ordinary and usual course of business, consistent with past practice, none of
which would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on Company.
2.9 Absence of Certain Changes or Events. Since September 30, 2000,
there has not been: (i) any Material Adverse Effect on Company; (ii) any
declaration, setting aside or payment of any dividend on, or other distribution
(whether in cash, stock, or property) in respect of, any of Company's or any of
its subsidiaries' capital stock, or any purchase, redemption or other
acquisition by Company of any of Company's capital stock or any other securities
of Company or its subsidiaries or any options, warrants, calls or rights to
acquire any such shares or other securities except for repurchases from
employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements; (iii) any split, combination
or reclassification of any of Company's or any of its subsidiaries' capital
stock; (iv) any granting by Company or any of its subsidiaries of any increase
in compensation or fringe benefits, except for normal increases of cash
compensation to non-officer employees in the ordinary and usual course of
business consistent with past practice, or any payment by Company or any of its
subsidiaries of any bonus, except for bonuses made to non-officer employees in
the ordinary course of business consistent with past practice, or any granting
by Company or any of its subsidiaries of any increase in severance or
termination pay or any entry by Company or any of its subsidiaries into any
currently effective employment, severance, termination or indemnification
agreement or any agreement the benefits of which are contingent or the terms of
which are materially altered upon the occurrence of a
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transaction involving Company of the nature contemplated hereby; (v) entry by
Company or any of its subsidiaries into any licensing or other agreement with
regard to the acquisition or disposition of any Intellectual Property (as
defined in Section 2.19) other than licenses in the ordinary and usual course of
business, consistent with past practice, or any amendment or consent with
respect to any licensing agreement filed or required to be filed by Company with
the SEC; (vi) any material change by Company in its accounting methods,
principles or practices, except as required by concurrent changes in GAAP; or
(vii) any revaluation by Company of any of its assets, including, without
limitation, writing down the value of capitalized inventory or writing off notes
or accounts receivable or any sale of assets of the Company other than in the
ordinary and usual course of business, consistent with past practice.
2.10 Absence of Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of Company, threatened (or, to the
knowledge of Company, any governmental or regulatory investigation pending or
threatened) against Company or any of its subsidiaries or any properties or
rights of Company or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign, except for any claims, actions, suits or proceedings which seek damages
of less than $50,000, do not seek injunctive relief and do not challenge or seek
to delay the transactions contemplated by this Agreement.
2.11 Employee Benefit Plans.
(a) All employee compensation, incentive, fringe or benefit
plans, programs, policies, commitments or other arrangements (whether or not set
forth in a written document and including, without limitation, all "employee
benefit plans" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) covering any active, former
employee, director or consultant of Company, any subsidiary of Company or any
trade or business (whether or not incorporated) which is a member of a
controlled group or which is under common control with Company within the
meaning of Section 414 of the Code (an "AFFILIATE"), or with respect to which
Company has or may in the future have liability, are listed in Section 2.11(a)
of the Company Schedule (the "PLANS"). Company has provided to Parent: (i)
correct and complete copies of all documents embodying each Plan including
(without limitation) all amendments thereto, all related trust documents, and
all material written agreements and contracts relating to each such Plan; (ii)
the three (3) most recent annual reports (Form Series 5500 and all schedules and
financial statements attached thereto), if any, required under ERISA or the Code
in connection with each Plan; (iii) the most recent summary plan description
together with the summary(ies) of material modifications thereto, if any,
required under ERISA with respect to each Plan; (iv) all Internal Revenue
Service ("IRS") or United States Department of Labor ("DOL") determination,
opinion, notification and advisory letters; (v) all material correspondence to
or from any governmental agency relating to any Plan; (vi) all COBRA (as defined
below) forms and related notices; (vii) all discrimination tests for each Plan
for the most recent three (3) plan years; (viii) the most recent annual
actuarial valuations, if any, prepared for each Plan; (ix) if the Plan is
funded, the most recent annual and periodic accounting of Plan assets; (x) all
material written agreements and contracts relating to each Plan, including, but
not limited to, administrative service agreements, group annuity contracts and
group insurance contracts; (xi) all material communications to employees or
former
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employees regarding in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments or
vesting schedules or other events which would result in any material liability
under any Plan or proposed Plan; (xii) all policies pertaining to fiduciary
liability insurance covering the fiduciaries for each Plan; and (xiii) all
registration statements, annual reports (Form 11-K and all attachments thereto)
and prospectuses prepared in connection with any Plan.
(b) Each Plan has been maintained and administered in all
material respects in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations (foreign or
domestic), including but not limited to ERISA and the Code, which are applicable
to such Plans. No suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of Plan activities) has been brought,
or to the knowledge of Company, is threatened, against or with respect to any
such Plan. There are no audits, inquiries or proceedings pending or, to the
knowledge of Company, threatened by the IRS or DOL with respect to any Plan. All
contributions, reserves or premium payments required to be made or accrued as of
the date hereof to the Plans have been timely made or accrued. Any Plan intended
to be qualified under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code (i) has either obtained a favorable
determination notification, advisory and/or opinion letter, as applicable, as to
its qualified status from the IRS or still has a remaining period of time under
applicable Treasury Regulations or IRS pronouncements in which to apply for such
letter and to make any amendments necessary to obtain a favorable determination
and (ii) incorporates or has been amended to incorporate all provisions required
to comply with the Tax Reform Act of 1986 and subsequent legislation. Company
does not have any plan or commitment to establish any new Plan, to modify any
Plan (except to the extent required by law or to conform any such Plan to the
requirements of any applicable law, in each case as previously disclosed to
Parent in writing, or as required by this Agreement), or to enter into any new
Plan. Each Plan can be amended, terminated or otherwise discontinued after the
Effective Time in accordance with its terms, without liability to Parent,
Company or any of its Affiliates (other than ordinary administration expenses).
(c) Neither Company, any of its subsidiaries, nor any of their
Affiliates has at any time ever maintained, established, sponsored, participated
in, or contributed to any plan subject to Title IV of ERISA or Section 412 of
the Code and at no time has Company or any of its subsidiaries contributed to or
been requested to contribute to any "multiemployer plan," as such term is
defined in ERISA or to any plan described in Section 413(c) of the Code. Neither
Company, any of its subsidiaries, nor any officer or director of Company or any
of its subsidiaries is subject to any liability or penalty under Sections 4975
through 4980B of the Code or Title I of ERISA. There are no audits, inquiries or
proceedings pending or, to the knowledge of Company, threatened by the IRS or
DOL with respect to any Plan. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 408 of ERISA, has occurred with respect to any Plan.
(d) Neither Company, any of its subsidiaries, nor any of their
Affiliates has, prior to the Effective Time and in any material respect,
violated any of the health continuation requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), the requirements of the
Family Medical Leave Act of 1993, as amended, the
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requirements of the Women's Health and Cancer Rights Act, as amended, the
requirements of the Newborns' and Mothers' Health Protection Act of 1996, as
amended, or any similar provisions of state law applicable to employees of the
Company or any of its subsidiaries. None of the Plans promises or provides
retiree medical or other retiree welfare benefits to any person except as
required by applicable law, and neither Company nor any of its subsidiaries has
represented, promised or contracted (whether in oral or written form) to provide
such retiree benefits to any employee, former employee, director, consultant or
other person, except to the extent required by statute.
(e) Neither Company nor any of its subsidiaries is bound by or
subject to (and none of its respective assets or properties is bound by or
subject to) any arrangement with any labor union. No employee of Company or any
of its subsidiaries is represented by any labor union or covered by any
collective bargaining agreement and, to the knowledge of Company, no campaign to
establish such representation is in progress. There is no pending or, to the
knowledge of Company, threatened labor dispute involving Company or any of its
subsidiaries and any group of its employees nor has Company or any of its
subsidiaries experienced any labor interruptions over the past three (3) years,
and Company and its subsidiaries consider their relationships with their
employees to be good. The Company and its subsidiaries are in compliance in all
material respects with all applicable material foreign, federal, state and local
laws, rules and regulations respecting employment, employment practices, terms
and conditions of employment and wages and hours.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, bonus
or otherwise) becoming due to any shareholder, director or employee of Company
or any of its subsidiaries under any Plan or otherwise, (ii) increase any
benefits otherwise payable under any Plan, or (iii) result in the acceleration
of the time of payment or vesting of any such benefits. Without limiting the
foregoing, no payment or benefit which will or may be made by the Company with
respect to any person as a result of the transactions contemplated by this
Agreement will be characterized as an "excess parachute payment," within the
meaning of Section 280G(b)(1) of the Code.
2.12 Labor Matters. (i) There are no controversies pending or, to the
knowledge of each of Company and its respective subsidiaries, threatened,
between Company or any of its subsidiaries and any of their respective
employees; (ii) as of the date of this Agreement, neither Company nor any of its
subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by Company or its subsidiaries nor
does Company or its subsidiaries have knowledge of any activities or proceedings
of any labor union to organize any such employees; and (iii) as of the date of
this Agreement, neither Company nor any of its subsidiaries has any knowledge of
any strikes, slowdowns, work stoppages or lockouts, or threats thereof, by or
with respect to any employees of Company or any of its subsidiaries. Company and
its subsidiaries are in compliance in all material respects with all applicable
material foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours.
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2.13 Registration Statement; Joint Proxy Statement/Prospectus. None of
the information supplied or to be supplied by Company for inclusion or
incorporation by reference in (i) the registration statement on Form S-4 to be
filed with the SEC by Parent in connection with the issuance of the Parent
Common Stock in or as a result of the Merger (the "S-4") will, at the time the
S-4 becomes effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and (ii) the joint
proxy statement/prospectus to be filed with the SEC by Company and Parent
pursuant to Section 5.1 hereof (the "JOINT PROXY STATEMENT/PROSPECTUS") will, at
the dates mailed to the stockholders of Company, at the times of the
stockholders meeting of Company (the "COMPANY STOCKHOLDERS' MEETING") in
connection with the transactions contemplated hereby at the dates mailed to the
stockholders of Parent, at the times of the stockholders' meeting of Parent (the
"PARENT STOCKHOLDERS' MEETING") in connection with the Share Issuance and as of
the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
are made, not misleading. The Joint Proxy Statement/Prospectus will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations promulgated by the SEC thereunder. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to any
information supplied by Parent or Merger Sub which is contained in any of the
foregoing documents.
2.14 Restrictions on Business Activities. There is no agreement,
commitment, judgment, injunction, order or decree binding upon Company or its
subsidiaries or to which the Company or any of its subsidiaries is a party which
has or would reasonably be expected to have the effect of prohibiting or
materially impairing any business practice material to Company or any of its
subsidiaries, any acquisition of property by Company or any of its subsidiaries
or the conduct of business by Company or any of its subsidiaries as currently
conducted.
2.15 Property. Neither Company nor any of its subsidiaries owns any
material real property. Section 2.15(a) of the Company Schedule is a complete
and accurate list of all real property leases to which Company or any of its
subsidiaries is a party and each amendment thereto. Each premises subject to a
lease is hereinafter referred to as a "LEASED PROPERTY." Company has provided or
made available to Parent true, complete and correct copies of each such lease;
no term or condition of any such lease has been modified, amended or waived
except as shown in such copies; each such lease constitutes the entire agreement
of the landlord and the tenant thereunder; and there are no other agreements or
arrangements whatsoever relating to Company's use or occupancy of any of the
premises described in such leases. Company has not transferred, mortgaged or
assigned any interest in any such lease, nor has Company subleased or otherwise
granted rights of use or occupancy of any of the premises described therein to
any other person or entity. Company and each of its subsidiaries have good and
valid title to all of their material properties and assets, free and clear of
all liens, charges and encumbrances except liens for taxes not yet due and
payable, except as reflected in the financial statements contained in the
Company SEC Reports and except for such liens or other imperfections of title,
if any, as do not materially detract from the value of or interfere with the
present use of the property affected thereby; and all leases pursuant to which
Company or any of its subsidiaries lease from others material real or personal
property are in good standing, valid
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and effective in accordance with their respective terms, and there is not, under
any of such leases, any existing material default or event of default (or any
event which with notice or lapse of time, or both, would constitute a material
default and in respect of which Company or subsidiary has not taken adequate
steps to prevent such default from occurring). All the plants, structures and
equipment of Company and its subsidiaries, except such as may be under
construction, are in good operating condition and repair, in all material
respects. There is no pending or, to Company's knowledge, threatened
condemnation or similar proceeding affecting any Leased Property or any portion
thereof, and Company has no knowledge that any such action is currently
contemplated.
2.16 Taxes.
(a) For the purposes of this Agreement, "TAX" or "TAXES" refers
to any and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities relating to taxes,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts
and any obligations under any agreements or arrangements with any other person
with respect to such amounts and including any liability for taxes of a
predecessor entity.
(b) Company and each of its subsidiaries have timely filed, or
will timely file, all federal, state, local and foreign returns, estimates,
information statements and reports ("RETURNS") relating to Taxes required to be
filed by Company and each of its subsidiaries prior to the Effective Time with
any Tax authority, except such Returns which are not material to Company. Such
returns are, or will be when filed, true and correct in all material respects
and have been or will be completed in accordance with applicable Law, and
Company and each of its subsidiaries have paid or will pay all Taxes shown to be
due on such Returns.
(i) Company and each of its subsidiaries as of the
Effective Time will have withheld with respect to its employees all federal and
state income taxes, Taxes pursuant to the Federal Insurance Contribution Act,
Taxes pursuant to the Federal Unemployment Tax Act and other Taxes required to
be withheld.
(ii) Neither Company nor any of its subsidiaries has
been delinquent in the payment of any material Tax nor is there any material Tax
deficiency outstanding, proposed or assessed against Company or any of its
subsidiaries, nor has Company or any of its subsidiaries executed any unexpired
waiver or extension of any statute of limitations on or extending the period for
the assessment or collection of any Tax, nor has any such waiver or extension
been requested from the Company or any of its subsidiaries other than an
extension resulting from the filing of a Tax Return after its due date in the
ordinary course of business.
(iii) No audit or other examination of any Return of
Company or any of its subsidiaries by any Tax authority is presently in
progress, nor has Company or any of its subsidiaries been notified of any
request for such an audit or other examination.
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(iv) No adjustment relating to any Returns filed by
Company or any of its subsidiaries has been proposed in writing formally or
informally by any Tax authority to Company or any of its subsidiaries or any
representative thereof.
(v) Neither Company nor any of its subsidiaries has any
liability for any material unpaid Taxes which has not been accrued for or
reserved on Company balance sheet dated September 30, 2000 in accordance with
GAAP, whether asserted or unasserted, contingent or otherwise, which is material
to Company, other than any liability for unpaid Taxes that may have accrued
since September 30, 2000 in connection with the operation of the business of
Company and its subsidiaries in the ordinary course.
(vi) There is no contract, agreement, plan or
arrangement to which Company or any of its subsidiaries is a party as of the
date of this Agreement, including but not limited to the provisions of this
Agreement, covering any employee or former employee or any director of the
Company or any of its subsidiaries that, individually or collectively, would
reasonably be expected to give rise to the payment of any amount that would not
be deductible by reason of Sections 280G, 404 or 162(m) of the Code. There is no
contract, agreement, plan or arrangement to which the Company or any of its
subsidiaries is a party or by which it is bound to compensate any individual for
excise taxes paid pursuant to Section 4999 of the Code.
(vii) Neither Company nor any of its subsidiaries has
filed any consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as defined in Section 341(f)(4) of the Code) owned by the Company or any of its
subsidiaries.
(viii) Except as between Company and its current
subsidiaries, neither Company nor any of its subsidiaries is, or has ever been,
a party to or bound by any tax indemnity agreement, tax sharing agreement, tax
allocation agreement or similar Contract (such agreements and Contracts, "TAX
INDEMNITY AGREEMENTS"), including any obligation arising by reason of Treasury
Regulations Section 1.1502-6, and neither Company nor any of its subsidiaries
has or, by reason of the consummation of the transactions contemplated under
this Agreement, will have any liability or obligation under any Tax Indemnity
Agreement.
(ix) No claim or action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry or investigation commenced, brought,
conducted or heard by or before, or otherwise involving, any court or other
governmental body or any arbitrator or arbitration panel is pending or, to the
Company's knowledge, has been threatened against or with respect to the Company
or any of its subsidiaries in respect of any material Tax.
(x) Neither the Company nor any of its subsidiaries has
been or will be required to include any material adjustment in taxable income
for any tax period (or portion thereof) pursuant to Section 481 of the Code or
any comparable provision under any Tax laws as a result of transactions or
events occurring, or accounting methods employed, prior to the Closing.
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(xi) Neither the Company nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation"
(as such terms are defined in Section 355(a) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (x) in the
two years prior to the date of this Agreement, or (y) in a distribution that
could otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the
Merger.
2.17 Environmental Matters. Company (i) has obtained all applicable
permits, licenses and other authorizations that are required under Environmental
Laws the absence of which would have a Material Adverse Effect on Company; (ii)
is in compliance in all material respects with all material terms and conditions
of such required permits, licenses and authorizations, and also is in compliance
in all material respects with all other material limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in such laws or contained in any regulation, code, plan,
order, decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder; and (iii) as of the date hereof, has no knowledge of and
has not received notice of any event, condition, circumstance, activity,
practice, incident, action or plan that is reasonably likely to interfere with
or prevent continued compliance or that would give rise to any common law or
statutory liability, or otherwise form the basis of any Environmental Claim with
respect to Company or any person or entity whose liability for any Environmental
Claim Company has retained or assumed either contractually or by operation of
law. No Hazardous Materials are present in, on or under any properties owned,
leased or used at any time (including both land and improvements thereon) by
Company, so as to give rise to any liability or corrective or remedial
obligation under any Environmental Laws. For the purposes of this Section 2.17,
"ENVIRONMENTAL CLAIM" means any notice, claim, act, cause of action or
investigation by any person alleging potential liability (including potential
liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries or penalties)
arising out of, based on or resulting from (i) the presence, or release into the
environment, of any Hazardous Materials or (ii) any violation, or alleged
violation, of any Environmental Laws. For the purposes of this Section 2.17,
"ENVIRONMENTAL LAWS" means all Federal, state, local and foreign laws and
regulations relating to pollution of the environment (including ambient air,
surface water, ground water, land surface or subsurface strata) or the
protection of human health and worker safety, including, without limitation,
laws and regulations relating to emissions, discharges, releases or threatened
releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials. "HAZARDOUS MATERIALS" means chemicals,
pollutants, contaminants, wastes, toxic substances, radioactive and biological
materials, asbestos-containing materials, hazardous substances, petroleum and
petroleum products or any fraction thereof, excluding, however, Hazardous
Materials contained in products typically used for office and janitorial
purposes properly and safely maintained in accordance with Environmental Laws.
2.18 Brokers. Except for fees payable to Xxxxxxxxx Xxxxxxxx Inc.
pursuant to an engagement letter dated September 7, 1999, a copy of which has
been provided to Parent, Company has not incurred, nor will it incur, directly
or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby
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2.19 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United
States and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof ("PATENTS"); (ii) all inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and
customer lists, and all documentation relating to any of the foregoing;
(iii) all copyrights, copyright registrations and applications therefor
and all other rights corresponding thereto throughout the world; (iv)
all semiconductor and semiconductor circuit designs; (v) all rights to
all mask works and reticles, mask work registrations and applications
therefor; (vi) all industrial designs and any registrations and
applications therefor throughout the world; (vii) all trade names,
logos, common law trademarks and service marks; trademark and service
xxxx registrations and applications therefor and all goodwill associated
therewith throughout the world; (viii) all databases and data
collections and all rights therein throughout the world; (ix) all
computer software including all source code, object code, firmware,
development tools, files, records and data, all media on which any of
the foregoing is recorded, all Web addresses, sites and domain names;
(x) any similar, corresponding or equivalent rights to any of the
foregoing; and (xi) all documentation related to any of the foregoing.
"COMPANY INTELLECTUAL PROPERTY" shall mean any Intellectual Property
that is owned by or exclusively licensed to the Company or any of its
subsidiaries, including the Company Registered Intellectual Property (as
defined below). Without in any way limiting the generality of the
foregoing, Company Intellectual Property includes all Intellectual
Property owned or exclusively licensed by the Company related to the
Company's products, including without limitation all rights in any
design code, documentation, and tooling for packaging of semiconductors
in connection with all current products and products in design and
development.
"REGISTERED INTELLECTUAL PROPERTY" shall mean all United States,
international and foreign: (i) patents, patent applications (including
provisional applications); (ii) registered trademarks, applications to
register trademarks, intent-to-use applications, or other registrations
or applications related to trademarks; (iii) registered copyrights and
applications for copyright registration; (iv) any mask work
registrations and applications to register mask works; and (v) any other
Company Intellectual Property that is the subject of an application,
certificate, filing, registration or other document issued by, filed
with, or recorded by, any state, government or other public legal
authority.
"COMPANY REGISTERED INTELLECTUAL PROPERTY" means all of the Registered
Intellectual Property owned by, or filed in the name of, the Company or
any of its subsidiaries.
(a) Section 2.19(a) of the Company Schedule is a complete and
accurate list of all Company Registered Intellectual Property and specifies,
where applicable, the jurisdictions in which each such item of Company
Registered Intellectual Property has been issued or registered and lists
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any proceedings or actions before any court, tribunal (including the United
States Patent and Trademark Office (the "PTO") or equivalent authority anywhere
in the world) related to any of the Company Registered Intellectual Property.
(b) No Company Intellectual Property or software products owned
by, or service offerings of, the Company or any of its subsidiaries ("COMPANY
PRODUCTS") are subject to any proceeding or outstanding decree, order, judgment,
contract, license, agreement, or stipulation materially restricting the use,
transfer, or licensing thereof by Company or any of its subsidiaries, or which
may materially adversely affect the validity, use or enforceability of such
Company Intellectual Property or Company Product.
(c) Each material item of Company Registered Intellectual
Property is valid and subsisting, all necessary registration, maintenance and
renewal fees currently due in connection with such Company Registered
Intellectual Property have been made and all necessary documents, recordations
and certificates in connection with such Company Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such Company Registered Intellectual Property.
(d) Company owns and has good and exclusive title to, each
material item of Company Intellectual Property purported to be owned by Company
free and clear of any lien or encumbrance (excluding non-exclusive licenses and
related restrictions granted in the ordinary course). Without limiting the
foregoing: (i) Company is the exclusive owner of all trademarks and trade names
purported to be owned by Company used in connection with the operation or
conduct of the business of Company and its subsidiaries, including the sale,
distribution or provision of any services or Company Products by Company or its
subsidiaries; (ii) with respect to all trademarks and trade names not covered by
the preceding (i), Company has all rights and licenses necessary to use such
trademarks and trade names in connection with the operation or conduct of the
business of Company and its subsidiaries, including the sale, distribution or
provision of any services of Company Products by Company or its subsidiaries;
(iii) Company owns exclusively, and has good title to, all Copyrighted works
that are Company Products or which Company or any of its subsidiaries otherwise
purports to own; and (iv) to Company's knowledge, to the extent that any Patents
would be infringed by any Company Products, Company is the exclusive owner of
such Patents.
(e) To the extent that any material technology, software or
Intellectual Property has been developed or created independently or jointly by
a third party for Company or any of its subsidiaries or is incorporated into any
of the Company Products, Company has a written or electronic agreement with such
third party with respect thereto and Company thereby either (i) has obtained
ownership of, and is the exclusive owner of, or (ii) has obtained a license
(sufficient for the conduct of its business as currently conducted and as
proposed to be conducted) to such third party's Intellectual Property in such
work, material or invention by operation of law or by valid assignment or
license, to the fullest extent it is legally possible to do so.
(f) The Company Intellectual Property and other Intellectual
Property licensed or exploited by Company constitutes all the technology,
software and Intellectual Property Rights used
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in and/or necessary to the conduct of the business of the Company as it
currently is conducted and, to the knowledge of Company, as it is currently
planned or contemplated to be conducted by the Company, including, without
limitation, the design, development, manufacture, use, import and sale of
Company Products, except for items that may reasonably be expected to be
available for licensing on reasonable terms from third parties.
(g) No person who has licensed any technology, software or
Intellectual Property Rights to the Company has ownership rights or license
rights granted by Company to improvements made by the Company in such Technology
or Intellectual Property Rights.
(h) Neither Company nor any of its subsidiaries has transferred
ownership of, or granted any exclusive license with respect to, any Intellectual
Property that is or was Company Intellectual Property, to any third party, or
permitted Company's rights in such Company Intellectual Property to lapse or
enter the public domain.
(i) Section 2.19(i) of the Company Schedule lists all material
contracts, licenses and agreements to which Company or any of its subsidiaries
is a party: (i) with respect to Company Intellectual Property licensed or
transferred to any third party (other than end-user licenses or related support
and maintenance agreements in the ordinary course); or (ii) pursuant to which a
third party has licensed or transferred any material Intellectual Property to
Company (other than with respect to standard, generally commercially available
"off the shelf" products).
(j) All contracts, licenses and agreements material to the
business of the Company as currently conducted and relating to either (i)
Company Intellectual Property or (ii) Intellectual Property of a third party
licensed to Company or any of its subsidiaries, are in full force and effect
(other than those which have expired by their terms). The consummation of the
transactions contemplated by this Agreement will neither violate nor result in
the breach, modification, cancellation, termination or suspension of such
contracts, licenses and agreements. Each of Company and its subsidiaries is in
material compliance with, and has not materially breached any material term of
any such contracts, licenses and agreements and, to the knowledge of Company,
all other parties to such contracts, licenses and agreements are in compliance
with, and have not materially breached any term of, such contracts, licenses and
agreements. Following the Closing Date, the Surviving Corporation will be
permitted to exercise all of Company's rights under such contracts, licenses and
agreements to the same extent Company and its subsidiaries would have been able
to had the transactions contemplated by this Agreement not occurred and without
the payment of any additional amounts or consideration other than ongoing fees,
royalties or payments which Company would otherwise be required to pay. Neither
this Agreement nor the transactions contemplated by this Agreement, including
the assignment to Parent or Surviving Corporation by operation of law or
otherwise of any contracts or agreements to which the Company is a party, will
result in (i) either Parent's or the Surviving Corporation's granting to any
third party any right to or with respect to any material Intellectual Property
right owned by, or licensed to, either of them (other than the rights granted in
any contracts or agreements so assigned), (ii) either the Parent's or the
Surviving Corporation's being bound by, or subject to, any non-compete or other
material restriction on the operation or scope of their respective businesses or
(iii) either the Parent's or the Surviving Corporation being obligated to pay
any royalties or other material amounts to any third party in
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excess of those payable by Parent or Surviving Corporation, respectively, prior
to Closing (other than any royalties or other material amounts which Company
would have otherwise been required to pay had the transactions contemplated by
this Agreement not occurred). The foregoing sentence shall only apply with
respect to contracts of Company.
(k) The operation of the business of the Company and its
subsidiaries as such business currently is conducted or is contemplated to be
conducted by the Company or any of its subsidiaries, including without
limitation (i) Company's and its subsidiaries' design, development, manufacture,
distribution, reproduction, marketing or sale of the products or services of
Company and its subsidiaries (including Company Products) and (ii) the Company's
use of any product, device or process, has not, does not, and will not when
conducted by Parent and/or Surviving Corporation in substantially the same
manner following the Closing, infringe or misappropriate, to the knowledge of
Company with respect to patents, trademarks, service marks and trade names only,
the Intellectual Property of any third party or constitute unfair competition or
trade practices under the laws of any jurisdiction.
(l) Neither Company nor any of its subsidiaries has received
notice from any third party that the operation of the business of Company or any
of its subsidiaries or any act, product or service of Company or any of its
subsidiaries, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the laws
of any jurisdiction.
(m) To the knowledge of Company, there are no material
contracts, licenses or agreements between the Company and any other person with
respect to Company Intellectual Property under which there is any material
dispute regarding the scope of such agreement, or performance under such
agreement, including with respect to any payments to be made or received by the
Company thereunder.
(n) To the knowledge of Company, no person has or is infringing
or misappropriating any Company Intellectual Property.
(o) Company and each of its subsidiaries has taken reasonable
steps to protect Company's and its subsidiaries' rights in Company's
confidential information and trade secrets that it wishes to protect or any
trade secrets or confidential information of third parties provided to Company
or any of its subsidiaries under an obligation of confidentiality, and, without
limiting the foregoing, each of Company and its subsidiaries has and enforces a
policy requiring each employee and contractor to execute a proprietary
information/confidentiality agreement substantially in the form provided to
Parent and all current and former employees, contractors and consultants of
Company and any of its subsidiaries have executed such an agreement.
2.20 Agreements, Contracts and Commitments. Neither Company nor any of
its subsidiaries is a party to or is bound by:
(a) any employment or consulting agreement, contract or
commitment with any officer or director or higher level employee or member of
Company's Board of Directors, other than
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those that are terminable by Company or any of its subsidiaries on no more than
thirty (30) days' notice without liability or financial obligation to the
Company;
(b) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(c) any agreement of indemnification or any guaranty other than
any agreement of indemnification entered into in connection with the sale or
license or purchase of products or services in the ordinary course of business;
(d) any agreement, contract or commitment containing any
covenant limiting in any material respect the right of Company or any of its
subsidiaries to engage in any line of business or to compete with any person or
granting any exclusive distribution rights;
(e) any agreement, contract or commitment currently in force
relating to the disposition or acquisition by Company or any of its subsidiaries
after the date of this Agreement of a material amount of assets not in the
ordinary course of business or pursuant to which Company or any of its
subsidiaries has any material ownership interest in any corporation,
partnership, joint venture or other business enterprise other than Company's
subsidiaries;
(f) any dealer, distributor, joint marketing or development
agreement currently in force under which Company or any of its subsidiaries have
continuing material obligations to jointly market any product, technology or
service and which may not be canceled without penalty upon notice of ninety (90)
days or less, or any material agreement pursuant to which Company or any of its
subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by Company or
any of its subsidiaries and which may not be canceled without penalty upon
notice of ninety (90) days or less;
(g) any agreement, contract or commitment currently in force to
provide source code to any third party for any product or technology that is
material to Company and its subsidiaries taken as a whole;
(h) any material agreement, contract or commitment, other than
standard end-user license agreements and related maintenance and support
agreements entered into in the ordinary course of business, currently in force
to license any third party to manufacture or reproduce any Company product,
service or technology or any material agreement, contract or commitment
currently in force to sell or distribute any Company products, service or
technology except agreements with distributors or sales representative in the
normal course of business cancelable without penalty upon notice of ninety (90)
days or less and substantially in the form previously provided to Parent;
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(i) any mortgages, leases, indentures, guarantees, loans or
credit agreements, security agreements or other agreements or instruments
relating to the borrowing of money or extension of credit;
(j) any settlement agreement entered into within five (5) years
prior to the date of this Agreement; or
(k) any other agreement, contract or commitment that has a value
of $250,000 or more individually.
Neither Company nor any of its subsidiaries, nor to Company's knowledge
any other party to a Company Contract (as defined below), is in breach,
violation or default under, and neither Company nor any of its subsidiaries has
received written notice that it has breached, violated or defaulted under, any
of the material terms or conditions of any of the agreements, contracts or
commitments to which Company or any of its subsidiaries is a party or by which
it is bound that are required to be disclosed in the Company Schedule (any such
agreement, contract or commitment, a "COMPANY CONTRACT") in such a manner as
would permit any other party to cancel or terminate any such Company Contract,
or would reasonably be expected, either individually or in the aggregate, to
result in a Material Adverse Effect on Company.
2.21 Insurance. Company has provided or made available to Parent true,
correct and complete copies of all insurance policies and fidelity bonds to
which each of Company and its subsidiaries are a party or a beneficiary or named
insured, which are of the type and in amounts the Company believes are
appropriate for its business. There is no claim by Company or any of its
subsidiaries pending under any of the insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of Company and its subsidiaries as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds.
2.22 Opinion of Financial Advisor. Company has been advised in writing
by its financial advisor, Xxxxxxxxx Xxxxxxxx Inc., that in its opinion, as of
the date of this Agreement, the Exchange Ratio is fair to the stockholders of
Company from a financial point of view.
2.23 Board Approval. The Board of Directors of Company has, as of the
date of this Agreement, unanimously (except for director Xxxxx Xxxx who has
recused himself from substantive discussions and votes taken by the Board of
Directors of Company with respect to the transactions contemplated by this
Agreement) (i) approved and declared advisable this Agreement and has approved
the Merger and the other transactions contemplated hereby, (ii) determined that
the Merger is consistent with and in furtherance of the long-term business
strategy of Company and fair to, and in the best interests of, Company and its
stockholders and (iii) determined to recommended that the stockholders of
Company adopt and approve this Agreement and approve the Merger.
2.24 Vote Required. The affirmative vote of a majority of the votes that
holders of the outstanding shares of Company Common Stock are entitled to vote
with respect to the Merger is the only vote of the holders of any class or
series of Company's capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
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2.25 State Takeover Statutes. The Board of Directors of the Company has
approved the Merger, the Merger Agreement, the Company Voting Agreements, the
Option Agreement and the transactions contemplated hereby and thereby, and such
approval is sufficient to render inapplicable to the Merger, the Merger
Agreement, the Company Voting Agreements, the Option Agreement and the
transactions contemplated hereby and thereby the provisions of Section 203 of
the Delaware Law to the extent, if any, such section is applicable to the
Merger, the Merger Agreement, the Company Voting Agreements, the Option
Agreement and the transactions contemplated hereby and thereby. No other state
takeover statute or similar statute or regulation applies to or purports to
apply to the Merger, the Merger Agreement, the Company Voting Agreements, the
Option Agreement or the transactions contemplated hereby and thereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
Company, subject to such exceptions as are specifically disclosed in writing in
the disclosure letter and schedules thereto (each such exception referencing the
specific section number of this Article III to which it applies and each other
section number of this Article III to the extent such applicability is
reasonably apparent on the face of such exception), dated as of the date hereof
(the "PARENT SCHEDULE"), as follows:
3.1 Organization and Qualification; Subsidiaries. Each of Parent and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted, except
where the failure to do so would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect on Parent. Each of Parent
and its subsidiaries is in possession of all Approvals necessary to own, lease
and operate the properties it purports to own, operate or lease and to carry on
its business as it is now being conducted, except where the failure to have such
Approvals would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect on Parent. Each of Parent and its subsidiaries is
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that would not, either individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect on
Parent.
3.2 Certificate of Incorporation and Bylaws. Parent has previously
furnished to Company complete and correct copies of its Certificate of
Incorporation and Bylaws as amended to date (together, the "PARENT CHARTER
DOCUMENTS"). Such Parent Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Parent is
not in violation of any of the provisions of the Parent Charter Documents, and
no subsidiary of Parent is in violation of any of its equivalent organizational
documents.
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3.3 Capitalization.
(a) The authorized capital stock of Parent consists of (i)
100,000,000 shares of Parent Common Stock, par value $0.001 per share, and (ii)
5,000,000 shares of Preferred Stock, par value $0.001 per share (the "PARENT
PREFERRED STOCK").
(b) At the close of business on January 22, 2001, (i) 26,924,099
shares of Parent Common Stock were issued and outstanding, all of which are duly
authorized, validly issued, fully paid and non-assessable; (ii) no shares of
Parent Common Stock are held in the treasury of Parent or by its subsidiaries;
(iii) 4,585,707 shares of Parent Common Stock were reserved for issuance upon
the exercise of outstanding options to purchase Parent Common Stock under the
Parent's 1986 Stock Option Plan, 1995 Long-Term Incentive Plan, 1994 Director
Option Plan, 1993 Employee Stock Purchase Plan and 1999 Nonstatutory Stock
Option Plan; (iv) 363,421 shares of Parent Common Stock were reserved for
issuance upon the exercise of outstanding warrants to purchase Parent Common
Stock. As of the date hereof, no shares of Parent Preferred Stock were issued or
outstanding. Except as set forth in this Section 3.3(b), there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Parent or any of its
subsidiaries is a party or by which it is bound obligating Parent or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, any shares of capital stock, partnership interests or similar ownership
interests of Parent or any of its subsidiaries or obligating Parent or any of
its subsidiaries to grant, extend, or enter into any such subscription, option,
warrant, equity security, call, right, commitment or agreement.
(c) The authorized stock of Merger Sub consists of 1,000 shares
of common stock, par value $0.001 per share, all of which are duly authorized,
validly issued, fully paid and nonassessable and free of any preemptive rights
in respect thereof, and all of which are owned by Parent.
3.4 Parent Common Stock. The Parent Common Stock to be issued pursuant
to the Merger has been duly authorized and will, when issued in accordance with
this Agreement be validly issued, fully paid, and unassessable and will not be
subject to any restrictions on resale under the Securities Act, other than
restrictions imposed by Rule 145 under the Securities Act.
3.5 Authority Relative to this Agreement. Each of Parent and Merger Sub
has all necessary corporate power and authority to execute and deliver this
Agreement and, in the case of Parent, the Option Agreement and, subject to
obtaining the approval of the stockholders of Parent of the Share Issuance, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement by Parent and Merger Sub and of the Option Agreement by Parent and the
consummation by Parent and Merger Sub of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action on the part of Parent and Merger Sub, and no other corporate proceedings
on the part of Parent or Merger Sub are necessary to authorize this Agreement or
on the part of Parent to authorize the Option Agreement, or to consummate the
transactions so contemplated, subject only to the approval of the Share Issuance
by Parent's stockholders and the filing and recordation of the Certificate of
Merger as required by Delaware Law. Each of this
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Agreement and the Option Agreement has been duly and validly executed and
delivered by Parent and, in the case of this Agreement, Merger Sub and, assuming
the due authorization, execution and delivery by Company, constitute legal and
binding obligations of Parent and, in the case of this Agreement, Merger Sub,
enforceable against Parent and Merger Sub in accordance with their respective
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
3.6 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and the Option
Agreement by each of Parent and Merger Sub do not, and the performance of this
Agreement and the Option Agreement by each of Parent and Merger Sub will not,
(i) conflict with or violate the Parent Charter Documents or the equivalent
organizational documents of any of Parent's subsidiaries; (ii) subject to
obtaining the approval of Parent's stockholders of the Share Issuance and
compliance with the requirements set forth in Section 3.6(b) below, conflict
with, or result in any violation of, any law, rule, regulation, order, judgment
or decree applicable to Parent or any of its subsidiaries or by which either
Parent or any of its subsidiaries or any of their respective properties is bound
or affected; or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or impair Parent's or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a material lien or encumbrance on any of the properties or assets of
Parent or any of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or any of its subsidiaries is a
party or by which Parent or any of its subsidiaries or its or any of their
respective properties are bound or affected.
(b) The execution and delivery of this Agreement and the Option
Agreement by each of Parent and Merger Sub do not, and the performance of this
Agreement by each of Parent and Merger Sub will not, require any consent,
waiver, approval, authorization or permit of, or filing with or notification to,
any Governmental Entity, except (A) for applicable requirements, if any, of the
Securities Act, the Exchange Act, Blue Sky Laws, HSR Approval, the rules and
regulations of Nasdaq, state takeover laws and the filing and recordation of the
Certificate of Merger as required by Delaware Law and (B) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not reasonably be expected to have a Material
Adverse Effect on Parent or a material adverse effect on the ability of Parent
or Merger Sub to perform their respective obligations under this Agreement.
3.7 SEC Filings; Financial Statements.
(a) Parent has made available to Company a correct and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by Parent with the SEC on or after December 31, 1999 (the
"PARENT SEC REPORTS"), which are all the forms, reports and documents required
to be filed by Parent with the SEC since December 31, 1999. The Parent XXX
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Xxxxxxx (X) complied in all material respects as of their respective dates with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and (B) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. None of Parent's subsidiaries is required to file any reports or
other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Parent SEC Reports was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form 10-Q
of the Exchange Act) and each fairly presents the consolidated financial
position of Parent and its subsidiaries at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments that were not or are not expected to
be material in amount.
(c) Parent has previously furnished to Company a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Parent with the SEC
pursuant to the Securities Act or the Exchange Act.
3.8 No Undisclosed Liabilities. Neither Parent nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise) of
a nature required to be disclosed on a balance sheet or in the related notes to
the consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations or financial condition of Parent and its subsidiaries taken as a
whole, except (i) liabilities provided for in Parent's balance sheet as of
September 30, 2000, and (ii) liabilities incurred since September 30, 2000 in
the ordinary and usual course of business, consistent with past practice, none
of which would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on Parent.
3.9 Absence of Certain Changes or Events. Since September 30, 2000,
there has not been: (i) any Material Adverse Effect on Parent; (ii) any
declaration, setting aside or payment of any dividend on, or other distribution
(whether in cash, stock or property) in respect of, any of Parent's or any of
its subsidiaries' capital stock, or any purchase, redemption or other
acquisition by Parent of any of Parent's capital stock or any other securities
of Parent or its subsidiaries or any options, warrants, calls or rights to
acquire any such shares or other securities except for repurchases from
employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements; (iii) any split, combination
or reclassification of any of Parent's or any of its subsidiaries' capital
stock; (iv) any material change by Parent in its accounting methods, principles
or practices, except as required by concurrent changes in GAAP; or (v) any
revaluation by Parent of any of its assets, including, without limitation,
writing down the value of capitalized inventory or
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writing off notes or accounts receivable or any sale of assets of the Parent
other than in the ordinary course of business.
3.10 Absence of Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of Parent, threatened (or, to the
knowledge of Parent, any governmental or regulatory investigation pending or
threatened) against Parent or any of its subsidiaries or any properties or
rights of Parent or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign, except for any claims, actions, suits or proceedings which seek damages
of less than $50,000, do not seek injunctive relief and do not challenge or seek
to delay the transactions contemplated by this Agreement.
3.11 Registration Statement; Joint Proxy Statement/Prospectus. None of
the information supplied or to be supplied by Parent for inclusion or
incorporation by reference in (i) the S-4 will, at the time the S-4 becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading; and (ii) the Joint Proxy
Statement/Prospectus will, at the dates mailed to the stockholders of Company
and of Parent, at the time of the Company Stockholders' Meeting, the time of the
Parent Stockholders' Meeting and as of the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The S-4 will comply
as to form in all material respects with the provisions of the Securities Act
and the rules and regulations promulgated by the SEC thereunder. Notwithstanding
the foregoing, Parent makes no representation or warranty with respect to any
information supplied by the Company which is contained in any of the foregoing
documents.
3.12 Operations of Merger Sub. Merger Sub is a direct, wholly owned
subsidiary of Parent, was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement, has engaged in no other business
activities and has conducted its operations only as contemplated by this
Agreement.
3.13 Brokers. Except for fees payable to UBS Warburg LLC, Parent has not
incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby.
3.14 Intellectual Property. Parent owns each of the patents and patent
applications referred to in Parent SEC Reports and, except as set forth in the
Parent SEC Reports, (i) to the knowledge of Parent, Parent owns or possesses, or
could obtain ownership or possession of (on terms not materially adverse to the
consolidated financial position, stockholders' equity, or results of operations
of Parent) adequate and enforceable rights to use all other Intellectual
Property necessary for the conduct of its business, (ii) no claims are pending
or, to the knowledge of Parent, threatened that Parent is infringing on or
otherwise violating the rights of any person with regard to any Intellectual
Property that, if the subject of an unfavorable decision, ruling or finding,
could reasonably be expected to have a Material Adverse Effect and Parent knows
of no basis therefor, and (iii) to the knowledge of Parent, no person is
infringing on or otherwise violating any right of Parent with respect to any
Intellectual Property owned by or licensed to Parent.
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3.15 Opinion of Financial Advisor. Parent's Board of Directors has
received an opinion from UBS Warburg LLC, dated as of the date hereof to the
effect that as of the date hereof the Exchange Ratio is fair to Parent from a
financial point of view.
3.16 Board Approval. The Board of Directors of Parent has, as of the
date of this Agreement, (i) has determined that the Merger is consistent with
and in furtherance of the long-term business strategy of Parent and is fair to,
and in the best interests of, Parent and its stockholders; (ii) has approved
this Agreement, the Merger and the other transactions contemplated by this
Agreement; and (iii) has determined to recommend that the stockholders of Parent
approve the Share Issuance.
3.17 Vote Required. The affirmative vote of a majority of the shares of
Parent Common Stock that cast votes regarding the Share Issuance in person or by
proxy at the Parent Stockholders' Meeting is the only vote of the holders of any
class or series of Parent's capital stock necessary to approve this Agreement
and the transactions contemplated hereby.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Company. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Company and each of its
subsidiaries shall, except (i) as set forth in Section 4.1 of the Company
Schedule, (ii) in connection with specific actions that Company is explicitly
required to take pursuant to this Agreement or (iii) to the extent that Parent
shall otherwise consent in writing (which consent shall not be unreasonably
delayed), carry on its business, in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance with all
applicable laws and regulations, pay its debts and taxes when due subject to
good faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its commercially reasonable efforts consistent
with past practices and policies to (i) preserve intact its present business
organization, (ii) keep available the services of its present officers and
employees and (iii) preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings.
In addition, except (i) in connection with specific actions that Company
is explicitly required to take pursuant to this Agreement, (ii) as set forth in
Section 4.1 of the Company Schedule or (iii) to the extent that Parent shall
otherwise consent in writing (which consent shall not be unreasonably delayed),
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Company shall not do any of the following and shall not permit
its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or restricted stock, or reprice
options granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
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(b) Grant any severance or termination pay (cash, equity or
otherwise) to any officer or employee, except (x) pursuant to written agreements
outstanding, or policies existing, on the date hereof and (y) as previously
disclosed in writing to Parent in the Company Schedule, or adopt any new
severance plan;
(c) Transfer or license to any person or entity or otherwise
extend, amend or modify any rights to the Company Intellectual Property that are
material to the business of Company as currently conducted, or enter into grants
to transfer or license to any person future patent rights other than in the
ordinary course of business consistent with past practices, provided that in no
event shall Company license on an exclusive basis or sell any Company
Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of Company or its subsidiaries, except
repurchases of unvested shares at cost in connection with the termination of the
employment relationship with any employee pursuant to stock option or purchase
agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise
encumber or propose any of the foregoing with respect to, any shares of capital
stock or any securities convertible into shares of capital stock, or
subscriptions, rights, warrants or options to acquire any shares of capital
stock or any securities convertible into shares of capital stock, or enter into
other agreements or commitments of any character obligating it to issue any such
shares or convertible securities, other than (x) the issuance, delivery and/or
sale of shares of Company Common Stock pursuant to the exercise of stock options
outstanding as of the date of this Agreement or granted pursuant to clause (y)
hereof, and (y) the granting of stock options, in the ordinary course of
business and consistent with past practices, to newly hired employees in an
amount not to exceed options to purchase 100,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company
Charter Documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest in or a portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof, or otherwise acquire or
agree to acquire any assets or enter into any joint ventures, strategic
partnerships or alliances in any case for any amount in excess of $250,000;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets except sales of inventory in the ordinary course of
business consistent with past practice, except for the sale, lease or
disposition (other than through licensing) of property or assets which are not
material, individually or in the aggregate, to the business of Company and its
subsidiaries;
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(j) Incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of
Company, enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than in connection with the financing of ordinary
course trade payables consistent with past practice;
(k) Adopt or amend any employee benefit plan, policy or
arrangement, any employee stock purchase or employee stock option plan, or enter
into any employment contract or collective bargaining agreement (other than
offer letters and letter agreements entered into in the ordinary course of
business consistent with past practice with employees who are terminable "at
will"), pay any special bonus or special remuneration (cash, equity or
otherwise) to any director or employee (other than payments to non-officer
employees in accordance with past practice), or increase the salaries or wage
rates or fringe benefits (including rights to severance or indemnification) of
its directors, officers, employees or consultants (other than increases for
non-officer employees or consultants in accordance with past practice);
(l) (i) pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), or litigation (whether or not commenced prior to the
date of this Agreement) other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, or liabilities recognized or disclosed in the
most recent consolidated financial statements (or the notes thereto) of Company
included in the Company SEC Reports or incurred since the date of such financial
statements, or (ii) waive the benefits of, agree to modify in any manner,
terminate, release any person from or fail to enforce any confidentiality or
similar agreement to which Company or any of its subsidiaries is a party or of
which Company or any of its subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of
the ordinary course of business (including payments to financial, legal,
accounting or other professional service advisors, other than reasonable
payments to such professional service advisors in connection with the Merger and
the transactions contemplated thereby) in excess of $200,000;
(n) Except in the ordinary course of business consistent with
past practice, modify, amend or terminate any material contract or agreement to
which Company or any subsidiary thereof is a party or waive, delay the exercise
of, release or assign any material rights or claims thereunder;
(o) Except in the ordinary course of business consistent with
past practice, enter into any material contracts, agreements, or obligations
relating to the distribution, sale, license or marketing by third parties of
Company's products or products licensed by Company;
(p) Revalue any of its assets or, except as required by GAAP,
make any change in accounting methods, principles or practices;
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(q) Incur or enter into any agreement, contract or commitment
outside of the ordinary course of business in excess of $250,000 individually;
(r) Intentionally take any action that could reasonably be
expected to cause the Merger to fail to qualify as a "reorganization" under
Section 368(a) of the Code, whether or not otherwise permitted by the provisions
of this Article IV, or fail to take any action reasonably necessary to cause the
Merger to so qualify;
(s) Make any tax election that, individually or in the
aggregate, is reasonably likely to adversely affect in any material respect the
tax liability or tax attributes of Company or any of its subsidiaries or settle
or compromise any material income tax liability;
(t) Make any loan, advance or capital contribution to or
investment in any person (other than a subsidiary of Company) other than in the
ordinary course of business consistent with past practice, but in no event in
the amount (to persons other than subsidiaries) of more than $100,000 in the
aggregate, and other than investments in cash equivalents made in the ordinary
course of business consistent with past practice;
(u) Modify or amend in any manner that is adverse to Company, or
terminate, any confidentiality agreement entered into by Company or any
subsidiary in the ordinary course of business, or release or waive any material
rights for claims, or modify or amend in any manner adverse to Company, any
confidentiality, standstill or similar agreements to which Company or any of its
subsidiaries is a party;
(v) Engage in any action with the intent to directly or
indirectly adversely impact any of the transactions contemplated by this
Agreement;
(w) Agree in writing or otherwise to take any of the actions
described in Section 4.1(a) through (v) above.
4.2 Conduct of Business by Parent. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Parent shall not do any
of the following, except to the extent that Company shall otherwise consent in
writing (which consent shall not be unreasonably withheld or delayed), and shall
not permit its subsidiaries to do any of the following:
(a) Intentionally take any action that could reasonably be
expected to cause the Merger to fail to qualify as a "reorganization" under
Section 368(a) of the Code, whether or not otherwise permitted by the provisions
of this Article IV or fail to take any action reasonably necessary to cause the
Merger to so qualify;
(b) Declare, set aside or pay any dividends on or make any other
distributions in cash or property in respect of any capital stock;
(c) Cause, permit or propose any amendments to the Parent
Charter Documents (or similar governing instruments of any of its subsidiaries),
except as contemplated by this
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Agreement, that would have an adverse effect on the rights of the holders of
Parent Common Stock (including the Parent Common Stock to be issued in the
Merger);
(d) Revalue any of its assets or, except as required by GAAP,
make any changes in accounting methods, principles or practices;
(e) Agree in writing or otherwise to take any of the actions
described in Section 4.2(a) through (d) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Joint Proxy Statement/Prospectus; Registration Statement.
(a) As promptly as practicable after the execution of this
Agreement, Parent and Company shall jointly prepare and shall file with the SEC
a document or documents that will constitute (i) the prospectus forming part of
the registration statement on the S-4 and (ii) the Joint Proxy
Statement/Prospectus. Each of the parties hereto shall use all reasonable
efforts to cause the S-4 to become effective as promptly as practicable after
the date hereof, and, prior to the effective date of the S-4, the parties hereto
shall take all action required under any applicable Laws in connection with the
issuance of shares of Parent Common Stock pursuant to the Merger. Parent or
Company, as the case may be, shall furnish all information concerning Parent or
Company as the other party may reasonably request in connection with such
actions and the preparation of the S-4 and the Joint Proxy Statement/Prospectus.
As promptly as practicable after the effective date of the S-4, the Joint Proxy
Statement/Prospectus shall be mailed to the stockholders of Company and of
Parent. Each of the parties hereto shall cause the Joint Proxy
Statement/Prospectus to comply as to form and substance to such party in all
material respects with the applicable requirements of (i) the Exchange Act, (ii)
the Securities Act, and (iii) the rules and regulations of the Nasdaq. If at any
time prior to the Effective Time, any event relating to Parent or Company or any
of their respective affiliates, officers or directors should be discovered by
Parent or Company, as the case may be, which should be set forth in an amendment
to the S-4 or a supplement to the Joint Proxy Statement/Prospectus, Parent or
Company, as the case may be, shall promptly inform the other.
(b) The Joint Proxy Statement/Prospectus shall include (i) the
approval of this Agreement and the Merger and the recommendation of the Board of
Directors of Company to Company's stockholders that they vote in favor of
approval of this Agreement and the Merger, subject to the right of the Board of
Directors of the Company to withdraw its recommendation and recommend a Superior
Proposal determined to be such in compliance with Section 5.4 of this Agreement
and (ii) the opinion of Xxxxxxxxx Xxxxxxxx Inc. referred to in Section 2.22;
provided, however, that the Board of Directors of Company shall submit this
Agreement to Company's stockholders whether or not at any time subsequent to the
date hereof such board determines that it can no longer make such
recommendation. The Joint Proxy Statement/Prospectus shall also include (i) the
approval of the Share Issuance and the recommendation of the Board of Directors
of Parent to Parent's stockholders that they vote in favor of approval of the
Share Issuance and (ii) the opinion of UBS Warburg LLC referred to in Section
3.8.
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(c) No amendment or supplement to the Joint Proxy
Statement/Prospectus or the S-4 shall be made without the approval of Parent and
Company, which approval shall not be unreasonably withheld or delayed. Each of
the parties hereto shall advise the other parties hereto, promptly after it
receives notice thereof, of the time when the S-4 has become effective or any
supplement or amendment has been filed, of the issuance of any stop order, of
the suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or of any
request by the SEC for amendment of the Joint Proxy Statement/Prospectus or the
S-4 or comments thereon and responses thereto or requests by the SEC for
additional information.
5.2 Stockholder Meetings. Company shall call and hold the Company
Stockholders' Meeting and Parent shall call and hold the Parent Stockholders'
Meeting as promptly as practicable after the date hereof for the purpose of
voting upon the approval of this Agreement and the Merger or the Share Issuance,
as the case may be, pursuant to the Joint Proxy Statement/Prospectus, and Parent
and Company shall use all reasonable efforts to hold the Parent Stockholders'
Meeting and the Company Stockholders' Meeting on the same day and as soon as
practicable after the date on which the S-4 becomes effective. Nothing herein
shall prevent Company or Parent from adjourning or postponing the Company
Stockholders' Meeting or the Parent Stockholders' Meeting, as the case may be,
if there are insufficient shares of Company Common Stock or Parent Common Stock,
as the case may be, necessary to conduct business at their respective meetings
of the stockholders. Unless Company's Board of Directors has withdrawn its
recommendation of this Agreement and the Merger in compliance with Section 5.4,
Company shall use all reasonable best efforts to solicit from its stockholders
proxies in favor of the approval of this Agreement and the Merger pursuant to
the Joint Proxy Statement/Prospectus and shall take all other action necessary
or advisable to secure the vote or consent of stockholders required by Delaware
Law or applicable stock exchange requirements to obtain such approval. Parent
shall use all reasonable best efforts to solicit from its stockholders proxies
in favor of the Share Issuance pursuant to the Joint Proxy Statement/Prospectus
and shall take all other action necessary or advisable to secure the vote or
consent of stockholders required by the Delaware Law or applicable stock
exchange requirements to obtain such approval. Company shall call and hold the
Company Stockholders' Meeting for the purpose of voting upon the approval of
this Agreement and the Merger whether or not Company's Board of Directors at any
time subsequent to the date hereof determines that this Agreement is no longer
advisable or recommends that Company's stockholders reject it.
5.3 Confidentiality; Access to Information.
(a) The parties acknowledge that Company and Parent have
previously executed a Confidentiality Agreement, dated as of December 27, 2000
(the "CONFIDENTIALITY AGREEMENT"), which Confidentiality Agreement will continue
in full force and effect in accordance with its terms.
(b) Each of the Company and Parent will afford the other and the
other's accountants, counsel and other representatives reasonable access to its
properties, books, records and personnel during the period prior to the
Effective Time to obtain all information concerning its business as such other
party may reasonably request. No information or knowledge obtained in any
investigation pursuant to this Section 5.3 will affect or be deemed to modify
any representation or
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warranty contained herein or the conditions to the obligations of the parties to
consummate the Merger.
5.4 No Solicitation.
(a) From and after the date of this Agreement until the
Effective Time or termination of this Agreement pursuant to Article VII, Company
and its subsidiaries will not, nor will they authorize or permit any of their
respective officers, directors, controlled affiliates or employees or any
investment banker, attorney or other advisor or representative retained by any
of them to, directly or indirectly, (i) solicit, initiate, induce or knowingly
encourage the making, submission or announcement of any Acquisition Proposal (as
defined below), (ii) participate in any discussions or negotiations with a third
party regarding, or furnish to any person any information with respect to, or
take any other action to knowingly facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal, (iii) engage in discussions with any person with respect
to any Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition
Proposal or (v) enter into any letter of intent or similar document or any
contract, agreement or commitment contemplating or otherwise relating to any
Acquisition Transaction (as defined below); provided, however, that nothing
contained in this Section 5.4 shall prohibit the Board of Directors of Company
from (i) complying with Rule 14d-9 or 14e-2(a) promulgated under the Exchange
Act or (ii) in response to an unsolicited, bona fide written Acquisition
Proposal that Company's Board of Directors reasonably concludes constitutes a
Superior Proposal (as defined below), engaging in discussions or participating
in negotiations with and furnishing information to the party making such
Acquisition Proposal and approving, endorsing or recommending such Acquisition
Proposal and withdrawing its recommendation of this Agreement and the Merger to
the extent (A) the Board of Directors of Company determines in good faith after
consultation with its outside legal counsel (who may be Company's independent
legal counsel acting with respect to this Agreement) its fiduciary obligations
under applicable law require it to do so, (B) (x) at least three (3) (which
shall include at least two (2) business days) days prior to furnishing any such
nonpublic information to, or entering into discussions or negotiations with,
such party, Company gives Parent written notice of Company's intention to
furnish nonpublic information to, or enter into discussions or negotiations
with, such party and (y) Company receives from such party an executed
confidentiality agreement containing customary limitations on the use and
disclosure of all nonpublic written and oral information furnished to such party
by or on behalf of Company, and (C) contemporaneously with furnishing any such
nonpublic information to such party, Company furnishes such nonpublic
information to Parent (to the extent such nonpublic information has not been
previously furnished by the Company to Parent). Company and its subsidiaries
will immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in this Section 5.4 by any officer,
director, controlled affiliate or employee of Company or any of its subsidiaries
or any investment banker, attorney or other advisor or representative of Company
or any of its subsidiaries shall be deemed to be a breach of this Section 5.4 by
Company.
For purposes of this Agreement, (A) "ACQUISITION PROPOSAL" shall mean
any offer or proposal (other than an offer or proposal by Parent) relating to
any Acquisition Transaction. For the
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purposes of this Agreement; (B) "ACQUISITION TRANSACTION" shall mean any
transaction or series of related transactions other than the transactions
contemplated by this Agreement involving: (1) any acquisition or purchase from
the Company by any person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) of more than a 15%
interest in the total outstanding voting securities of the Company or any of its
subsidiaries or any tender offer or exchange offer that if consummated would
result in any person or "group" (as defined under Section 13(d) of the Exchange
Act and the rules and regulations thereunder) beneficially owning 15% or more of
the total outstanding voting securities of the Company or any of its
subsidiaries or any merger, consolidation, business combination or similar
transaction involving the Company pursuant to which the stockholders of the
Company immediately preceding such transaction hold less than 85% of the equity
interests in the surviving or resulting entity of such transaction; (2) any
sale, lease (other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than 15% of the assets of the Company; or (3) any
liquidation, dissolution, recapitalization or other significant corporate
reorganization of the Company; and (C) "SUPERIOR PROPOSAL" shall mean an
Acquisition Proposal with respect to which (x) Company's Board of Directors
shall have reasonably determined (based upon the advice of Company's independent
financial advisors) that the acquiring party is capable of consummating
(including, if relevant, obtaining any necessary financing) the proposed
Acquisition Transaction on the terms proposed, and (y) Company's Board of
Directors shall have reasonably determined that the proposed Acquisition
Transaction provides greater value to the stockholders of Company than the
Merger (based upon the advice of Company's independent financial advisors).
(b) In addition to the obligations of Company set forth in
paragraph (a) of this Section 5.4, Company as promptly as practicable, and in
any event within one (1) business day, shall advise Parent orally and in writing
of any request for information which Company reasonably believes would lead to
an Acquisition Proposal or of any Acquisition Proposal, or any inquiry with
respect to or which Company reasonably should believe would lead to any
Acquisition Proposal, the material terms and conditions of such request,
Acquisition Proposal or inquiry, and the identity of the person or group making
any such request, Acquisition Proposal or inquiry. Company will keep Parent
informed in all material respects of the status and details (including material
amendments or proposed amendments) of any such request, Acquisition Proposal or
inquiry. In addition to the foregoing, Company shall (i) provide Parent with at
least one (1) business day prior notice (or such lesser prior notice as provided
to the members of Company's Board of Directors but in no event less than eight
(8) hours) of any meeting of Company's Board of Directors at which Company's
Board of Directors is reasonably expected to consider an Acquisition Proposal
and (ii) provide Parent with at least two (2) business days prior written notice
of a meeting of Company's Board of Directors at which Company's Board of
Directors is reasonably expected to recommend a Superior Proposal to its
stockholders and together with such notice a copy of the definitive
documentation relating to such Superior Proposal.
5.5 Public Disclosure. Parent and Company will consult with each other
and agree before issuing any press release or otherwise making any public
statement with respect to the Merger, this Agreement or an Acquisition Proposal
and will not issue any such press release or make any such public statement
prior to such agreement, except as may be required by law or any listing
agreement with a national securities exchange, in which case reasonable efforts
to consult with the other party
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will be made prior to any such release or public statement. The parties have
agreed to the text of the joint press release announcing the signing of this
Agreement.
5.6 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including using commercially reasonable efforts
to accomplish the following: (i) the taking of all reasonable acts necessary to
cause the conditions precedent set forth in Article VI to be satisfied, (ii) the
obtaining of all necessary actions or nonactions, waivers, consents, approvals,
orders and authorizations from Governmental Entities and the making of all
necessary registrations, declarations and filings (including registrations,
declarations and filings with Governmental Entities, if any) and the taking of
all reasonable steps as may be necessary to avoid any suit, claim, action,
investigation or proceeding by any Governmental Entity, (iii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iv) the
defending of any suits, claims, actions, investigations or proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
the transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (v) the execution or delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement. In connection with and without
limiting the foregoing, Company and its Board of Directors shall, if any state
takeover statute or similar statute or regulation is or becomes applicable to
the Merger, this Agreement, the Company Voting Agreements, the Option Agreement
or any of the transactions contemplated hereby and thereby, use commercially
reasonable efforts to ensure that the Merger, this Agreement, the Company Voting
Agreements, the Option Agreement and the other transactions contemplated hereby
and thereby may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger, this Agreement, the Company Voting
Agreements, the Option Agreement and the transactions contemplated hereby and
thereby. Notwithstanding anything herein to the contrary, nothing in this
Agreement shall be deemed to require Parent or Company or any subsidiary or
affiliate thereof to agree to any divestiture by itself or any of its affiliates
of shares of capital stock or of any business, assets or property, or the
imposition of any material limitation on the ability of any of them to conduct
their business or to own or exercise control of such assets, properties and
stock.
(b) Company shall give prompt notice to Parent of any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate, or any failure of Company to comply with or satisfy in any
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement, in each case, such that the conditions set forth in
Section 6.3(a) or 6.3(b) would not be satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
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(c) Parent shall give prompt notice to Company of any
representation or warranty made by it or Merger Sub contained in this Agreement
becoming untrue or inaccurate, or any failure of Parent or Merger Sub to comply
with or satisfy in any respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement, in each case, such that
the conditions set forth in Section 6.2(a) or 6.2(b) would not be satisfied;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
5.7 Third Party Consents. As soon as practicable following the date
hereof, Parent and Company will each use commercially reasonable efforts to
obtain any consents, waivers and approvals under any of its or its subsidiaries'
respective agreements, contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby.
5.8 Stock Options; 401(k) Plan; Employee Benefit Matters.
(a) At the Effective Time, Parent shall assume all options to
purchase Common Stock issued by the Company pursuant to the Company Option
Plans, whether vested or unvested and whether exercisable or unexercisable,
provided, however, that no option shall be assumed if, as of immediately prior
to the Effective Time, the exercise price per share is $14.87 or greater (each a
"COMPANY OPTION"). The Company's repurchase right with respect to any unvested
shares acquired by the exercise of Company Options shall be assigned to Parent
by virtue of the Merger and without any further action on the part of the
Company or the holder of the outstanding Company Option. Immediately after the
Effective Time, each Company Option outstanding immediately prior to the
Effective Time shall be deemed to constitute an option to acquire, on the same
terms and conditions as were applicable under such Company Option at the
Effective Time, such number of shares of Parent Common Stock as is equal to the
number of shares of Company Common Stock subject to the unexercised portion of
such option multiplied by the Exchange Ratio, rounded down to the nearest whole
number. The exercise price per share of each such assumed Company Option shall
be equal to the exercise price of such option immediately prior to the Effective
Time divided by the Exchange Ratio, rounded up to the nearest whole cent. The
term, vesting schedule, status as an "incentive stock option" under Section 422
of the Code, if applicable, and all of the other terms of the Company Options
shall otherwise remain unchanged. It is the intention of the parties that the
Company Options so assumed by Parent qualify following the Effective Time as
incentive stock options as defined in Section 422 of the Code to the extent such
Company Options qualified as incentive stock options prior to the Effective
Time. Within 30 business days after the Effective Time, Parent will issue to
each person who, immediately prior to the Effective Time, was a holder of a
Company Option assumed by Parent a document evidencing the foregoing assumption
of such option by Parent.
(b) 401(k) Plans. Effective as of the day immediately preceding
the Closing Date, the Company and its Affiliates, as applicable, shall each
terminate any and all plans intended to include a Code Section 401(k)
arrangement (unless Parent provides written notice to the Company that such
401(k) plan(s) shall not be terminated). Unless Parent provides such written
notice to the Company, no later than five business days prior to the Closing
Date, the Company shall provide
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Parent with evidence that such 401(k) plan(s) have been terminated (effective as
of the day immediately preceding the Closing Date) pursuant to resolutions of
the Company's Board of Directors. The form and substance of such resolutions
shall be subject to review and approval of Parent. The Company also shall take
such other actions in furtherance of terminating such 401(k) Plan(s) as Parent
may reasonably require.
(c) ESPP. The rights of participants in the Company ESPP with
respect to any offering then underway under the Company ESPP shall be determined
by treating the last business day prior to the Effective Time as the last day of
such offering and by making such other pro rata adjustments as may be necessary
to reflect the shortened offering but otherwise treating such shortened offering
as a fully effective and completed offering for all purposes under the Company
ESPP. Outstanding rights to purchase shares of Company Common Stock shall be
exercised in accordance with Section 13(b) of the Company ESPP, and each share
of Company Common Stock purchased pursuant to such exercise shall by virtue of
the Merger, and without any action on the part of the holder thereof, be
converted into the right to receive a number of shares of Parent Common Stock
equal to the Exchange Ratio, without issuance of certificates representing
issued and outstanding shares of Company Common Stock to participants under the
Company ESPP. As of the Effective Time, the Company ESPP shall be terminated.
Prior to the Effective Time, Company shall (i) provide Parent with evidence that
the Company ESPP has been terminated pursuant to resolutions of Company's Board
of Directors; the form and substance of such resolutions shall be subject to
prior review and approval of Parent and (ii) take such other actions (including,
but not limited to, if appropriate, amending the Company ESPP) that are
necessary to give effect to the transaction contemplated by this Section 5.8(c).
Employees of Company who become employees of Parent shall be eligible to
participate in the employee stock purchase plan of Parent (the "PARENT ESPP")
(subject to such plan's terms and conditions) at a special offering period
beginning at the Effective Time.
(d) Employee Benefit Matters. All employees of Company shall
continue on their existing benefit plans until such time as, in Parent's sole
discretion, an orderly transition can be accomplished to employee benefit plans
and programs maintained by Parent for its and its affiliates' employees. Parent
shall take such reasonable actions, to the extent permitted by Parent's benefits
programs, as are necessary to allow eligible employees of Company to participate
in the health, welfare and other employee benefits (it being understood that
equity incentive plans and tax qualified plans are not considered employee
benefits) programs of Parent or alternative benefits programs that are, in the
aggregate, substantially similar to those applicable to employees of Parent in
similar functions and positions on similar terms. Pending such action, Parent
shall maintain the effectiveness of Company's benefit plans.
5.9 Form S-8. Parent agrees to file, if available for use by Parent, a
registration statement on Form S-8 for the shares of Parent Common Stock
issuable with respect to assumed Company Stock Options within thirty (30) days
following the Closing.
5.10 Indemnification.
(a) From and after the Effective Time, Parent will cause to be
maintained in effect in all respects the current obligations of Company pursuant
to any indemnification agreements
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between Company and its directors and officers in effect immediately prior to
the Effective Time and any indemnification provisions under the Company Charter
Documents as in effect on the date hereof. The Certificate of Incorporation and
Bylaws of the Surviving Corporation will contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
indemnified parties thereunder (the "INDEMNIFIED PARTIES") as those contained in
the Company Charter Documents as in effect on the date hereof, which provisions
will not be amended, repealed or otherwise modified for a period of six (6)
years from the Effective Time in any manner that would adversely affect the
rights thereunder of the Indemnified Parties, unless such modification is
required by law.
(b) For a period of six (6) years after the Effective Time,
Parent will cause the Surviving Corporation to maintain in effect, if available,
directors' and officers' liability insurance covering those persons who are
currently covered by the Company's directors' and officers' liability insurance
policy on terms comparable to those applicable to the current directors and
officers of the Company; provided, however, that in no event will Parent or the
Surviving Corporation be required to expend an annual premium for such coverage
in excess of 150% of the annual premium currently paid by the Company, it being
understood that Parent shall nevertheless be obligated to provide such coverage
as may be obtained for such 150% amount.
(c) This Section 5.10 is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
respective successors and assigns. In the event Parent or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or (ii)
transfers all or substantially all its properties and assets to any person,
then, and in each case, proper provision shall be made so that the successors
and assigns of Parent or the Surviving Corporation, as the case may be, honor
the indemnification obligations set forth in this Section 5.10.
5.11 Nasdaq Listing. Parent agrees to authorize for listing on Nasdaq
the shares of Parent Common Stock issuable, and those required to be reserved
for issuance, in connection with the Merger, upon official notice of issuance.
5.12 Affiliates. Set forth in Section 5.12 of the Company Schedule is a
list of those persons who may be deemed to be, in Company's reasonable judgment,
affiliates of Company within the meaning of Rule 145 promulgated under the
Securities Act (each, a "COMPANY AFFILIATE"). Company will provide Parent with
such information and documents as Parent reasonably requests for purposes of
reviewing such list. Company will use its commercially reasonable efforts to
deliver or cause to be delivered to Parent, as promptly as practicable on or
following the date hereof, from each Company Affiliate an executed affiliate
agreement in substantially the form attached hereto as Exhibit F (the "COMPANY
AFFILIATE AGREEMENT"). Parent will be entitled to place appropriate legends on
the certificates evidencing any Parent Common Stock to be received by a Company
Affiliate pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the Parent Common Stock,
consistent with the terms of the Company Affiliate Agreement.
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5.13 Regulatory Filings; Reasonable Efforts. As soon as may be
reasonably practicable, Company and Parent each shall file with the United
States Federal Trade Commission (the "FTC") and the Antitrust Division of the
United States Department of Justice ("DOJ") Notification and Report Forms
relating to the transactions contemplated herein as required by the HSR Act, as
well as comparable pre-merger notification forms required by the merger
notification or control laws and regulations of any applicable jurisdiction, as
agreed to by the parties. Company and Parent each shall promptly (a) supply the
other with any information which may be required in order to effectuate such
filings and (b) supply any additional information which reasonably may be
required by the FTC, the DOJ or the competition or merger control authorities of
any other jurisdiction and which the parties may reasonably deem appropriate;
provided, however, that Parent shall not be required to agree to any divestiture
by Parent or the Company or any of Parent's subsidiaries or affiliates of shares
of capital stock or of any business, assets or property of Parent or its
subsidiaries or affiliates or of the Company, its affiliates, or the imposition
of any material limitation on the ability of any of them to conduct their
businesses or to own or exercise control of such assets, properties and stock
(assuming for purposes of determining materiality in this Section 5.13 that the
Merger shall have been effected).
5.14 Parent Board of Directors. The Board of Directors of Parent will
take all actions necessary such that one member of Company's Board of Directors
reasonably acceptable to Parent (which initially shall be Xxxx Xxxxxx, provided
that he has executed an employment agreement with Parent which shall be in full
force and effect as of the Effective Time), shall be appointed as a director and
co-Chairman of Parent's Board of Directors as of the Effective Time with a term
expiring at the next annual meeting of Parent's stockholders after such
appointment.
5.15 Obligations of Merger Sub. Parent shall take all action necessary
to cause Merger Sub to perform its obligations under this Agreement and to
consummate the Merger on the terms and conditions set forth in this Agreement.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) Stockholder Approvals. This Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of Company. The Share
Issuance shall have been approved by the requisite vote under applicable Nasdaq
rules by the stockholders of Parent.
(b) Registration Statement Effective; Joint Proxy Statement. The
SEC shall have declared the S-4 effective. No stop order suspending the
effectiveness of the S-4 or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of the Joint
Proxy Statement/Prospectus, shall have been initiated or threatened in writing
by the SEC.
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(c) No Order; HSR Act. No Governmental Entity shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
waiting periods, if any, under the HSR Act relating to the transactions
contemplated hereby will have expired or terminated early and all material
foreign antitrust approvals required to be obtained prior to the Merger in
connection with the transactions contemplated hereby shall have been obtained.
(d) Tax Opinions. Parent and Company shall each have received
written opinions from their respective tax counsel (Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, Professional Corporation, and Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP, respectively), in form and substance reasonably
satisfactory to them, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code and such
opinions shall not have been withdrawn; provided, however, that if the counsel
to either Parent or Company does not render such opinion, this condition shall
nonetheless be deemed to be satisfied with respect to such party if counsel to
the other party renders such opinion to such party. The parties to this
Agreement agree to make such reasonable representations as requested by such
counsel for the purpose of rendering such opinions.
(e) Nasdaq Listing. The shares of Parent Common Stock issuable
to the stockholders of Company pursuant to this Agreement and such other shares
required to be reserved for issuance in connection with the Merger shall have
been authorized for listing on Nasdaq upon official notice of issuance.
6.2 Additional Conditions to Obligations of Company. The obligation of
Company to consummate and effect the Merger shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of
which may be waived, in writing, exclusively by Company:
(a) Representations and Warranties. Each representation and
warranty of Parent and Merger Sub contained in this Agreement (i) shall have
been true and correct in all respects as of the date of this Agreement and (ii)
shall be true and correct on and as of the Closing Date with the same force and
effect as if made on the Closing Date except, in the case of clauses (i) and
(ii), (A) for such failures to be true and correct that do not in the aggregate
constitute a Material Adverse Effect on Parent and Merger Sub, or, with respect
to representations and warranties contained in Sections 3.3, 3.16 and 3.17, that
are not material, and (B) for those representations and warranties which address
matters only as of a particular date (which representations shall have been true
and correct (subject to the qualifications set forth in the preceding clause
(A)) as of such particular date) (it being understood that, for purposes of
determining the accuracy of such representations and warranties, (i) all
"Material Adverse Effect" qualifications and other qualifications based on the
word "material" or similar phrases contained in such representations and
warranties shall be disregarded and (ii) any update of or modification to the
Parent Schedule made or purported to have been made after the date of this
Agreement shall be disregarded). Company shall have received a certificate with
respect to the foregoing signed on behalf of Parent by an authorized officer of
Parent.
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(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and Company shall have received a certificate to such
effect signed on behalf of Parent by an authorized officer of Parent.
(c) No Parent Material Adverse Effect. No Material Adverse
Effect on Parent shall have occurred from the date of this Agreement. Company
shall have received a certificate with respect to the foregoing signed on behalf
of Parent by the Chief Executive Officer of Parent.
(d) Election of Director. The Board of Directors of Parent shall
have elected Xxxx Xxxxxx as a director and co-Chairman of the Board of Directors
of Parent contingent upon, and effective as of, the Closing; provided, however,
that the conditions set forth in Section 5.14 are satisfied.
6.3 Additional Conditions to the Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) Representations and Warranties. Each representation and
warranty of Company contained in this Agreement (i) shall have been true and
correct in all respects as of the date of this Agreement and (ii) shall be true
and correct on and as of the Closing Date with the same force and effect as if
made on and as of the Closing Date except, in the case of clauses (i) and (ii),
(A) for such failures to be true and correct that do not in the aggregate
constitute a Material Adverse Effect on the Company or, with respect to
representations and warranties contained in Sections 2.3, 2.23, 2.24 and 2.25,
that are not material, and (B) for those representations and warranties which
address matters only as of a particular date (which representations shall have
been true and correct (subject to the qualifications set forth in the preceding
clause (A)) as of such particular date) (it being understood that, for purposes
of determining the accuracy of such representations and warranties, (i) all
"Material Adverse Effect" qualifications and other qualifications based on the
word "material" or similar phrases contained in such representations and
warranties shall be disregarded and (ii) any update of or modification to the
Company Schedule made or purported to have been made after the date of this
Agreement shall be disregarded). Parent shall have received a certificate with
respect to the foregoing signed on behalf of Company by an authorized officer of
Company.
(b) Agreements and Covenants. Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of Company by the Chief Executive Officer of Company.
(c) Other Agreements. The Option Agreement shall remain in full
force and effect, and the Employment Agreements by and among Parent, Company and
at least three (3) of the following four (4) officers, Xxxx Xxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxx Xxxxxx and Xxxxxx Xxxxxxx, which three (3) shall include both
Xxxx Xxxxxx and Xxxxxxx Xxxxxxxx, shall remain in full force and effect unless
due to death or disability.
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(d) No Company Material Adverse Effect. No Material Adverse
Effect on Company shall have occurred from the date of this Agreement. Parent
shall have received a certificate with respect to the foregoing signed on behalf
of Company by the Chief Executive Officer of Company.
(e) Consents. Company shall have obtained the consents, waivers
and approvals required in connection with the consummation of the transactions
contemplated hereby in connection with the agreements, contracts, licenses or
leases set forth on Section 6.3(e) of the Company Schedule.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after the requisite approval of the
stockholders of Company:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and Company;
(b) by either Company or Parent if the Merger shall not have
been consummated by June 30, 2001 for any reason; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal cause
of or resulted in the failure of the Merger to occur on or before such date and
such action or failure to act constitutes (i) a material breach of this
Agreement or (ii) a material acquisition or proposed acquisition by Parent;
(c) by either Company or Parent if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger, which order, decree, ruling or other action is final and
nonappealable;
(d) by either Company or Parent if (i) the required approval of
the stockholders of Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Company stockholders duly convened therefor or at any adjournment therefor or
(ii) the required approval by the stockholders of Parent of the Share Issuance
required under applicable Nasdaq rules shall not have been obtained by reason of
the failure to obtain the required vote at a meeting of Parent stockholders duly
convened therefor or at any adjournment thereof;
(e) by Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or if
any representation or warranty of Parent shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Parent's representations and warranties or breach by Parent is
curable by Parent, then Company may not
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terminate this Agreement under this Section 7.1(e) for so long as Parent
continues to exercise best efforts to cure such breach;
(f) by Parent, upon a breach of any representation, warranty,
covenant or agreement on the part of Company set forth in this Agreement, or if
any representation or warranty of Company shall have become untrue, in either
case such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Company's representations and warranties or breach by Company is
curable by Company, then Parent may not terminate this Agreement under this
Section 7.1(f) for so long as Company continues to exercise best efforts to cure
such breach; or
(g) by Parent, if (i) the Board of Directors of Company
withdraws, modifies or changes its recommendation of this Agreement or the
Merger in a manner adverse to Parent or its stockholders, (ii) the Board of
Directors of Company shall have recommended to the stockholders of Company an
Acquisition Proposal, (iii) the Company fails to comply with Section 5.4 in all
material respects, (iv) an Acquisition Proposal shall have been announced or
otherwise become publicly known and the Board of Directors of Company shall have
(A) failed to recommend against acceptance of such by its stockholders
(including by taking no position, or indicating its inability to take a
position, with respect to the acceptance by its stockholders of an Acquisition
Proposal involving a tender offer or exchange offer) or (B) failed to reconfirm
its approval and recommendation of this Agreement and the transactions
contemplated hereby within five business days thereafter, or (v) the Board of
Directors of Company resolves to take any of the actions described above.
7.2 Notice of Termination; Effect of Termination. Any termination of
this Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto
(or such later time as may be required by Section 7.1). In the event of the
termination of this Agreement as provided in Section 7.1, this Agreement shall
be of no further force or effect, except (i) as set forth in this Section 7.2,
Section 5.3(a), Section 7.3 and Article VIII, each of which shall survive the
termination of this Agreement, and (ii) nothing herein shall relieve any party
from liability for fraud in connection with, or any willful breach of, this
Agreement.
7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3, all fees
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Parent and Company
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred (i) in relation to the printing and filing of the
Joint Proxy Statement/Prospectus (including any preliminary materials related
thereto) and the S-4 (including financial statements and exhibits) and any
amendments or supplements thereto or (ii) for the premerger notification and
report forms under the HSR Act.
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(b) Termination Fee.
(i) In the event that (A) Parent shall terminate this
Agreement pursuant to Section 7.1(g), or (B) this Agreement shall be terminated
(x) pursuant to Section 7.1(b) or (y) pursuant to Section 7.1(d)(i) and (1) at
or prior to such termination, there shall exist or have been publicly proposed a
bona fide Acquisition Proposal relating to a Company Acquisition with a person
or group reasonably capable of consummating a Company Acquisition and (2) within
12 months after such termination, Company shall enter into a definitive
agreement with respect to any Company Acquisition or any Company Acquisition
shall be consummated, then, in the case of clause (A), promptly after such
termination, or in the case of clause (B), concurrently with the execution of a
definitive agreement with respect to, or the consummation of, as applicable,
such Company Acquisition, Company shall pay to Parent $6.7 million in cash (the
"TERMINATION FEE").
(ii) The Company acknowledges that the agreements
contained in this Section 7.3(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent would
not enter into this Agreement; accordingly, if the Company fails to pay in a
timely manner the amounts due pursuant to this Section 7.3(b) and, in order to
obtain such payment, Parent makes a claim that results in a judgment against the
Company for the amounts set forth in this Section 7.3(b), the Company shall pay
to Parent its costs and expenses (including reasonable attorneys' fees and
expenses) in connection with such suit, together with interest on the amounts
set forth in this Section 7.3(b) at the prime rate of Citibank N.A. in effect on
the date such payment was required to be made. Payment of the fees described in
this Section 7.3(b) shall not be in lieu of damages incurred in the event of
breach of this Agreement. For the purposes of this Agreement, "COMPANY
ACQUISITION" shall mean any of the following transactions (other than the
transactions contemplated by this Agreement): (A) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company pursuant to which the stockholders of the
Company immediately preceding such transaction hold less than 60% of the
aggregate equity interests in the surviving or resulting entity of such
transaction, (B) a sale or other disposition by the Company of assets
representing in excess of 40% of the aggregate fair market value of the
Company's business immediately prior to such sale or (C) the acquisition by any
person or group (including by way of a tender offer or an exchange offer or
issuance by the Company), directly or indirectly, of beneficial ownership or a
right to acquire beneficial ownership of shares representing in excess of 40% of
the voting power of the then outstanding shares of capital stock of the Company.
7.4 Amendment. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of Parent, Merger Sub and Company.
7.5 Extension; Waiver. At any time prior to the Effective Time, any
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set
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forth in an instrument in writing signed on behalf of such party. Delay in
exercising any right under this Agreement shall not constitute a waiver of such
right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations and Warranties. The representations and
warranties of Company, Parent and Merger Sub contained in this Agreement shall
terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) or by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Proxim, Inc.
000 XxXxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Day
Telecopy No.: (000) 000-0000
and to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
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(b) if to Company, to:
Netopia, Inc.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
8.3 Interpretation; Definitions.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity.
(b) For purposes of this Agreement:
(i) the term "KNOWLEDGE" means with respect to a party
hereto, with respect to any matter in question, actual knowledge of the
executive officers of such party after reasonable inquiry;
(ii) the term "MATERIAL ADVERSE EFFECT" when used in
connection with an entity means any change, event, violation, inaccuracy,
circumstance or effect that is, or is reasonably likely to be, materially
adverse to the business, assets, liabilities, financial condition,
capitalization, or results of operations of such entity and its subsidiaries
taken as a whole; provided, however, that in no event shall (A) a decrease in
such entity's stock price or the failure to meet or exceed Wall Street research
analysts' or such entity's internal earnings or other estimates or projections
in and of itself constitute a Material Adverse Effect or (B) any change, event,
violation, inaccuracy, circumstance or effect that such entity successfully
bears the burden of proving results from (x) changes affecting the industry in
which such entity operates generally (which changes do not
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disproportionately affect such entity) or (y) changes affecting the United
States economy generally, constitute a Material Adverse Effect; provided
further, that in no event shall the following be taken into account in
determining whether there has been or will be a Material Adverse Effect: (1) any
adverse change, effect, event, occurrence, state of facts or development to the
extent primarily and directly attributable to the announcement or pendency of
the Merger (including any cancellations of or delays in customer orders, any
reductions in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees that is so attributable), provided,
however, that the party claiming that such change, effect, event, occurrence,
state of fact or development does not constitute a Material Adverse Effect shall
bear the burden of showing that it is primarily and directly attributable to the
announcement or pendency of the Merger, or (2) any litigation commenced or
threatened against Company or Parent or any member of the Board of Directors of
Company or Parent in respect of this Agreement; and
(iii) the term "PERSON" shall mean any individual,
corporation (including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization, entity or Governmental Entity.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Schedule and the
Parent Schedule (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect until the Closing and shall survive any
termination of this Agreement; and (b) are not intended to confer upon any other
person any rights or remedies hereunder, except as specifically provided in
Section 5.10.
8.6 Severability. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of
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this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to seek 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 having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
[Remainder of Page Intentionally Left Blank]
*****
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
PROXIM, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ALK ACQUISITION CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
NETOPIA, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[SIGNATURE PAGE OF AGREEMENT AND PLAN OF MERGER AND REORGANIZATION]
