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EXHIBIT 2.4
AGREEMENT AND PLAN OF MERGER
dated as of February 9, 2000
by and among
AETHER SYSTEMS, INC.,
RT ACQUISITION, INC.
and
RIVERBED TECHNOLOGIES, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS................................................................................................1
Section 1.1 Definitions.............................................................................1
ARTICLE II. THE MERGER...............................................................................................10
Section 2.1 The Merger.............................................................................10
Section 2.2 Effective Time of the Merger...........................................................10
Section 2.3 Closing................................................................................10
Section 2.4 Effects of the Merger..................................................................10
Section 2.5 Certificate of Incorporation and Bylaws................................................10
Section 2.6 Directors of the Surviving Corporation.................................................11
Section 2.7 Officers of the Surviving Corporation..................................................11
ARTICLE III. CONVERSION OF SECURITIES................................................................................12
Section 3.1 Conversion of Capital Stock of Merger Sub..............................................12
Section 3.2 Conversion of Riverbed Capital Stock...................................................12
Section 3.3 Conversion of Riverbed Options.........................................................12
Section 3.4 General Conversion Mechanics...........................................................12
Section 3.5 Exchange of Certificates...............................................................13
Section 3.6 Escrow Shares..........................................................................14
Section 3.7 Dividends, Fractional Shares, Etc......................................................14
Section 3.8 Tax Treatment..........................................................................16
Section 3.9 Appraisal Rights.......................................................................16
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF RIVERBED...............................................................17
Section 4.1 Organization and Qualifications; Subsidiaries..........................................17
Section 4.2 Articles of Incorporation or Charter and Bylaws........................................17
Section 4.3 Capitalization.........................................................................17
Section 4.4 Authority Relative to This Agreement...................................................18
Section 4.5 No Conflict; Required Filings and Consents; Certain Contracts..........................18
Section 4.6 Financial Statements...................................................................19
Section 4.7 Absence of Certain Changes or Events...................................................20
Section 4.8 Conformity with Law; Relations with Governments; Litigation............................20
Section 4.9 Employee Benefit Plans and Related Matters; ERISA......................................20
Section 4.10 Labor and Employment Matters...........................................................23
Section 4.11 Insurance..............................................................................23
Section 4.12 Brokers................................................................................24
Section 4.13 Taxes..................................................................................24
Section 4.14 Environmental Matters..................................................................25
Section 4.15 Intellectual Property..................................................................26
Section 4.16 Books and Records......................................................................29
Section 4.17 Transactions with Affiliates...........................................................29
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Section 4.18 Opinion of Financial Advisor...........................................................29
Section 4.19 Reliance...............................................................................30
Section 4.20 Disclosure.............................................................................30
Section 4.21 Material Contracts.....................................................................30
Section 4.22 Year 2000..............................................................................30
Section 4.23 Distribution...........................................................................31
Section 4.24 Real Property..........................................................................31
Section 4.25 Personal Property......................................................................31
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF AETHER AND MERGER SUB...................................................32
Section 5.1 Organization and Qualifications; Subsidiaries..........................................32
Section 5.2 Charter and Bylaws.....................................................................32
Section 5.3 Capitalization.........................................................................32
Section 5.4 Authority Relative to This Agreement...................................................33
Section 5.5 No Conflict; Required Filings and Consents.............................................33
Section 5.6 SEC Reports and Financial Statements...................................................34
Section 5.7 Brokers................................................................................35
Section 5.8 Conformity with Law; Relations with Governments; Litigation............................35
Section 5.9 Transactions with Affiliates...........................................................35
Section 5.10 Merger Sub.............................................................................35
Section 5.11 Reliance...............................................................................35
Section 5.12 Disclosure.............................................................................35
Section 5.13 Absence of Changes.....................................................................36
Section 5.14 Information Supplied...................................................................36
ARTICLE VI. COVENANTS................................................................................................37
Section 6.1 Notification of Certain Matters........................................................37
Section 6.2 Further Action, Reasonable Efforts; Consents and Approvals.............................37
Section 6.3 Regulatory Filings.....................................................................37
Section 6.4 Conduct of Business of Riverbed Pending the Closing....................................38
Section 6.5 Conduct of Business of Aether Pending the Closing......................................40
Section 6.6 Nasdaq Listing.........................................................................40
Section 6.7 Access to Information..................................................................41
Section 6.8 No Solicitation........................................................................41
Section 6.9 Riverbed Stockholder Meeting...........................................................42
Section 6.10 Preparation of the Disclosure Statements...............................................42
Section 6.11 Cooperation with Accountants...........................................................43
Section 6.12 Public Announcements...................................................................43
Section 6.13 Blue Sky...............................................................................43
Section 6.14 Registration Rights....................................................................43
Section 6.15 General Indemnification................................................................44
Section 6.16 Stockholder's Representative...........................................................44
Section 6.17 Indemnification Procedures.............................................................45
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Section 6.18 Exclusive Remedy.......................................................................47
Section 6.19 Directors' and Officers' Indemnification and Insurance.................................48
Section 6.20 Tax-Free Reorganization................................................................49
Section 6.21 Board Representation...................................................................49
Section 6.22 Notification of Certain Matters........................................................50
ARTICLE VII. CONDITIONS TO THE MERGER................................................................................51
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.............................51
Section 7.2 Conditions to Obligations of Riverbed to Effect the Merger.............................51
Section 7.3 Conditions to Obligations of Aether and Merger Sub to Effect the Merger................52
ARTICLE VIII. TERMINATION, WAIVER, AMENDMENT AND CLOSING.............................................................54
Section 8.1 Termination............................................................................54
Section 8.2 Effect of Termination..................................................................55
Section 8.3 Amendment or Supplement................................................................55
Section 8.4 Extension of Time, Waiver, Etc.........................................................55
Section 8.5 Termination Fee........................................................................56
ARTICLE IX. MISCELLANEOUS............................................................................................57
Section 9.1 Governing Law..........................................................................57
Section 9.2 Entire Agreement.......................................................................57
Section 9.3 Modification; Waiver...................................................................57
Section 9.4 Notices................................................................................57
Section 9.5 Expenses...............................................................................59
Section 9.6 Assignment.............................................................................59
Section 9.7 Survival of Representations, Warranties and Covenants..................................59
Section 9.8 Severability...........................................................................59
Section 9.9 Successors and Assigns; Third Parties..................................................59
Section 9.10 Counterparts...........................................................................59
Section 9.11 Interpretation; References.............................................................60
Section 9.12 Dispute Resolution and Jurisdiction....................................................60
Section 9.13 Exhibits, Schedules and Disclosure Letter..............................................60
Section 9.14 Attorneys' Fees........................................................................60
Section 9.15 WAIVER OF JURY TRIAL...................................................................60
Section 9.16 Further Assurances.....................................................................61
Section 9.17 Negotiation of Agreement...............................................................61
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EXHIBITS
Exhibit A -- [RESERVED]
Exhibit B -- Form of Legal Opinion of Xxxxxx, Xxxxxx & Xxxxxxxxx, Counsel to
Aether and Merger Sub
Exhibit C -- Form of Legal Opinion of Xxxx Xxxxxxx, Counsel to Riverbed
Exhibit D -- Form of Registration Rights Agreement
Exhibit E -- Form of Voting Agreement
Exhibit F -- Form of Tax Representation Letters
Exhibit G -- Form of Escrow Agreement
Exhibit H -- Form of Employment Agreement
Exhibit I -- [RESERVED]
Exhibit J -- Form of Certificate of Incorporation of Surviving Corporation
Exhibit K -- Form of Bylaws of Surviving Corporation
Exhibit L -- Form of Confirmation and Non-Compete Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 9, 2000 (the
"Agreement"), by and among AETHER SYSTEMS, INC., a Delaware corporation
("Aether"), RT ACQUISITION, INC., a Delaware corporation and a wholly-owned
direct subsidiary of Aether ("Merger Sub"), and RIVERBED TECHNOLOGIES, INC., a
Delaware corporation ("Riverbed").
WHEREAS, Aether, Merger Sub and Riverbed have determined that the merger
of Merger Sub and Riverbed on the terms set forth herein (the "Merger") is
advisable and in the best interests of their respective corporations and
stockholders and their respective boards of directors have approved this
Agreement;
WHEREAS, to satisfy a condition to Aether and Riverbed entering into this
Agreement and incurring the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, Persons holding approximately 90% of
Riverbed's voting securities have entered into a Voting Agreement with Aether
and Riverbed pursuant to which they have each agreed, among other things, to
vote for the Merger and grant a proxy to officers of Aether with respect to the
Merger; and
WHEREAS, by executing this Agreement, the parties intend to adopt a plan
of reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions. The capitalized terms used in this Agreement and not
otherwise defined shall have the following meanings (unless the context
otherwise requires, such capitalized terms shall include the singular and plural
and the conjunctive and disjunctive forms of the terms defined):
"Acquisition Proposal" shall have the meaning set forth in Section 6.8.
"Aether Common Stock" shall mean Common Stock, par value $.01 per share,
of Aether.
"Aether Disclosure Letter" shall mean the letter dated as of the date of
this Agreement from Aether and Merger Sub to Riverbed and attaching the
schedules referred to in this Agreement.
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"Aether Indemnified Party" means Aether or any of its Subsidiaries as an
Indemnified Party.
"Aether Option" shall mean an Option of Aether.
"Aether SEC Reports" shall have the meaning set forth in Section 5.6.
"Aether Stock Plans" shall have the meaning set forth in Section 5.3.
"Affiliate" shall mean, as to any Person, any other Person
controlling, controlled by, or under common control with such Person.
"Appraisal Shares" shall have the meaning set forth in Section 3.9.
"Average Aether Stock Price" with respect to any period shall mean (i)
the sum of the daily closing sales prices per share of Aether Common Stock on
the Nasdaq National Market as reported in The Wall Street Journal (and confirmed
by the Aether Financial Advisor) for each of the Trading Days in the period
divided by (ii) the number of Trading Days in the period.
"Benefit Arrangement" shall mean any benefit arrangement, obligation, or
practice, whether or not legally enforceable, to provide benefits (other than
merely as salary or under a Benefit Plan), as compensation for services
rendered, to present or former directors, employees, agents, or independent
contractors, including, but not limited to, employment or consulting agreements,
severance agreements or pay policies, executive or incentive compensation
programs or arrangements, sick leave, vacation pay, plant closing benefits,
salary continuation for disability, workers' compensation, retirement, deferred
compensation, bonus, stock option or purchase, tuition reimbursement or
scholarship programs, employee discount programs, meals, travel, or vehicle
allowances, any plans subject to Section 125 of the Code, and any plans
providing benefits or payments in the event of a change of control, change in
ownership or effective control, or sale of a substantial portion (including all
or substantially all) of the assets of any business or portion thereof, in each
case with respect to any present or former employees, directors, or agents.
"Benefit Plan" shall mean an employee benefit plan as defined in Section
3(3) of ERISA, together with plans or arrangements that would be so defined if
they were not (i) otherwise exempt from ERISA by that or another section, (ii)
maintained outside the United States, or (iii) individually negotiated or
applicable only to one person.
"Blue Sky Laws" shall mean the securities laws of the states of the
United States as currently in effect.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in Baltimore, Maryland or New York City, New
York are not required to be open.
"Certificate of Merger" shall have the meaning set forth in Section 2.2.
"Certificate" shall have the meaning set forth in Section 3.4.
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"Claim Notice" shall have the meaning set forth in Section 6.17.
"Claims" shall have the meaning set forth in Section 6.17.
"Closing" shall have the meaning set forth in Section 2.3.
"Closing Date" shall have the meaning set forth in Section 2.3.
"COBRA" shall have the meaning set forth in Section 4.9.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidential Information" shall have the meaning set forth in Section
6.7.
"Confirmation and Non-Compete Agreement" means a confirmation and
non-compete agreement substantially in the form of Exhibit L.
"Consents" shall have the meaning set forth in Section 6.2.
"Contract" shall mean, with respect to any Person, any contract,
contractual right, note, bond, indenture, lease, license, permit, franchise,
deed of trust, mortgage, loan agreement or other document, instrument,
obligation or agreement, oral or written, to which such Person or any of its
Subsidiaries is a party or by which any of them or their assets or properties is
bound or affected.
"Damages" shall have the meaning set forth in Section 6.15.
"Date-Sensitive System" means any software programs, microcode, hardware,
system, device or component that processes (including, accepting as input,
sequencing, calculating, storing, displaying and generating as output any date
information or information from or dependent on date information, whether
performed on a stand-alone basis or in combination with any other software
program, microcode, hardware, system, device or component) any date information
and any data that is derived from or dependent on date information.
"DGCL" means the General Corporation Law of the State of Delaware.
"Disclosure Letter" shall mean the letter dated as of the date of this
Agreement from Riverbed to Aether and Merger Sub and attaching the schedules
referred to in this Agreement.
"Effective Day" shall mean the day on which the Effective Time occurs.
"Effective Time" shall have the meaning set forth in Section 2.2.
"Employment Agreements" shall mean the employment agreements or
amendments to employment agreements between certain officers of Riverbed, as
identified by Aether, and Riverbed, Merger Sub and or Aether in substantially
the form of Exhibit H.
"EPA" shall have the meaning set forth in Section 4.13.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and all regulations and rules issued thereunder, or any successor
law.
"ERISA Affiliate" shall mean any person or entity that, together with the
entity referenced, would be or was at any time treated as a single employer
under Code Section 414 or ERISA Section 4001 (including any entities excluded
from the definition because they are not subject to U.S. jurisdiction) and any
general partnership of which such entity is or has been a general partner.
"Escrow Agent" shall mean Branch Bank & Trust Company, a North Carolina
banking association.
"Escrow Agreement" shall mean the escrow agreement to be entered into by
the parties hereto, the Stockholders' Representative, and the Escrow Agent,
substantially in the form of Exhibit G.
"Escrow Shares" shall have the meaning set forth in Section 3.6.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall have the meaning set forth in Section 3.5.
"GAAP" shall mean generally accepted accounting principles.
"Governmental Authority" shall mean any government or any agency, bureau,
board, commission, court, judicial or quasi-judicial body, department,
authority, official, political subdivision, tribunal or other instrumentality of
any government, whether Federal, state or local, domestic or foreign.
"HSR Act" shall have the meaning set forth in Section 4.5.
"HSR Filings" shall have the meaning set forth in Section 6.3.
"IRS" shall mean the United States Internal Revenue Service or any
successor agency.
"Indemnified Officers/Directors" shall have the meaning set forth in
Section 6.19.
"Indemnified Party" shall have the meaning set forth in Section 6.17.
"Indemnifying Party" shall have the meaning set forth in Section 6.17.
"Intellectual Property" means (i) all patents, trademarks, trade names,
service marks, trade dress, copyrights and any renewal rights therefor, mask
works, schematics, technology, inventions, manufacturing processes, supplier
lists, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
moral rights, computer software programs or applications (in both source and
object code form), and all applications, renewals and registrations for any of
the foregoing; (ii) all software and firmware listings, and updated software
source code, and complete system build software and
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instructions related to all software described herein; (iii) all documents,
records and files relating to design, end user documentation, manufacturing,
quality control, sales, marketing or customer support for all intellectual
property described herein; (iv) all other tangible or intangible proprietary
information and materials owned or held by or on behalf of the
intellectual-property holder.
"Knowledge" shall mean, with respect to any party, the actual knowledge
of all directors or officers, including without limitation the Chief Executive
Officer, President, Secretary, Treasurer, Chief Financial Officer, Chief
Operating Officer, Comptroller, Chief Technology Officer, Assistant Secretary,
and any Senior Vice President of each such party as well as any knowledge of any
fact or circumstance that would have or should have come to the attention of any
such director or officer in the course of discharging his or her duties in a
reasonable and prudent manner consistent with sound business practices.
"Law" shall mean any law, statute, rule, regulation, ordinance, decree or
order of any Governmental Authority.
"Leases" shall have the meaning set forth in Section 4.24.
"Letter of Transmittal" shall have the meaning set forth in Section 3.5.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, sublease, lien, adverse claim, levy, charge, option, right of others or
restriction (whether on voting, sale, transfer, disposition or otherwise) or
other encumbrance of any kind, whether imposed by agreement, understanding, law
or equity, or any conditional sale contract, title retention contract or other
contract to give or to refrain from giving any of the foregoing.
"Losses" shall have the meaning set forth in Section 6.19.
"Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on (i) the validity or enforceability of this Agreement,
(ii) the ability of such Person to perform its obligations under this Agreement
or (iii) the business, properties (including intangible properties), assets or
liabilities, prospects, financial condition or results of operations of the
Person and its Subsidiaries, taken as a whole other than (a) changes or effects
which are or result from occurrences relating to the economy in general or any
Person's industry in general and (x) not specifically relating to such Person or
(y) that affect such Person materially disproportionately relative to other
similarly-situated participants in such Person's industry, (b) changes or
effects which result from the loss of customers or delay or cancellation or
cessation of orders for any Person's products directly attributable to the
announcement of this Agreement provided that such losses, delays or
cancellations were not reasonably foreseeable to such Person as of the date of
this Agreement, (c) liabilities incurred in connection with this Agreement or
the transactions contemplated hereby, or (d) solely as a result of the decline
in the market price of the shares Aether Common Stock.
"Material Contracts" shall have the meaning set forth in Section 4.21.
"Measurement Period" means the period beginning on January 27, 2000
through and ending on the Trading Day that is the Trading Day prior to the date
of this Agreement
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"Merger" shall have the meaning set forth in the preamble to this
Agreement.
"Merger Consideration" shall have the meaning set forth in Section 3.2.
"Merger Filing" shall have the meaning set forth in Section 2.2.
"Multiemployer Plan" means any plan described in ERISA Section 3(37).
"Nasdaq" means the Nasdaq Stock Market.
"Notice Period" shall have the meaning set forth in Section 6.17.
"Notices" shall have the meaning set forth in Section 9.4.
"Option" shall mean, with respect to any Person, any option, warrant,
call, subscription, convertible or exchangeable security or other right,
agreement, arrangement or commitment of any kind or character to which such
Person or any of its Subsidiaries is a party relating to the issued or unissued
capital stock of such Person or any of its Subsidiaries, or obligating such
Person or any of its Subsidiaries to issue, transfer, grant or sell any shares
of capital stock of, or other equity interest in, or securities convertible into
or exchangeable for any capital stock or other equity interest in, such Person
or any of its Subsidiaries.
"Option Exchange Ratio" shall have the meaning set forth in Section 3.3.
"Organizational Documents" shall mean (i) with respect to a corporation
or association, its certificate or articles of incorporation or association and
bylaws, (ii) with respect to any limited liability company, its certificate of
formation, articles of organization, regulations, operating agreement and
limited liability company agreement, as applicable, (iii) with respect to any
limited partnership, its certificate of limited partnership and limited
partnership agreement, (iv) with respect to any general partnership, its
partnership agreement, and (v) all other similar organizational documents.
"Palm Computing Contracts" means the Joint Development & Distribution
Agreement dated September 1, 1999 by and between Riverbed and Palm Computing,
Inc., a subsidiary of 3Com Corporation, and the Reseller Agreement dated
September 1, 1999 by and between Riverbed and Palm Computing, Inc., a subsidiary
of 3Com Corporation.
"Permitted Liens" shall mean (a) Liens for taxes, assessments, or similar
charges, incurred in the ordinary course of business that are not yet due and
payable; (b) pledges or deposits made in the ordinary course of business; (c)
Liens of mechanics, materialmen, warehousemen or other like Liens securing
obligations incurred in the ordinary course of business that are not yet due and
payable; and (d) similar Liens and encumbrances which are incurred in the
ordinary course of business and which do not in the aggregate materially detract
from the value of such assets or properties or materially impair the use thereof
in the operation of such business.
"Person" shall mean any natural person, corporation, general partnership,
limited partnership, limited liability company, limited liability partnership,
proprietorship, trust, union,
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association, court, tribunal, agency, government, department, commission,
self-regulatory organization, arbitrator, board, bureau, instrumentality or
other entity, enterprise, authority or business organization.
"Qualified Plan" shall mean any Riverbed Plan intended to meet the
requirements of Section 401(a) of the Code, including any previously terminated
plan.
"Real Property" shall have the meaning set forth in Section 4.24.
"Registration Rights Agreement" means a registration rights agreement
substantially in the form of Exhibit D.
"Related Employer" means Riverbed and every ERISA Affiliate.
"Representatives" means, with respect to any Person, the officers,
directors, employees, auditors and other agents and representatives of such
Person.
"Requisite Regulatory Approvals" shall have the meaning set forth in
Section 4.5.
"Riverbed Benefit Arrangement" shall mean any Benefit Arrangement any
Related Employer sponsors or maintains or with respect to which any Related
Employer has or may have any current or future liability (whether actual,
contingent, with respect to any of its assets or otherwise), in each case with
respect to any present or former service providers to any Related Employer.
"Riverbed Capital Stock" shall mean the Riverbed Common Stock, Riverbed
Preferred Stock, and any other capital stock of Riverbed other than Riverbed
Options.
"Riverbed Common Stock" shall mean the common stock, par value $.01 per
share, of Riverbed.
"Riverbed Companies" shall mean Riverbed and any subsidiary of Riverbed
that currently has or previously had employees.
"Riverbed Financial Advisor" shall have the meaning set forth in Section
4.11.
"Riverbed Indemnified Party" means Riverbed or any of its Subsidiaries or
its stockholders as an Indemnified Party.
"Riverbed Intellectual Property" means all Intellectual Property, other
than Third Party Intellectual Property, that is being, has been, or is
reasonably anticipated by Riverbed to be, used, or is currently under
development for use, in the business of Riverbed or its Subsidiaries.
"Riverbed Meeting" shall have the meaning set forth in Section 6.9.
"Riverbed Option" shall mean an Option of Riverbed.
"Riverbed Plan" shall mean any Benefit Plan that any Related Employer
maintains or has maintained or to which any Related Employer is obligated to
make payments or has or may have
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any liability, in each case with respect to any present or former employees of
any Related Employer.
"Riverbed Preferred Stock" shall mean the Series A and the Series B
preferred stock of Riverbed convertible into Riverbed Common Stock.
"Riverbed Third Party Consents" shall have the meaning set forth in
Section 4.21.
"Riverbed Stockholder Approval" shall have the meaning set forth in
Section 6.9.
"SEC" shall mean the Securities and Exchange Commission or any successor
commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stockholder Representative" shall mean Hooks Xxxxxxxx and Xxxx Xxxxxx.
"Subsidiary" of an entity shall mean any entity (i) required by GAAP to
be consolidated in the financial statements of such entity or (ii) over 50% of
whose voting securities are controlled directly or indirectly by a single
entity.
"Surviving Corporation" shall have the meaning set forth in Section 2.1.
"Tax" or "Taxes" shall mean all Federal, state, local and foreign taxes
and other assessments and governmental charges of a similar nature (whether
imposed directly or through withholdings), including any interest, penalties and
additions to tax applicable thereto.
"Tax Returns" shall mean all Federal, state, local and foreign returns,
declarations, statements, reports, schedules, forms and information returns
relating to Taxes, and all amendments thereto.
"Third Party Intellectual Property" means all Intellectual Property owned
by or on behalf of persons other than Riverbed or its Subsidiaries that is
being, has been, or is reasonably anticipated by Riverbed to be, used, or is
currently under development for use, in the business of Riverbed or its
Subsidiaries.
"Trading Day" shall mean a day on which Aether Common Stock is traded on
the Nasdaq.
"Transactions" shall mean the transactions contemplated by this Agreement
in ARTICLE II.
"Voting Agreement" means a voting agreement substantially in the form of
Exhibit E.
"Year 2000 Compliant" means: (i) with respect to date information and any
data that are derived from or dependent on date information, that such date
information and data are in proper format and unambiguous for all dates before,
on or after January 1, 2000 (including taking into account leap year
considerations); and (ii) with respect to Date-Sensitive Systems, that each such
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Date-Sensitive System correctly processes all date information and any data that
are derived from or dependent on date information for all dates before, on or
after January 1, 2000 (including taking into account leap year considerations)
without any loss of functionality, interoperability or performance, and whether
used on a stand-alone basis or in combination with any other software,
microcode, hardware, system, device or component, assuming, in each case, that
each item of date information and data derived from or dependant on date
information that is passed to the Date-Sensitive System by any other software,
microcode, hardware, system, device or component is Year 2000 Compliant.
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ARTICLE II.
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time, in accordance with the DGCL, Merger Sub
shall be merged with and into Riverbed in accordance with this Agreement and the
separate existence of Merger Sub shall cease. Riverbed shall be the surviving
corporation in the Merger (hereinafter sometimes referred to as the "Surviving
Corporation").
Section 2.2 Effective Time of the Merger. Upon the terms and subject to
the conditions hereof, a certificate of merger (the "Certificate of Merger")
shall be duly prepared, executed and acknowledged by the Surviving Corporation
and thereafter delivered to the Secretary of State of the State of Delaware, for
filing on the Closing Date (as defined in Section 2.3). The Merger shall become
effective as of the date and at such time as the Certificate of Merger pursuant
to Section 252 of the DGCL and any other documents necessary to effect the
Merger in accordance with the DGCL are duly filed (the "Merger Filing") with the
Secretary of State of the State of Delaware or at such subsequent date or time
as shall be agreed by Aether and Riverbed and specified in the Certificate of
Merger (the time the Merger becomes effective pursuant to the DGCL being
referred to herein as the "Effective Time").
Section 2.3 Closing. Subject to the satisfaction or waiver of all of the
conditions to closing contained in ARTICLE VII, the closing of the Merger (the
"Closing") will take place at such time and such date as specified by the
parties, which shall be no later than the first Business Day after the
satisfaction or waiver of the conditions to Closing contained in ARTICLE VII, at
the offices of Xxxxxx, Xxxxxx & Xxxxxxxxx, 0000 X Xxxxxx, XX, Xxxxxxxxxx, X.X.
00000, unless another date, time or place is agreed to in writing by the parties
hereto. The date and time at which the Closing occurs is referred to herein as
the "Closing Date."
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of Riverbed and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Riverbed and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
Section 2.5 Certificate of Incorporation and Bylaws. Subject to Section
6.19, the Certificate of Incorporation of the Surviving Corporation shall be in
the form set forth in Exhibit J to this Agreement. The Bylaws of the Surviving
Corporation shall be in substantially the form set forth in Exhibit K to this
Agreement.
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Section 2.6 Directors of the Surviving Corporation. The directors of the
Surviving Corporation shall be as set forth on Schedule 2.6 to the Aether
Disclosure Letter, each to hold office from the Effective Time in accordance
with the Certificate of Incorporation and Bylaws of the Surviving Corporation
and until his or her successor is duly elected and qualified.
Section 2.7 Officers of the Surviving Corporation. The officers of the
Surviving Corporation shall be as set forth on Schedule 2.7 to the Aether
Disclosure Letter, each to hold office from the Effective Time in accordance
with the Certificate of Incorporation and Bylaws of the Surviving Corporation
and until his or her successor is duly appointed and qualified.
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ARTICLE III.
CONVERSION OF SECURITIES
Section 3.1 Conversion of Capital Stock of Merger Sub. At the Effective
Time, each issued and outstanding share of common stock, par value $0.01 per
share, of Merger Sub shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
Section 3.2 Conversion of Riverbed Capital Stock.
(a) Except as otherwise provided in Section 3.4(b), Section 3.6, and
Section 3.9, at the Effective Time, each issued and outstanding share of
Riverbed Capital Stock shall be converted into the right to receive in the case
of each share of Riverbed Common Stock, 0.4221 (such number, as adjusted in
accordance with Section 3.7(g) the "Exchange Ratio"), of a validly issued, fully
paid and nonassessable share of Aether Common Stock, provided that the foregoing
Exchange Ratio assumes the conversion into Riverbed Common Stock of all issued
and outstanding shares of Riverbed Preferred Stock prior to Closing. The shares
of Aether Common Stock to be issued to a particular holder of shares of Riverbed
Capital Stock under this conversion formula shall be referred to as such
holder's "Merger Consideration."
Section 3.3 Conversion of Riverbed Options.
(a) Subject to Section 3.4(b) and Section 3.9, at the Effective Time,
each issued and outstanding Riverbed Option shall be converted into the right to
receive an Aether Option, with terms and conditions substantially similar to the
Riverbed Option, except that (i) each such Riverbed Option will be exercisable
for that number of whole shares (and no fractional shares, for which cash shall
be paid pursuant to Section 3.7(b)) of Aether Common Stock equal to the product
of the number of shares of Riverbed Common Stock that were issuable upon the
exercise of such Riverbed Stock Option multiplied by 0.4221 (the "Option
Exchange Ratio") and (ii) the per share exercise price for the shares of Aether
Common Stock issuable upon the exercise of such Riverbed Stock Option will be
equal to the quotient determined by dividing the exercise price per share of
Riverbed Common Stock at which such Riverbed Stock Option would have been
exercisable immediately prior to the Effective Time by the Option Exchange
Ratio, rounded up to the nearest whole cent; provided, however, that the
foregoing conversions would be adjusted with respect to Options that qualify as
incentive stock options under Section 422 of the Code to the extent necessary to
preserve their treatment as such.
Section 3.4 General Conversion Mechanics.
(a) As a result of the Merger and without any action on the part of
the holders thereof, at the Effective Time, all shares of Riverbed Capital Stock
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each holder of shares of Riverbed Capital Stock
shall thereafter cease to have any rights with respect to such shares of
Riverbed Capital Stock, except (i) the right to receive, without interest, the
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Merger Consideration and cash for fractional shares of Aether Capital Stock in
accordance with Section 3.2 upon the surrender of a certificate that,
immediately prior to the Effective Time, represented an outstanding share or
shares of Riverbed Capital Stock (a "Certificate"); or (ii) the appraisal rights
described in Section 3.9.
(b) Notwithstanding anything contained in this ARTICLE III to the
contrary, each share of Riverbed Capital Stock issued and held in Riverbed's
treasury or by a wholly-owned Subsidiary of Riverbed immediately prior to the
Effective Time, and each share of Riverbed Capital Stock or Option owned by
Aether or Merger Sub at or immediately prior to the Effective Time, if any,
shall, by virtue of the Merger, cease to be outstanding and shall be cancelled
and retired and shall cease to exist without payment of any consideration
therefor.
Section 3.5 Exchange of Certificates.
(a) Except as provided in Section 3.5(e) below, upon the Closing,
Aether shall irrevocably deposit (or cause to be deposited) with Bank Boston,
N.A. (the "Exchange Agent"), for the benefit of the holders of shares of
Riverbed Capital Stock, for exchange in accordance with this ARTICLE III, (i)
cash in lieu of fractional shares and (ii) certificates representing the
aggregate number of shares of Aether Common Stock that may be issued to pay the
stock portion of the Merger Consideration less the Escrow Shares and the shares
of Aether Common Stock delivered at Closing pursuant to Section 3.5(e) below.
Aether Common Stock into which Riverbed Capital Stock shall be converted
pursuant to the Merger shall be deemed to have been issued at the Effective
Time.
(b) Within ten (10) Business Days after the Effective Time, Aether
shall cause the Exchange Agent to mail to each holder of record of Riverbed
Capital Stock immediately prior to the Effective Time (excluding any Appraisal
Shares) (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), which shall be in customary
form with such customary provisions as Aether shall reasonably specify (the
"Letter of Transmittal") and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration.
(c) Upon surrender of a Certificate, in such form and with such
endorsements, stock powers and signature guaranties as may be required by the
Letter of Transmittal for cancellation to the Exchange Agent or to such other
agent or agents as may be appointed by Aether, together with the Letter of
Transmittal, duly executed, and such other documents as Aether or the Exchange
Agent shall reasonably request, the holder of such Certificate shall be entitled
to receive in exchange therefor promptly after the Effective Time, (i) a check
in an amount equal to the cash which such holder has the right to receive
pursuant to the provisions of this ARTICLE III and (ii) a certificate
representing the number of shares of Aether Common Stock which such holder has
the right to receive pursuant to the provisions of this ARTICLE III (in each
case, less the amount of any required withholding taxes), and the Certificate so
surrendered shall forthwith be cancelled. Until surrendered as contemplated by
this Section 3.5(c), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger Consideration
with respect to the shares of Riverbed Capital Stock formerly represented
thereby.
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(d) Aether and the Stockholder's Representative shall jointly have the
right to make rules, not inconsistent with the terms of this Agreement,
governing the issuance and delivery of the certificates for Aether Common Stock
into which shares of Riverbed Capital Stock are converted in the Merger, and the
payment of cash for shares of Riverbed Capital Stock converted in the Merger.
(e) Unless the Exchange Agent notifies Aether and the Stockholder's
Representative in writing that it will not be necessary for certain Riverbed
stockholders to attend the Closing (the "Attending Stockholders") in order to
participate in the registered offering contemplated by Section 6.14, Aether
shall deliver at the Closing the Merger Consideration that would have otherwise
been deposited with the Exchange Agent pursuant to Section 3.5(a) for the
benefit of such stockholders. Such notice shall be delivered at least three days
prior to the expected Closing Date, shall state the name of each attending
stockholder and shall set forth the number of shares of Aether Common Stock to
be issued to such attending stockholder. At the Closing, upon surrender to
Aether of a Certificate by an Attending Stockholder for cancellation, together
with any other documents reasonably required by Aether, the Attending
Stockholder shall receive (i) a check in an amount equal to the cash which such
holder has the right to receive pursuant to the provisions of this ARTICLE III
and (ii) a certificate representing the number of shares of Aether Common Stock
which such holder has the right to receive pursuant to the provisions of this
ARTICLE III. Aether and the Stockholders' Representative shall enter into a
mutually agreeable Exchange Agent Agreement.
Section 3.6 Escrow Shares. The "Escrow Shares" shall mean an aggregate of
270,000 shares of Aether Common Stock comprising a portion of the Merger
Consideration payable to the holders of Riverbed Capital Stock. A pro rata
portion of the Escrow Shares shall be withheld from each person who is a
stockholder of Riverbed immediately before the Effective Time and deposited by
Aether at the Closing with the Escrow Agent pursuant to an Escrow Agreement in
the form of Exhibit E.
Section 3.7 Dividends, Fractional Shares, Etc.
(a) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the Effective Time on Aether
Common Stock shall be paid to the holder of any unsurrendered Certificates until
such Certificates are surrendered for exchange as provided in this ARTICLE III.
Subject to the effect of applicable laws, following the surrender of any such
Certificate, there shall be paid, without interest, to the Person in whose name
the certificates representing the shares of Aether Common Stock into which the
shares of Riverbed Capital Stock formerly represented by such Certificate were
converted are registered, (i) at the time of such surrender, the amount of all
dividends and other distributions with a record date after the Effective Time
theretofore payable with respect to such whole shares of Aether Common Stock and
not paid, less the amount of any withholding taxes which may be required
thereon, and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of Aether Common Stock, less the amount of any withholding
taxes which may be required thereon.
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(b) No fractional shares of Aether Common Stock or Aether Options
shall be issued in the Merger. All fractional shares of Aether Common Stock or
Aether Options that a holder of shares of Riverbed Capital Stock or Riverbed
Options would otherwise be entitled to receive as a result of the Merger shall
be aggregated and, if a fractional share results from such aggregation, such
holder shall be entitled to receive, in lieu thereof, an amount in cash
determined by multiplying (i) the fraction of a share of Aether Common Stock to
which such holder would otherwise have been entitled (net any exercise price, if
applicable) by (ii) the Average Aether Stock Price for the Measurement Period.
No interest will be paid or will accrue on any cash paid or payable in lieu of
any fractional shares of Aether Common Stock or of an Aether Option.
(c) At and after the Effective Time, there shall be no further
registration of transfers of shares of Riverbed Capital Stock. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged for the Merger Consideration in accordance with
the procedures set forth in this ARTICLE III.
(d) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the shares of Riverbed Capital Stock
represented by the Certificate or Certificates surrendered in exchange therefor,
it shall be a condition to such payment that the Certificate or Certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of such payment to a
Person other than the registered holder of such Certificates or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(e) Any portion of the Merger Consideration or cash payable in lieu of
fractional shares made available to the Exchange Agent pursuant to this ARTICLE
III that remains unclaimed by the former holders of shares of Riverbed Capital
Stock one year after the Effective Time shall be delivered to Aether. Any such
holder who has not theretofore exchanged his Certificates for the Merger
Consideration in accordance with this ARTICLE III shall thereafter look only to
Aether for payment of the applicable Merger Consideration, cash in lieu of
fractional shares and unpaid dividends and distributions on the Aether Common
Stock deliverable in respect thereof, determined pursuant to this Agreement, in
each case, without interest. None of Aether, Riverbed or the Surviving
Corporation shall be liable to any former holder of shares of Riverbed Capital
Stock for any amount paid to a Governmental Authority pursuant to any applicable
abandoned property, escheat or similar laws. Any amounts remaining unclaimed by
holders of Certificates five years after the Effective Time (or such earlier
date immediately prior to such time as such amounts would otherwise escheat to
or become the property of any Governmental Authority) shall, to the extent
permitted by applicable law, become the property of Aether free and clear of any
claims or interest of any person previously entitled thereto.
(f) In the event that any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by Aether, the
posting by such Person of a bond in a customary amount as indemnity against any
claim that may be made against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration, cash in lieu of fractional shares, and unpaid
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dividends and distributions on shares of Aether Common Stock deliverable in
respect thereof pursuant to this Agreement.
(g) If at any time during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of Aether shall occur, including by reason of any
reclassification, reorganization, recapitalization, stock split or combination,
exchange or readjustment of shares, or any stock dividend thereon with a record
date during such period, the number of shares of Aether Common Stock
constituting all or part of the Merger Consideration shall be appropriately
adjusted in accordance with such change.
Section 3.8 Tax Treatment. It is intended by the parties hereto that the
Merger shall constitute a reorganization within the meaning of Section
368(a)(2)(E) 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.
Section 3.9 Appraisal Rights. Riverbed Capital Stock which is not voted
in favor of the Merger and with respect to which a demand for appraisal shall
have been properly made in the manner provided by the DGCL ("Appraisal Shares")
shall not be converted into the right to receive any Merger Consideration and
the holders of Appraisal Shares shall be entitled only to such rights as are
contemplated by the DGCL; provided, however, that if a holder of Appraisal
Shares shall withdraw his, her or its demand for such payment or shall become
ineligible for such payment, pursuant to the DGCL, then as of the Effective Time
or the occurrence of such event of withdrawal or ineligibility, whichever later
occurs, such holder's Appraisal Shares shall cease to be Appraisal Shares and
shall be converted into the right to receive the applicable Merger
Consideration. Riverbed shall give Aether prompt notice of any Appraisal Shares
(and shall also give Aether prompt notice of any withdrawals of such demands for
appraisal rights) and Aether shall have the right to direct all negotiations and
proceedings with respect to any such demands. Riverbed shall not, except with
the prior written consent of Aether, voluntarily make any payment with respect
to, or settle or offer to settle, any such demand for appraisal rights.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF RIVERBED
Riverbed hereby represents and warrants to Aether and Merger Sub that:
Section 4.1 Organization and Qualifications; Subsidiaries. Riverbed and
each Subsidiary of Riverbed is a corporation, partnership, or other legal entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the corporate or other
applicable power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted. Each of Riverbed and its
Subsidiaries is duly qualified or licensed as a foreign corporation or
partnership to transact 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 business makes such qualification or licensing necessary, except
where the failure to so qualify or be licensed would not have a Material Adverse
Effect.
Section 4.2 Articles of Incorporation or Charter and Bylaws. Complete and
correct copies of the articles of incorporation or charter and bylaws of
Riverbed and each of its Subsidiaries, as amended to date, are included with
Schedule 4.2 to the Disclosure Letter. Such Organizational Documents are in full
force and effect and reflect all amendments or modifications adopted as of the
date hereof. Riverbed is not in violation of any provision of its Organizational
Documents. No Subsidiary of Riverbed is in violation of any provision of its
Organizational Documents.
Section 4.3 Capitalization. The authorized capital stock of Riverbed
consists of (i) 14,354,789 shares of common stock, $.01 par value, of which (A)
3,104,129 shares are issued and outstanding, (B) 75,000 shares are reserved to
be issued upon exercise of Options to be granted to Riverbed management with a
minimum exercise price of $13.53 per share, and (C) Options to purchase
1,968,309 shares of Riverbed Common Stock are issued and outstanding, (ii)
3,500,000 shares of series A preferred stock, $.01 par value, of which 3,500,000
shares are issued and outstanding, and (iii) 4,145,211 shares of series B
preferred stock, $.01 par value, of which 4,145,211 shares are issued and
outstanding. All of the issued and outstanding shares of Riverbed Capital Stock
and the capital stock of each Subsidiary of Riverbed have been duly authorized
and validly issued and are fully paid and nonassessable and, with respect to
each Subsidiary, all shares of such capital stock are owned by Riverbed free and
clear of any Liens. All of the issued and outstanding shares of Riverbed Capital
Stock and of the capital stock of each Subsidiary of Riverbed were offered,
issued, sold and delivered by Riverbed in compliance with all applicable state
and federal laws concerning the issuance of securities. Further, none of such
shares was issued in violation of any preemptive rights. Except as set forth in
Schedule 4.3 to the Disclosure Letter, there are no voting agreements or voting
trusts with respect to any of the outstanding shares of Riverbed Capital Stock.
Since December 31, 1999, no shares of capital stock or other voting securities
of Riverbed or any of its Subsidiaries, or Options in respect thereof have been
issued except upon the exercise of Riverbed Options or the conversion of the
Riverbed Preferred Stock. Except for the Riverbed Options set forth in Schedule
4.3 of the
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Disclosure Letter, there are not now, and at the Closing there will not be, any
Options of Riverbed in existence. All shares of Riverbed Capital Stock subject
to issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Except as set forth in Schedule
4.3 to the Disclosure Letter, there are no outstanding contractual obligations
of Riverbed or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of Riverbed Capital Stock or any other shares of capital
stock of Riverbed or any of its Subsidiaries, or make any material investment
(in the form of a loan, capital contribution or otherwise) in any Subsidiary of
Riverbed or any other Person, other than a wholly-owned Subsidiary of Riverbed
or a Person wholly-owned by one or more wholly-owned Subsidiaries of Riverbed.
Schedule 4.3 to the Disclosure Letter sets forth a complete listing as of
February 8, 2000 of holders of shares of Riverbed Capital Stock and holders of
Options to acquire Riverbed Capital Stock and the number of shares and Options
held by each.
Section 4.4 Authority Relative to This Agreement. Riverbed has all
necessary corporate power and authority to execute and deliver this Agreement,
and, subject to the Riverbed Stockholder Approval, to perform its obligations
hereunder and to consummate the Transactions. The execution and delivery of this
Agreement by Riverbed, the performance by Riverbed of its obligations hereunder
and the consummation by Riverbed of the Transactions have been duly and validly
approved by the Board of Directors of Riverbed, the Board of Directors of
Riverbed has recommended approval of this Agreement by the stockholders of
Riverbed and directed that this Agreement be submitted to the stockholders of
Riverbed for their consideration, and no other corporate proceedings on the part
of Riverbed are necessary to authorize this Agreement or to consummate the
Transactions (other than the Riverbed Stockholder Approval and the Merger
Filing). This Agreement has been duly and validly executed and delivered by
Riverbed and, assuming the due authorization, execution and delivery thereof by
Aether and Merger Sub, constitutes the legal, valid and binding obligation of
Riverbed, enforceable against Riverbed in accordance with its terms, except as
enforceability may be limited by bankruptcy or other similar laws and general
principles of equity.
Section 4.5 No Conflict; Required Filings and Consents; Certain
Contracts.
(a) The execution and delivery of this Agreement by Riverbed does not,
and the performance of its obligations under this Agreement and the consummation
of the Transactions by Riverbed will not, (i) conflict with, result in a breach
of, cause a dissolution or require the consent or approval of any Person under,
or violate any provision of, the Organizational Documents of Riverbed or any of
its Subsidiaries, (ii) require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Authority, except for
(A) applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976 (as amended, the "HSR Act"), including any rules and regulations
promulgated thereunder, (B) the Merger Filing, (C) the Riverbed Stockholder
Approval, and (D) such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not result in a Material
Adverse Effect on Riverbed or Aether, (iii) subject to the making of the filings
and obtaining the approvals identified in clause (ii), conflict with or violate
any Law, order, judgment, rule, regulation, ordinance, writ, injunction or
decree applicable to Riverbed or any of its Subsidiaries or by which any
property or asset of Riverbed or any Subsidiary is bound or affected, which
conflict or violation would result in a Material Adverse Effect on Riverbed or
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the Surviving Corporation, or (iv) except as set forth in Schedule 4.5 of the
Disclosure Letter, conflict with or result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, result in the loss by Riverbed or any of its Subsidiaries or
modification in a manner materially adverse to Riverbed or any of its
Subsidiaries of any right or benefit under, or give to others any right of
termination, amendment, acceleration, repurchase or repayment, increased
payments or cancellation of, or result in the creation of a Lien or other
encumbrance on any Riverbed Capital Stock or any material property or asset of
Riverbed or any Subsidiary of Riverbed pursuant to, any Contract of Riverbed,
except, in each case, such as would not, individually or in the aggregate have a
Material Adverse Effect on Riverbed. The notices, consents or approvals, filings
or registrations, and expirations or terminations of waiting periods referred to
in clauses (A)-(C) above are hereinafter referred to as the "Requisite
Regulatory Approvals."
(b) Except as set forth in Schedule 4.5 of the Disclosure Letter,
there are no Contracts to which Riverbed or any Subsidiary of Riverbed is a
party or by which Riverbed or any Subsidiary of Riverbed or any asset of
Riverbed or any Subsidiary of Riverbed is bound, which by its terms materially
limits the ability of Riverbed or any Subsidiary of Riverbed, or after
consummation of the Transactions, would by its terms materially limit the
ability of Aether or any of its Affiliates, to engage in any business in any
area or for any period.
Section 4.6 Financial Statements.
(a) The consolidated financial statements of Riverbed and its
Subsidiaries for the years ended December 31, 1998 and December 31, 1999, (the
"Financial Statements") included as Schedule 4.6(a) to the Disclosure Letter
hereto, were prepared in accordance with GAAP applied on a basis consistent with
prior periods and fairly present in all material respects except for necessary
normal recurring year end adjustments the consolidated financial position of
Riverbed and its consolidated Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended and do not contain any material misstatements of the
financial condition or results of operations of Riverbed at such dates or for
the periods then ended.
(b) Since December 31, 1999, neither Riverbed nor any of its
Subsidiaries has incurred any liabilities or obligations (whether absolute,
accrued, fixed, contingent, liquidated, unliquidated or otherwise and whether
due or to become due) of any nature, except as set forth in Schedule 4.6(b) to
the Disclosure Letter and except liabilities, obligations or contingencies (i)
which were incurred after December 31, 1999 in the ordinary course of business
consistent with past practices under any contract, commitment or agreement
specifically disclosed in a Schedule to the Disclosure Letter or not required to
be disclosed thereon because of the term or amount involved or otherwise, (ii)
which were incurred as a result of the Transactions contemplated by this
Agreement, (iii) which were disclosed or reserved against on the balance sheet
to the Financial Statements or which would not be required under GAAP to be
reported on the balance sheet to the Financial Statements, or (iv) which would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Riverbed. Riverbed and its Subsidiaries have timely filed all
forms, reports and other documents material to the business of Riverbed and its
Subsidiaries required to be filed prior to the date hereof with any Governmental
Authority.
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(c) Since December 31, 1998, there has been no change in any of the
significant accounting (including Tax accounting) policies, practices or
procedures of Riverbed or any Subsidiary of Riverbed, except changes to comply
with changes in accounting pronouncements of the Financial Accounting Standards
Board or changes in applicable laws or rules or regulations thereunder as
disclosed on Schedule 4.6(c) to the Disclosure Letter.
Section 4.7 Absence of Certain Changes or Events. Except as a result of
this Agreement and the transactions contemplated hereby or as set forth in
Schedule 4.7 to the Disclosure Letter, since December 31, 1999, (a) each of
Riverbed and its Subsidiaries has conducted its respective business only in the
ordinary course consistent with past practices, and has not taken any of the
actions set forth in paragraphs (a) through (l) of Section 6.4 and (b) there has
not occurred or arisen any event that, individually or in the aggregate, has had
or, insofar as can be reasonably foreseen, would have a Material Adverse Effect
on Riverbed or any of its Subsidiaries.
Section 4.8 Conformity with Law; Relations with Governments; Litigation.
Each of Riverbed and its Subsidiaries has not violated any law or regulation or
any order of any Governmental Authority having jurisdiction over it which would
have a Material Adverse Effect. Riverbed has not offered anything of value to
any governmental official, political party or candidate for government office
nor has it otherwise taken any action that would cause Riverbed to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended, or any law
of similar effect. Schedule 4.8 to the Disclosure Letter lists, as of the date
hereof and the Closing Date, all claims, suits, actions or proceedings pending
or, to the Knowledge of each of Riverbed and its Subsidiaries, threatened or
contemplated, including any investigations or reviews by any Governmental
Authority pending or, to the Knowledge of each of Riverbed and its Subsidiaries,
threatened or contemplated, against, relating to or affecting each of Riverbed
and its Subsidiaries (collectively, the "Claims"). If adversely determined, the
Claims will not, individually or in the aggregate, have a Material Adverse
Effect on Riverbed. There is no judgment, decree, order, injunction,
stipulation, award or writ of any Governmental Authority outstanding against
Riverbed or any of its Subsidiaries.
Section 4.9 Employee Benefit Plans and Related Matters; ERISA.
(a) Schedule 4.9 to the Disclosure Letter contains a complete and
accurate list of all Riverbed Plans and Riverbed Benefit Arrangements and
specifically identifies all Riverbed Plans (if any) that are Qualified Plans.
(b) With respect, as applicable, to Benefit Plans and Benefit
Arrangements:
(i) Riverbed has delivered or made available true, correct, and
complete copies of the following documents with respect to
all Riverbed Plans and Riverbed Benefit Arrangements to
Aether: (A) all plan or arrangement documents, including
but not limited to trust agreements, insurance policies,
service agreements and formal and informal amendments to
each; (B) the most recent Forms 5500 or 5500C/R and any
attached financial statements and related actuarial
reports, and those for the prior three years; (C) the last
IRS determination letter, the last IRS determination letter
that
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covered the qualification of the entire plan (if
different), and the materials submitted to obtain those
letters; (D) summary plan descriptions and summaries of
material modifications, and any prospectuses that describe
the Riverbed Benefit Arrangements or Riverbed Plans; (E)
written descriptions of all non-written agreements relating
to any such plan or arrangement; (F) all reports submitted
within the three years preceding the date of this Agreement
by third-party administrators, actuaries, investment
managers, consultants, or other independent contractors
(other than participant statements); (G) all notices that
the IRS, Department of Labor or any other governmental
agency or entity issued to the Seller within the four years
preceding the date of this Agreement; (H) employee manuals
or handbooks containing personnel or employee relations
policies; (I) the most recent quarterly listing of workers'
compensation claims and a schedule of workers' compensation
claims of the Seller for the last three fiscal years; and
(J) any other documents Aether has requested;
(ii) the Qualified Plans qualify under Section 401(a) of the
Code, and nothing has occurred with respect to the
operation of any Qualified Plan that could cause the
imposition of any liability, lien, penalty, or tax under
ERISA or the Code; each Riverbed Plan and each Riverbed
Benefit Arrangement has been maintained in all material
respects in accordance with its constituent documents and
with all applicable provisions of domestic and foreign
laws, including federal and state securities laws and any
reporting and disclosure requirements; with respect to each
Riverbed Plan, no transactions prohibited by Code Section
4975 or ERISA Section 406 and no breaches of fiduciary duty
described in ERISA Section 404 have occurred, and no
Riverbed Plan contains any security issued by any Related
Employer;
(iii) the Related Employers have never sponsored or maintained,
had any obligation to sponsor or maintain, or had any
liability (whether actual or contingent, with respect to
any of their assets or otherwise) with respect to any
Benefit Plan subject to Section 302 of ERISA or Section 412
of the Code or Title IV of ERISA (including any
Multiemployer Plan);
(iv) there are no pending claims (other than routine benefit
claims) or lawsuits that have been asserted or instituted
by, against, or relating to, any Riverbed Plans or Riverbed
Benefit Arrangements, nor is there any basis for any such
claim or lawsuit. No Riverbed Plans or Riverbed Benefit
Arrangements are or have been under audit or examination
(nor has notice been received of a potential audit or
examination) by any domestic or foreign governmental agency
or entity, and no matters are pending with respect to any
Riverbed Plan under the IRS's Employee Plans Compliance
Resolutions System or any successor or predecessor program;
(v) no Riverbed Plan or Riverbed Benefit Arrangement contains
any provision or is subject to any law that would
accelerate or vest any benefit or require severance,
termination or other payments or trigger any liabilities as
a result of the transactions this Agreement contemplates;
no Related
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Employer has declared or paid any bonus or incentive
compensation related to the transactions this Agreement
contemplates; and no payments under any Riverbed Plan or
Riverbed Benefit Arrangement would, individually or
collectively, be nondeductible under Code Section 280G;
(vi) all reporting, disclosure, and notice requirements of ERISA
and the Code have been satisfied in all material respects
with respect to each Riverbed Plan and each Riverbed
Benefit Arrangement;
(vii) each Related Employer has paid all amounts it is required
to pay as contributions to the Riverbed Plans as of the
date of this Agreement; all benefits accrued under any
unfunded Riverbed Plan or Riverbed Benefit Arrangement will
have been paid, accrued, or otherwise adequately reserved
in accordance with GAAP as of the date of this Agreement;
and all monies withheld from employee paychecks with
respect to Riverbed Plans have been transferred to the
appropriate plan within 30 days of such withholding;
(viii) to Riverbed's Knowledge, no statement, either written or
oral, has been made by the Related Employers to any person
with regard to any Riverbed Plan or Riverbed Benefit
Arrangement that was not in accordance with the Riverbed
Plan or Riverbed Benefit Arrangement and that would involve
a material increase in expense or liability under such plan
or arrangement;
(ix) the Related Employers have no liability (whether actual,
contingent, with respect to any of its assets or otherwise)
with respect to any Benefit Plan or Benefit Arrangement
that is not a Riverbed Plan or Riverbed Benefit Arrangement
or with respect to any Benefit Plan sponsored or maintained
(or which has been or should have been sponsored or
maintained) by any ERISA Affiliate; and
(x) all group health plans of the Related Employers materially
comply with the requirements of Part 6 of Title I of ERISA
("COBRA"), Code Section 5000, and the Health Insurance
Portability and Accountability Act; the Related Employers
have no liability under or with respect to COBRA for their
own actions or omissions or those of any predecessor; the
Related Employers' voluntary employee beneficiary
association, if any, is exempt from tax and complies with
all requirements applicable to it; no employee or former
employee (or beneficiary of either) of a Related Employer
is entitled to receive any benefits, including, without
limitation, death or medical benefits (whether or not
insured) beyond retirement or other termination of
employment, other than as applicable laws require.
Section 4.10 Labor and Employment Matters. With respect to employees of
and service providers to the Related Employers:
(a) the Related Employers are complying and have complied in all
material respects with all applicable domestic and foreign laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, including without limitation any such laws respecting
employment discrimination, workers' compensation, family and medical leave,
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the Immigration Reform and Control Act, and occupational safety and health
requirements, and no claims or investigations are pending or, to the Knowledge
of Riverbed, threatened with respect to such laws, either by private individuals
or by governmental agencies;
(b) no Related Employer is or has been engaged in any unfair labor
practice, and there is not now, nor within the past three years has there been,
any unfair labor practice complaint against any Related Employer pending or, to
the Knowledge of Riverbed, threatened, before the National Labor Relations Board
or any other comparable foreign or domestic authority or any workers' council;
(c) no labor union represents or has ever represented the Related
Employers' employees and no collective bargaining agreement is or has been
binding against any Related Employer. No Related Employer is currently
negotiating to create such agreements. No grievance or arbitration proceeding
arising out of or under collective bargaining agreements or employment
relationships is pending, and no claims therefor exist or have, to the Knowledge
of Riverbed, been threatened;
(d) no labor strike, lock-out, slowdown, or work stoppage is or has
ever been pending or threatened against or directly affecting any Related
Employer; and
(e) all persons who are or were performing services for any Related
Employer and are or were classified as independent contractors do or did satisfy
and have satisfied the requirements of law to be so classified, and the
appropriate Related Employer has fully and accurately reported their
compensation on IRS Forms 1099 when required to do so.
Section 4.11 Insurance. Schedule 4.11 to the Disclosure Letter sets forth
(a) an accurate list of each material insurance policy providing coverage for
liability exposure (including policies providing property, casualty, liability
and workers' compensation coverage and bond and surety arrangements) to which
each of Riverbed and its Subsidiaries is currently, or has been during the past
three years, a party, a named insured or otherwise the beneficiary of coverage
and (b) all insurance loss runs or workers' compensation claims received for the
past three policy years. With respect to each such insurance policy, to the
Knowledge of each of Riverbed and its Subsidiaries: (a) the policy is legal,
valid, binding, enforceable and in full force and effect; (b) there will be no
breach or other violation of the policy resulting from the Transactions; and (c)
each of Riverbed and its Subsidiaries is not in breach or default (including
with respect to the payment of premiums or the giving of notices); and (d) no
event has occurred which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination, modification or acceleration,
under the policy.
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Section 4.12 Brokers. Other than Xxxxxx Xxxxxxx Xxxx Xxxxxx (the
"Riverbed Financial Advisor"), no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based on any arrangement or agreement made by or on behalf
of each of Riverbed and its Subsidiaries.
Section 4.13 Taxes.
(a) Except as set forth in Schedule 4.13(a) of the Disclosure Letter,
each of Riverbed and its Subsidiaries has timely filed all Tax Returns that were
required to be filed as of the Effective Time, and all such Tax Returns are
true, correct and complete in all material respects.
(b) Each of Riverbed and its Subsidiaries has paid in full on a timely
basis all Taxes owed by it, whether or not shown on any Tax Return.
(c) The liability of each of Riverbed and its Subsidiaries for unpaid
Taxes did not, as of the dates of the financial statements described in Section
4.6, exceed the current liability accruals for Taxes (excluding reserves for
deferred Taxes) set forth on such financial statements. The liability of each of
Riverbed and its Subsidiaries for unpaid Taxes as of the Effective Day will not
exceed such accruals as adjusted on the books of Riverbed in accordance with
past practices to reflect transactions occurring in the ordinary course of
business though the Effective Day.
(d) There are no ongoing audits, examinations or claims procedures
against Riverbed or any of its Subsidiaries for Taxes, and no written notice of
any audit, examination, or claim for Taxes, whether pending or threatened, has
been received.
(e) Riverbed has a taxable year ending on December 31, in each year
commencing 1998.
(f) Each of Riverbed and its Subsidiaries currently utilizes the
accrual method of accounting for income tax purposes and such method of
accounting has not changed since its incorporation. Neither Riverbed nor any of
its Subsidiaries has agreed to, and is not and will not be required to, make any
adjustments under Code section 481(a) as a result of a change in accounting
methods.
(g) Each of Riverbed and its Subsidiaries has withheld and paid over
to the proper governmental authorities all Taxes required to have been withheld
and paid over, and complied with all information reporting and backup
withholding requirements, including maintenance of required records with respect
thereto, in connection with amounts paid to any employee, independent
contractor, creditor, or other third party.
(h) Neither Riverbed nor any of its Subsidiaries has entered into any
agreement extending, or having the effect of extending, the period of assessment
or collection of any Taxes and no power of attorney with respect to any Taxes
has been executed or filed with the IRS or any other taxing authority.
(i) Copies of filed Tax Returns of each of Riverbed and its
Subsidiaries for taxable years beginning after December 31, 1997, and copies of
any Tax examinations, audit reports, or
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notices of deficiencies of each of Riverbed and its Subsidiaries, without regard
to time, have been delivered to Aether.
(j) There are (and as of immediately following the Closing there will
be) no Liens on the assets of Riverbed or any of its Subsidiaries relating to or
attributable to Taxes (other than Permitted Liens).
(k) There is no reasonable basis for the assertion of any claim
relating or attributable to Taxes which, if adversely determined, would result
in any Lien (other than Permitted Liens) on the assets of Riverbed or any of it
Subsidiaries.
(l) Neither Riverbed 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).
(m) Neither Riverbed nor any of its Subsidiaries is, or has ever been,
a party to a Tax sharing, Tax indemnity or Tax allocation agreement, and neither
Riverbed nor any of its Subsidiaries has assumed the Tax liability of any other
Person under contract.
(n) Neither Riverbed nor any of its Subsidiaries is, or has ever been,
a "United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code.
(o) Neither Riverbed nor any of its Subsidiaries has been a member of
an affiliated group filing a consolidated federal income Tax Return other than a
group of which Riverbed is the common parent. Neither Riverbed nor any of its
Subsidiaries has any liability for the Taxes of another Person under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local or foreign law) as a
transferee or successor, by contract or otherwise.
(p) Neither Riverbed nor any of its Subsidiaries is a party to any
joint venture, partnership or other arrangement that is treated as a partnership
for federal income tax purposes. (q) Schedule 4.13
(q) contains accurate and complete descriptions of Riverbed and each
of its Subsidiaries' basis in its assets.
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Section 4.14 Environmental Matters. Each of Riverbed and its Subsidiaries
is in compliance in all material respects with all environmental laws, rules,
regulations and standards promulgated, adopted or enforced by the Environmental
Protection Agency ("EPA") and of similar agencies in states in which they
conduct their respective businesses. There is no suit, claim, action or
proceeding now pending before any court, governmental agency or board or other
forum or, to the Knowledge of each of Riverbed and its Subsidiaries, threatened
by any Person, (a) for alleged noncompliance with any environmental law, rule or
regulation or (b) relating to the discharge or release into the environment of
any hazardous material or waste at or on a site presently or formerly owned,
leased or operated by each of Riverbed and its Subsidiaries.
Section 4.15 Intellectual Property.
(a) Schedule 4.15(a) to the Disclosure Letter lists: (i) all
applications and registrations for patents, copyrights, trademarks, service
marks and trade dress which are included in the Riverbed Intellectual Property
and are owned by or on behalf of each of Riverbed and its Subsidiaries; (ii) all
material hardware products and tools, software products and tools, and services
that are currently published, offered, or under development, including a list of
marketing, research, development or any other current or future official
business related projects currently under consideration, by each of Riverbed and
its Subsidiaries; (iii) all material licenses, sublicenses and other agreements
to which each of Riverbed and its Subsidiaries is a party and pursuant to which
each of Riverbed and its Subsidiaries authorizes any other person to use the
Riverbed Intellectual Property or exercise any other right with regard thereto
and (iv) all material Third Party Intellectual Property.
(b) In addition to Intellectual Property defined in Section 1.1,
Riverbed Intellectual Property also consists of (i) items and rights solely
owned by Riverbed, (ii) the subject matter disclosed in U.S. Patent Application
Serial No. 09/235,808 (the '808 Patent Application), filed January 22, 1999,
entitled "SYSTEM, METHOD AND MEANS FOR CONVEYING INFORMATION BETWEEN A REMOTE
DEVICE AND A CENTRAL COMPUTER," and (iii) any and all inventions conceived or
reduced to practice on or before the Closing Date by Riverbed employees,
Officers or any party that has an obligation to assign such inventions to
Riverbed.
(c) Each of Riverbed and its Subsidiaries has all rights, title and
interest in the Riverbed Intellectual Property, and all necessary licenses,
permissions and other rights in the Third Party Intellectual Property, necessary
to carry out the business of Riverbed or its Subsidiaries as it has been, is
currently, or is reasonably anticipated (as of the date of this Agreement and as
of the Closing) by Riverbed and its Subsidiaries to be, conducted.
(d) Each of Riverbed and its Subsidiaries is the rightful owner of any
and all rights in Riverbed Intellectual Property for its current technologies or
those under development by Riverbed or its subsidiaries on or before the Closing
Date, including without limitation rights to make, use, import, reproduce,
modify, adapt, create derivative works based on, translate, distribute (directly
and indirectly), transmit, display and perform publicly, license, rent, lease,
assign, and sell the Riverbed Intellectual Property and products embodying the
Riverbed Intellectual Property, in all fields of use, in each country in which
Riverbed conducts business,
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and to sublicense any or all such rights to third parties, including the right
to grant further sublicenses.
(e) Each of Riverbed and its Subsidiaries has obtained the rights to
Riverbed Intellectual Property in writing from its officers, employees and third
parties, including independent contractors, sub-contractors, and NobleStar, to
assign, license, sublicense, transfer or grant any and all the rights and
licenses conveyed under this Agreement.
(f) All necessary registration, maintenance and renewal fees currently
due have been made with respect to, and all necessary documentation,
recordations and certifications have been filed with the relevant authorities
for purposes of maintaining, all Riverbed Intellectual Property applications and
registrations listed on Schedule 4.15(a) to the Disclosure Letter.
(g) Each of Riverbed and its Subsidiaries' employees and officers has
taken any and all reasonably necessary steps to protect material Riverbed
Intellectual Property, including securing patent, copyright, trademark, trade
secret, mask works or other intellectual property rights, as appropriate, in
works of authorship, inventions, trade secrets and other confidential
information conceived or reduced to practice on or before the Closing Date.
Except with respect to the '808 application, each of Riverbed and its
Subsidiaries' employees and officers has exercised reasonable efforts and due
diligence to protect Riverbed Intellectual property and has not engaged or will
not engage in an act or omission that would prevent, now, or in the future,
securing or protecting Riverbed Intellectual Property and rights in current
technologies or those under development. Each of Riverbed and its Subsidiaries,
employees, or officers has not engaged in any act or omission that would
constitute a bar to the U.S. patentability of any patent applications listed on
Schedule 4.15(a), or any patent applications being prepared for filing,
including but not limited to, any publication, public use, or offer for sale of
an invention.
(h) Each of Riverbed and its Subsidiaries, employees, or officers has
complied with the required duty of candor before the United States Patent and
Trademark Office in connection with any patent application filed on behalf of
Riverbed or in connection with any Riverbed Intellectual Property.
(i) Each of Riverbed and its Subsidiaries' current use, reproduction,
modification, distribution, licensing, sublicensing, sale, or any other exercise
of, or use, reproduction, modification, distribution, licensing, sublicensing,
sale, or any other exercise of any Riverbed Intellectual Property currently
reasonably anticipated by Riverbed (including rights in any product, work,
technology, service or process) does not, to Riverbed's Knowledge, interfere
with, infringe upon, or misappropriate any copyright, patent, trade secret,
trademark, service xxxx, trade name, firm name, logo, trade dress, mask work,
moral right, other Intellectual Property right, right of privacy or right in
personal data of any person.
(j) Each of Riverbed and its Subsidiaries' commercially available
products, including hardware or software products and tools, services, or
technologies, either alone or in combination, do not, to Riverbed's Knowledge,
infringe any patent or other intellectual property right or similar right of a
third party.
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(k) The current versions of each of Riverbed and its Subsidiaries'
products substantially conform to the current published specifications and
marketing materials relating to such products.
(l) Each of Riverbed and its Subsidiaries has obtained written
agreements from all of its officers, employees and third party contractors or
agents (other than its law firms, accounting firms and other professional
advisors that are subject to preexisting confidentiality obligations to
Riverbed) to not assert any intellectual property right, including any patent,
copyright, trademark, trade secret, rights in mask works or other intellectual
property rights, included in or relating to the Riverbed Intellectual Property.
(m) Each of Riverbed and its Subsidiaries is not, nor as a result of
the execution or delivery of this Agreement, or performance of Riverbed's
obligations hereunder, will each of Riverbed and its Subsidiaries be, in
violation or default of any license, sublicense or other agreement to which each
of Riverbed and its Subsidiaries is a party or otherwise bound. The consummation
of the transactions contemplated by this Agreement will not trigger the release
of any of each of Riverbed and its Subsidiaries' source code to any third party.
Each of Riverbed and its Subsidiaries is not in breach or default in any respect
under any agreement or arrangement relating to Third Party Intellectual
Property, nor has each of Riverbed and its Subsidiaries given or received a
notice of default under any agreement or arrangement relating to Third Party
Intellectual Property incorporated in each of Riverbed and its Subsidiaries'
products, including hardware or software products and tools, services, or
technologies. Each item of Intellectual Property owned or used by each of
Riverbed and its Subsidiaries immediately prior to the Closing hereunder will
continue to be owned or available for use by the Surviving Corporation on
identical terms and conditions immediately subsequent to the Closing hereunder.
(n) Except as set forth in Schedule 4.15(n) of the Disclosure Letter,
each of Riverbed and its Subsidiaries is not obligated to provide any
consideration (whether financial or otherwise) to any third party, nor is any
third party otherwise entitled to any consideration, with respect to any
exercise of rights by Riverbed in the Riverbed Intellectual Property or the
Third Party Intellectual Property.
(o) Except as set forth in Schedule 4.15(o) of the Disclosure Letter,
no claim, complaint, demand or notice (i) challenging the validity,
effectiveness, or ownership by Riverbed of any of the Riverbed Intellectual
Property, (ii) charging that either Riverbed or any Subsidiary has not performed
its obligations under any license, sublicense, or agreement relating to the
Third Party Intellectual Property, (iii) to the effect that the use,
reproduction, modification, distribution, licensing, sublicensing, sale, or any
other exercise of, or Riverbed's reasonably anticipated use, reproduction,
modification, distribution, licensing, sublicensing, sale, or any other exercise
of any Riverbed Intellectual Property (including rights in any product, work,
technology, service or process as used, provided or offered at any time)
interferes with, infringes upon, or misappropriates or will interfere with,
infringe upon, or misappropriate any Intellectual Property or other proprietary
or personal right of any person, has ever been, to the Knowledge of Riverbed,
alleged, asserted or threatened by any person, nor, to the Knowledge of
Riverbed, are there nor has there ever been any valid grounds for any bona fide
claim, complaint, demand or notice of any such kind.
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(p) To the Knowledge of Riverbed, there is no unauthorized use,
infringement or misappropriation of any of the Riverbed Intellectual Property by
any third party, employee or former employee.
(q) No parties other than Riverbed possess any current or contingent
rights to any source code which is part of the Riverbed Intellectual Property.
(r) Schedule 4.15(r) to the Disclosure Letter lists all Persons who
have created any portion of, or otherwise have any rights as authors or
inventors in or to, the Riverbed Intellectual Property. Riverbed has secured
from all such Persons, including all Persons currently or formerly employed or
engaged as an employee or consultant, valid and enforceable written assignments
of any such work or other rights, confidentiality agreements, and non-disclosure
agreements for the purpose of protecting the confidential information of
Riverbed and has provided true and complete copies of such assignments and
agreements to the Surviving Company.
(s) Schedule 4.15(s) to the Disclosure Letter includes a true and
complete list of support and maintenance agreements relating to Riverbed
Intellectual Property.
(t) Each of Riverbed and its Subsidiaries has not granted any
exclusive licenses in the Riverbed Intellectual Property to third parties, and
no Person has a license to use or the right to acquire a license to use any
future version of Riverbed's software programs or any future product based on
the Riverbed Intellectual Property other than a right to license such updates
to, new releases of and new versions of Riverbed's software programs that
Riverbed makes generally available to its licensees.
Section 4.16 Books and Records. The books and records, minutes books,
stock record books and other records of each of Riverbed and its Subsidiaries
and all of its Subsidiaries, all of which have been made available to Aether,
are complete and correct in all material respects and have been maintained in
accordance with sound business practices, except for minutes of meetings of the
Board of Directors that have not been completed or approved by the Board of
Directors as of the date of this Agreement (provided that summaries of any such
minutes have been made available to Aether). The respective minutes books of
each of Riverbed and its Subsidiaries and each of its Subsidiaries contain
accurate and complete records of all meetings held of, and corporate action
taken by, the stockholders and the Boards of Directors of each of Riverbed and
its Subsidiaries. Riverbed has not engaged in any transactions that individually
or in the aggregate are material to Riverbed and its Subsidiaries that have not
been reflected in its books and records.
Section 4.17 Transactions with Affiliates. Except as set forth on
Schedule 4.17 to the Disclosure Letter, since October 21, 1998, each of Riverbed
and its Subsidiaries has not entered into any transaction with any current
director, officer or 5% or larger shareholder of each of Riverbed and its
Subsidiaries, and all ongoing contracts with any director or officer are on
arms' length terms no less favorable to each of Riverbed and its Subsidiaries
than would have been obtained from any unaffiliated third party.
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Section 4.18 Opinion of Financial Advisor. The Riverbed Financial Advisor
has delivered to Riverbed an opinion dated the date of this Agreement to the
effect that the Merger Consideration to be received by the holders of the issued
and outstanding shares of the Riverbed Capital Stock is fair from a financial
point of view to the holders of the Riverbed Capital Stock.
Section 4.19 Reliance. In entering into this Agreement, Riverbed has
relied solely on representations made in this Agreement, including the Aether
SEC Reports, and any certificates and documents required to be provided by
Aether and Merger Sub pursuant to this Agreement. Riverbed has been represented
by counsel and has had sufficient opportunity to examine and understand the
business and assets of Aether.
Section 4.20 Disclosure. All written agreements, lists, schedules,
instruments, exhibits, documents, certificates, reports, statements and other
writings furnished to Aether and any of its Representatives pursuant hereto or
in connection with this Agreement or the transactions contemplated hereby, are
and will be complete and true copies of such materials. No representation or
warranty by Riverbed contained in this Agreement, in the Schedules attached to
the Disclosure Letter or in any certificate furnished or to be furnished in
connection herewith or pursuant hereto contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary in order to make any statement contained herein or therein not
misleading.
Section 4.21 Material Contracts. Schedule 4.21 to the Disclosure Letter
is a complete and accurate list of all agreements to which Riverbed or any of
its Subsidiaries is a party that obligates Riverbed or any Subsidiary to pay, or
entitles them to receive, amounts of $10,000 or greater ("Material Contracts").
All Material Contracts (including the Palm Computing Contracts) are in full
force and effect and are not subject to any default thereunder by any party.
Riverbed has obtained, or will obtain prior to the Effective Time, all necessary
consents, waivers and approvals of parties to the Material Contracts that are
required in connection with any of the transactions contemplated hereby, or as
are required by any governmental agency or other third party or are advisable in
order that any such Material Contract remain in effect without modification
after the Merger and without giving rise to any right to termination,
cancellation or acceleration or loss of any right or benefit ("Riverbed Third
Party Consents"). All Riverbed Third Party Consents are listed in Schedule 4.5
to the Disclosure Letter.
Section 4.22 Year 2000.
(a) All computer hardware products and tools and software products and
tools currently marketed and licensed by Riverbed to others are Year 2000
Compliant.
(b) Riverbed has either obtained written representations or assurances
from or has reviewed the relevant corporate web sites regarding Year 2000
Compliance of, each third party that provides material products or services to
Riverbed and (A) provides date information or any data that are derived from or
dependent on date information or Date-Sensitive Systems, (B) processes date
information or any data that are derived from or dependent on date information,
or (C) otherwise provides any material product or service, and Riverbed has
satisfied itself, in the exercise of reasonable care, that such third party's
date information, data derived or dependent on date information and
Date-Sensitive Systems are either Year 2000 Compliant or that the
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failure of such information, data or systems to be Year 2000 Compliant will not
have a material adverse effect on the business or prospects of Riverbed.
Section 4.23 Distribution. Since December 31, 1998, Riverbed has not
declared, set aside, made or paid any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to any of its Capital Stock, or
subdivided, reclassified, recapitalized, split, combined or exchanged any of its
capital stock or other equity securities.
Section 4.24 Real Property. Riverbed does not own and never has owned any
Real Property in fee. "Real Property" means all interests in real property,
including, without limitation, improvements, and fixtures located on such real
property. All oral or written lease, subleases, licenses, concession agreements
or other use or occupancy agreements pursuant to which Riverbed leases to or
from any other party any real property, including all renewals, extensions,
modifications or supplements to any of the foregoing or substitutions for any of
the foregoing (collectively, the "Leases"), are valid and in full force and
effect, and have not been assigned, modified, supplemented or amended. Riverbed
leases all Real Property necessary to conduct its business. Riverbed has made
available to Aether true and complete copies of all of the Leases, all
amendments thereto, and all material correspondence related thereto, including
all correspondence pursuant to which any party to any of the Leases declared a
default thereunder or provided notice of the exercise of any operation granted
to such party under such Lease. The Leases and Riverbed's interests thereunder
are free of all Liens, other than Permitted Liens.
Section 4.25 Personal Property. Schedule 4.25 to the Disclosure Letter
sets forth an accurate list of all personal property owned or leased by Riverbed
with a current book value in excess of $25,000. Riverbed currently owns or
leases all personal property necessary to conduct the business and operations of
Riverbed.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF AETHER AND MERGER SUB
Aether and Merger Sub hereby represent and warrant to Riverbed that:
Section 5.1 Organization and Qualifications; Subsidiaries. Aether, Merger
Sub and each Material Subsidiary of Aether is a corporation, partnership,
limited liability company or other legal entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and has the corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where failure to obtain such
approvals would not have a Material Adverse Effect upon Aether. Each of Aether,
Merger Sub and each Material Subsidiary of Aether is duly qualified or licensed
as a foreign corporation, partnership or limited liability company to transact
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 business
makes such qualification or licensing necessary and where the failure to so
qualify would cause a Material Adverse Effect upon such entity. Merger Sub is a
direct wholly-owned Subsidiary of Aether.
Section 5.2 Charter and Bylaws. Complete and correct copies of the
charter and bylaws of Aether and Merger Sub, as amended to date, have been made
available to Riverbed. Such Organizational Documents are in full force and
effect and have not been amended or modified in any respect. Aether is not in
violation of any provision of its Organizational Documents. No Subsidiary of
Aether is in violation of any provision of its Organizational Documents.
Section 5.3 Capitalization. The authorized capital stock of Aether
consists of 75,000,000 shares of Aether Common Stock, par value $.01 per share,
and 1,000,000 shares of preferred stock of Aether, par value $.01 per share. As
of December 31, 1999, (i) (A) 27,154,398 shares of Aether Common Stock were
issued and outstanding, all of which were validly issued, fully paid and
nonassessable, and (B) zero (0) shares of preferred stock of Aether were issued
and outstanding; and (ii)(A) 5,400,000 shares of Aether Common Stock were
reserved for issuance under Aether employee or director benefit programs
(collectively, the "Aether Stock Plans"), (B) zero (0) shares of Aether Common
Stock were classified as treasury shares, and (C) Options to purchase 4,820,217
shares of Aether Common Stock were issued and outstanding, all of which were
validly issued, fully paid and nonassessable. Except as set forth above, no
shares of Aether Common Stock or other voting securities of Aether are issued,
reserved for issuance or outstanding. All shares of Aether Common Stock subject
to issuance as aforesaid and all shares of Aether Common Stock subject to
issuance as Merger Consideration, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and nonassessable. There are no
outstanding contractual obligations of Aether to repurchase, redeem or otherwise
acquire any shares of Aether Common Stock or any other shares of capital stock
of Aether, or make any material investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary of
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Aether or any other Person, other than a wholly-owned Subsidiary of Aether or a
Person wholly-owned by one or more wholly-owned Subsidiaries of Aether. Each
outstanding share of capital stock of each Subsidiary of Aether is duly
authorized, validly issued, fully paid and nonassessable and each such share
owned by Aether or any Subsidiary of Aether is owned free and clear of any Liens
except that the shares of OmniSky Corporation that are owned by a Subsidiary of
Aether are subject to certain Liens. All of the shares of Aether Common Stock to
be issued pursuant to the terms of this Agreement have been duly authorized and,
upon consummation of the Merger, shall be validly issued, fully paid and
nonassessable.
Section 5.4 Authority Relative to This Agreement. Aether and Merger Sub
have all necessary corporate power and authority to execute and deliver this
Agreement, and to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Aether and Merger
Sub, the performance by Aether and Merger Sub of its obligations hereunder and
the consummation by Aether and Merger Sub of the Transactions have been duly and
validly approved by the Board of Directors of Aether and Merger Sub, and no
other corporate proceedings on the part of Aether and Merger Sub are necessary
to authorize this Agreement or to consummate the Transactions (other than the
Merger Filing) . This Agreement has been duly and validly executed and delivered
by Aether and Merger Sub and, assuming the due authorization, execution and
delivery thereof by Riverbed, constitutes the legal, valid and binding
obligation of Aether and Merger Sub, enforceable against Aether and Merger Sub
in accordance with its terms, except as enforceability may be limited by
bankruptcy and other similar laws and general principles of equity.
Section 5.5 No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by Aether and Merger Sub do not, and the performance
of their respective obligations under this Agreement and the consummation of the
Transactions by Aether and Merger Sub will not, (a) conflict with, result in a
breach of, cause a dissolution or require the consent or approval of any Person
under, or violate any provision of, the Organizational Documents of Aether or
Merger Sub, (b) require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, except for (i)
applicable requirements, if any, of the Exchange Act, the Securities Act, the
Blue Sky Laws and the HSR Act, in each case, including any rules and regulations
promulgated thereunder, (ii) the Merger Filing, (iii) the Riverbed Stockholder
Approval, and (iv) such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not have a Material Adverse
Effect, (c) subject to the making of the filings and obtaining the approvals
identified in clause (b), conflict with or violate any Law, judgment, order,
writ, injunction or decree applicable to Aether or Merger Sub or by which any
property or asset of Aether or Merger Sub is bound or affected, which conflict
or violation would result in a loss of material benefits to or in any material
liability to Riverbed, Aether or the Surviving Corporation, or (d) conflict with
or result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, result in the
loss by Aether or Merger Sub or modification in a manner materially adverse to
Aether or Merger Sub of any right or benefit under, or give to others any right
of termination, amendment, acceleration, repurchase or repayment, increased
payments or cancellation of, or result in the creation of a Lien or other
encumbrance on any Aether Common Stock issued pursuant to the Merger or any
material property or asset of Aether or Merger Sub or any Subsidiary of Aether
or Merger Sub pursuant to, any Contract of Aether or
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Merger Sub, except, in each case, such as would not, individually or in the
aggregate have a Material Adverse Effect on Aether.
Section 5.6 SEC Reports and Financial Statements. Each form, report,
schedule, registration statement and definitive proxy statement filed by Aether
with the SEC prior to the date hereof (as such documents have been amended prior
to the date hereof, the "Aether SEC Reports"), as of their respective dates,
complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations thereunder.
None of the Aether SEC Reports, as of the date on which such SEC Report was
declared effective pursuant to the Securities Act or the date on which such SEC
Report was filed pursuant to the Exchange Act, as applicable, contained or
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
consolidated financial statements of Aether and its Subsidiaries included in
such reports comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with GAAP, consistently
applied (except, in the case of the unaudited interim financial statements, as
permitted by Form 10-Q of the SEC) and fairly present in all material respects
(subject, in the case of the unaudited interim financial statements, to normal,
year-end audit adjustments) the consolidated financial position of Aether and
its Subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. Except as set forth in
Schedule 5.6 to the Aether Disclosure Letter, since September 30, 1999, neither
Aether nor any of its Subsidiaries has incurred any liabilities or obligations
(whether absolute, accrued, fixed, contingent, liquidated, unliquidated or
otherwise and whether due or to become due) of any nature, except liabilities,
obligations or contingencies (a) which are reflected on the consolidated balance
sheet of Aether and its Subsidiaries as at September 30, 1999 (including the
notes thereto) or (b) which (i) were incurred in the ordinary course of business
after September 30, 1999 and consistent with past practices, or (ii) are
disclosed in the Aether SEC Reports. Since October 20, 1999, Aether has timely
filed with the SEC all forms, reports and other documents required to be filed
prior to the date hereof, and no Subsidiary of Aether has filed, or been
required to file, any form, report or other document with the SEC, in each case,
pursuant to the Securities Act, the Exchange Act or the rules and regulations
thereunder. Since September 30, 1999, except as described in the Aether SEC
Reports, there has been no change in any of the significant accounting
(including tax accounting) policies, practices or procedures of Aether or any
Subsidiary of Aether, except changes resulting from changes in accounting
pronouncements of Financial Accounting Standards Boards or changes in applicable
laws or rules or regulations thereunder.
Section 5.7 Brokers. Other than BancBoston Xxxxxxxxx Xxxxxxxx, Inc., no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Transactions based on any
arrangement or agreement made by or on behalf of Aether.
Section 5.8 Conformity with Law; Relations with Governments; Litigation.
Aether and its Subsidiaries have not violated any law or regulation or any order
of any Governmental Authority having jurisdiction over it which would have a
Material Adverse Effect. Aether has not offered anything of value to any
governmental official, political party or candidate for
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government office nor has it otherwise taken any action that would cause Aether
to be in violation of the Foreign Corrupt Practices Act of 1977, as amended.
Schedule 5.8 to the Aether Disclosure Letter lists, as of the date hereof, and
will list as of the Closing Date, all claims, suits, actions or proceedings
pending or, to the Knowledge of each of Aether and its Subsidiaries, threatened
or contemplated, including any investigations or reviews by any Governmental
Authority pending or, to the Knowledge of each of Aether and its Subsidiaries,
threatened or contemplated, against, relating to or affecting each of Aether and
its Subsidiaries. There is no judgment, decree, order, injunction, stipulation,
award or writ of any Governmental Authority outstanding against Aether or any of
its Subsidiaries.
Section 5.9 Transactions with Affiliates. Except as set forth in Schedule
5.9 to the Aether Disclosure Letter, since October 20, 1999, each of Aether and
its Subsidiaries has not entered into any transaction with any current director,
officer or 5% or larger shareholder of each of Aether and its Subsidiaries.
Section 5.10 Merger Sub. Except for obligations incurred in connection
with its incorporation or organization or the negotiation and consummation of
this Agreement and the transactions contemplated hereby, Merger Sub has neither
incurred any obligation or liability nor engaged in any business or activity of
any type or kind whatsoever or entered into any agreement or arrangement with
any person.
Section 5.11 Reliance. In entering into this Agreement, Aether and Merger
Sub have relied solely on representations made in this Agreement and any
certificates and documents required to be provided by Riverbed pursuant to this
Agreement. Aether and Merger Sub have been represented by counsel and has had
sufficient opportunity to examine and understand the business and assets of
Riverbed.
Section 5.12 Disclosure. All written agreements, lists, schedules,
instruments, exhibits, documents, certificates, reports, statements and other
writings furnished to Riverbed and any of its Representatives pursuant hereto or
in connection with this Agreement or the transactions contemplated hereby, are
and will be complete and true copies of such materials. No representation or
warranty by Aether contained in this Agreement, in the Schedules attached to the
Disclosure Letter or in any certificate furnished or to be furnished in
connection herewith or pursuant hereto contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary in order to make any statement contained herein or therein not
misleading, except for those facts already stated in an Aether SEC Report.
Section 5.13 Absence of Changes. Except as set forth in Schedule 5.13 to
the Aether Disclosure Letter, since the date of the most recent Aether SEC
Report that has been filed with the SEC, there has not occurred or arisen any
event that, individually or in the aggregate, has had or, insofar as can be
reasonably foreseen, would have a Material Adverse Effect on Aether or any of
its Subsidiaries.
Section 5.14 Information Supplied. None of the information supplied or to
be supplied by Aether for inclusion in the disclosure document relating to the
Riverbed Stockholder Meeting to be held in connection with the Merger (the
"Disclosure Document") will, at the date mailed to stockholders and at the time
of the Riverbed Stockholder Meeting, contain any untrue statement
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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. If at any time prior to
the Effective Time any event in respect of Aether, its officers and directors or
any of its Subsidiaries should occur which is required to be described in an
amendment of, or a supplement to, the Disclosure Document, Aether shall promptly
so advise Riverbed and such event shall be so described, and such amendment or
supplement shall be promptly, to the extent required by Law, disseminated by
Riverbed to the stockholders of Riverbed.
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ARTICLE VI.
COVENANTS
Section 6.1 Notification of Certain Matters. Each of the parties hereto
shall give prompt notice to the other parties hereto of the occurrence or
nonoccurrence of any event to which such party becomes aware, the occurrence or
nonoccurrence of which would be reasonably likely to cause (a) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect, or (b) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied in any material
respect. The delivery of any notice pursuant to this Section 6.1 shall not limit
or otherwise affect the remedies available hereunder to the party receiving such
notice.
Section 6.2 Further Action, Reasonable Efforts; Consents and Approvals.
Upon the terms and subject to the conditions hereof, each of the parties hereto
shall use commercially reasonable efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions in as expeditious a manner as is reasonably
practicable, including, without limitation, using commercially reasonable
efforts to obtain all licenses, permits, consents, approvals, authorizations,
certificates, qualifications and orders of, and make all filings and required
submissions with, all Governmental Authorities, and all shareholders, lenders
and partners of, and parties to Contracts with, Aether, Riverbed or any other
Person, in each case, as are reasonably necessary for the consummation of the
Transactions (collectively "Consents"), except for such consents, authorizations
filings, approvals and registrations which if not obtained or made would not
have a Material Adverse Effect on Riverbed or Aether. Riverbed shall, as soon as
possible prior to the Closing, deliver to Aether copies of all Consents obtained
by Riverbed. Aether shall, as soon as possible prior to the Closing, deliver to
Riverbed copies of all Consents obtained by Aether. In case at any time after
the Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, each of Aether and Riverbed shall use its
commercially reasonable efforts to take all such action. Prior to the Closing,
each party shall use its commercially reasonable efforts not to take any action,
or enter into any transaction, that would cause any of its representations or
warranties contained in this Agreement to be untrue.
Section 6.3 Regulatory Filings.
(a) On or before February 15, 2000, each of the parties will file and
Riverbed will cause any shareholder of Riverbed Capital Stock obligated to file
a Pre-Merger Notification and Report Forms if required under the HSR Act ("HSR
Filings").
(b) Without limiting the generality of Section 6.2 hereof, Aether and
Riverbed shall (i) take promptly all actions necessary to make the filings
required of Aether, Riverbed, or any of their respective Affiliates in order to
obtain any Requisite Regulatory Approval, (ii) comply at the earliest
practicable date with any request for information or documentary material
received by Aether, Riverbed, or any of their respective Affiliates from any
Governmental Authority and
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(iii) cooperate with each other in connection with any such filing and with
resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement commenced by any Governmental Authority.
(c) In furtherance and not in limitation of the covenants contained in
Section 6.2 and Section 6.3 (b) hereof, each of Aether and Riverbed shall use
its reasonable best efforts to resolve such objections, if any, as may be
asserted with respect to the Merger or any other transactions contemplated by
this Agreement under any applicable law. If any administrative, judicial or
legislative action or proceeding is instituted (or threatened to be instituted)
challenging the Merger or any other transaction contemplated by this Agreement
as violative of any applicable law, each of Aether and Riverbed shall cooperate
and use its reasonable best efforts vigorously to contest and resist any such
action or proceeding, and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of the Merger or any other transaction contemplated by the
Agreement.
(d) Each of Aether and Riverbed shall promptly inform the other of any
communications received by such party or any of its Affiliates from any
Governmental Authority regarding any of the transactions contemplated hereby.
Each of Aether and Riverbed shall advise the other promptly of any
understandings, undertakings or agreements which such party or any of its
Affiliates proposes to make or enter into with any Governmental Authority in
connection with the transactions contemplated hereby. Aether or any of its
Affiliates shall not be obligated to enter into any undertakings, understandings
or agreements with any Governmental Authority if such undertakings,
understandings or agreements are reasonably unacceptable to Aether.
Section 6.4 Conduct of Business of Riverbed Pending the Closing. From the
date hereof through the Closing, except as expressly permitted or contemplated
by this Agreement, unless Aether shall otherwise agree in writing prior to the
taking of any action prohibited by the terms of this Section 6.4, Riverbed and
its Subsidiaries shall conduct their operations and business in the ordinary and
usual course of business and use reasonable best efforts (which shall not
include any offer to pay any retention or stay bonus without Aether's consent)
to keep available the services of its present officers and key employees and
preserve the goodwill and business relationships with all Persons having
business relationships with it. Without limiting the generality of the
foregoing, and except as otherwise expressly permitted by this Agreement, prior
to the Closing, without the prior written consent of Aether, neither Riverbed
nor any of its Subsidiaries shall:
(a) amend or modify its Organizational Documents;
(b) issue, sell, pledge or dispose of, grant or otherwise create, or
agree to issue, sell, pledge or dispose of, grant or otherwise create any
capital stock or other equity securities, any debt or other securities
convertible into or exchangeable for any of its capital stock or other equity
securities, or any Option with respect thereto, except for (i) the issuance of
Riverbed Common Stock upon conversion of the Riverbed Preferred Stock, (ii) upon
the exercise of outstanding Riverbed Options, or (iii) the issuance of up to
75,000 Options to be granted to Riverbed management with a minimum exercise
price of $13.53 per share;
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(c) purchase, redeem or otherwise acquire or retire, or offer to
purchase, redeem or otherwise acquire or retire, any of its capital stock or
other equity securities (including any Options with respect to any of its
capital stock or other equity securities and any securities convertible or
exchangeable into any of its capital stock or other equity securities) or any
long term debt;
(d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock or other equity securities, or subdivide, reclassify,
recapitalize, split, combine or exchange any of its capital stock or other
equity securities;
(e) incur or become contingently liable with respect to any indebtedness
for borrowed money or guarantee any such indebtedness or issue any debt
securities, except for additional indebtedness incurred under existing debt
agreements or credit facilities, or new credit facilities;
(f) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business entity;
(g) mortgage or otherwise encumber or subject to any Lien other than
Permitted Liens, or sell, transfer or otherwise dispose of, any assets or
properties that are material, individually or in the aggregate, to Riverbed and
its Subsidiaries, taken as a whole, other than Liens incurred in the ordinary
course of business consistent with past practice, and sales and dispositions in
the ordinary course of business consistent with past practice;
(h) except in the ordinary course of business consistent with past
practice (which shall include normal periodic performance reviews and related
benefit increases) or pursuant to the existing terms of any collective
bargaining agreement, Riverbed will not, nor will it permit any of the
Subsidiaries to (i) increase in any manner the compensation of any of the
officers or other employees of Riverbed or any of its Subsidiaries other than
the payment of customary year-end bonuses, which do not exceed $250,000 in the
aggregate; (ii) adopt, amend, terminate, or increase liability with respect to
any Riverbed Plan or Riverbed Benefit Arrangement or commit to do so; or (iii)
enter into, or negotiate, any collective bargaining agreement with respect to
employees of Riverbed or any of its Subsidiaries except as required by law, in
which case Riverbed or such Subsidiary shall first notify Aether;
(i) take any action, other than reasonable actions in the ordinary course
of business, with respect to accounting policies or procedures (including Tax
accounting policies, procedures and elections relating to Taxes that would
apply to Riverbed and its Subsidiaries, Aether or the Surviving Corporation
after the Merger), except as may be required by GAAP, consistently applied, or
Law;
(j) settle any material audit or litigation or, except as required by
Law, amend in any respect any material Tax Return;
(k) enter into, modify, amend, extend or terminate any agreement or
agreements for goods, property rights or services with (i) any director or
officer, or any Affiliate of any such Person, or (ii) any other Person which
obligates Riverbed, or any Affiliate of Riverbed, to pay in
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excess of $25,000 in any twelve (12) month period; provided, however, that
Riverbed may offer employment to individuals consistent with past practice; and
(l) authorize any of, or commit or agree to take any of, the foregoing
actions. Section 6.5 Conduct of Business of Aether Pending the Closing. From
the date hereof through the earlier of (i) the Closing or (ii) the termination
of this Agreement, without the prior written consent of Riverbed, neither
Aether nor any of its Subsidiaries shall:
(a) amend or modify its Organizational Documents;
(b) issue, sell, pledge or dispose of, grant or otherwise create, or
agree to issue, sell, pledge or dispose of, grant or otherwise create any
capital stock or other equity securities, any debt or other securities
convertible into or exchangeable for any of its capital stock or other equity
securities, or any Option with respect thereto, except for (i) the issuance of
stock upon the exercise of outstanding Aether Options or (ii) the issuance of
Aether Options pursuant to an Aether stock option plan or stock purchase plan;
(c) purchase, redeem or otherwise acquire or retire, or offer to
purchase, redeem or otherwise acquire or retire, any of its capital stock or
other equity securities (including any Options with respect to any of its
capital stock or other equity securities and any securities convertible or
exchangeable into any of its capital stock or other equity securities) or any
long term debt;
(d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock or other equity securities, or subdivide, reclassify,
recapitalize, split, combine or exchange any of its capital stock or other
equity securities;
(e) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any material business or any material
corporation, partnership, association or other business entity; and
(f) authorize any of, or commit or agree to take any of, the foregoing
actions.
Section 6.6 Nasdaq Listing. Aether agrees to authorize for listing on
Nasdaq the shares of Aether Common Stock issuable, and those required to be
reserved for issuance, in connection with the Merger, upon official notice of
issuance. To the extent necessary, Aether agrees to file a registration
statement on Form S-8 (for persons eligible therefor) for the shares of Aether
Common Stock issuable with respect to assumed Riverbed Options within 30 days
after the Effective Time, or as soon thereafter as the securities laws permit.
Section 6.7 Access to Information.
(a) From the date hereof to the Effective Time, each of Riverbed and
Aether shall (and shall cause their respective Subsidiaries and Representatives
to) afford the other's Representatives with reasonable access at all reasonable
times during normal business hours to
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its officers, employees, agents, properties, offices, plants and other
facilities, books, records and Tax Returns, and shall furnish such
Representatives with all financial, operating and other data and information as
may be reasonably requested.
(b) Each of Aether, the Merger Sub and Riverbed covenants and agrees to
maintain the confidentiality of any Confidential Information, as defined
herein, it receives from any other party or such party's Subsidiaries or
Affiliates and, except as expressly permitted in this Agreement or as required
by law or in connection with judicial proceedings, shall not disclose any such
Confidential Information to third parties. A party receiving Confidential
Information from another party shall use at least the same degree of care to
maintain its confidentiality as it uses to maintain its own Confidential
Information. A party receiving Confidential Information shall not, except in
connection with this Agreement, directly or indirectly use Confidential
Information of the disclosing party without the prior written consent of such
disclosing party. As used in this Agreement, "Confidential Information"
includes, without limitation, information not previously disclosed to the
public or to the trade by a party to this Agreement relating to its products,
facilities and methods, trade secrets and other intellectual property,
software, source code, systems, procedures, manuals, confidential reports,
product price lists, customer lists, financial information (including revenues,
costs or profits associated with any product), business plans, prospects, or
opportunities, but shall exclude any information already in the public domain.
Section 6.8 No Solicitation.
(a) Riverbed shall not, and it shall instruct its Representatives
(including, without limitation, any investment banker, attorney or accountant
retained by Riverbed or a Subsidiary of Riverbed) not to, directly or
indirectly, for or on its behalf (i) initiate, solicit or encourage any
inquiries or proposals that constitute, or could reasonably be expected to lead
to, a proposal or offer for a merger, consolidation, or business combination of
Riverbed or any of its Subsidiaries, or the sale of assets representing a
substantial portion of the assets of Riverbed and its Subsidiaries, taken as a
whole, or the sale of shares of capital stock of Riverbed or any Subsidiary
(other than to Riverbed or a Subsidiary of Riverbed or as permitted by Section
6.4 hereto), including, without limitation, by way of a tender offer or
exchange offer by any Person other than the Transactions (any of the foregoing
inquiries or proposals being referred to in this Agreement as an "Acquisition
Proposal"), (ii) engage in negotiations or discussions concerning, or provide
to any Person or entity any Confidential Information or data relating to
Riverbed or any Subsidiary of Riverbed for the purposes of, or otherwise
cooperate with or assist or participate in, facilitate or encourage, any
inquiries or the making of any Acquisition Proposal, (iii) agree to, approve or
recommend any Acquisition Proposal, or (iv) take any other action inconsistent
with the obligations and commitments assumed by Riverbed pursuant to this
Section 6.8; provided, however, that nothing contained in this Agreement shall
prevent Riverbed or its Board of Directors from furnishing Confidential
Information to, or entering into discussions or negotiations with, any person
or entity in connection with an unsolicited bona fide written Acquisition
Proposal to Riverbed or its stockholders, if and only to the extent that (1)
the Board of Directors of Riverbed determines in good faith (after consultation
with outside legal counsel) that such action is required for such Board of
Directors to comply with its fiduciary duties to stockholders under applicable
law, and (2) prior to furnishing such Confidential Information to, or entering
into discussions or negotiations with, such person or entity, Riverbed receives
from
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such person or entity an executed confidentiality agreement. Riverbed and its
Representatives will immediately cease and cause to be terminated any existing
activities, discussions or negotiations by Riverbed or its Representatives with
any parties conducted heretofore with respect to any of the foregoing. In
addition, notwithstanding the provisions of this Section 6.8, or any other
provision of this Agreement, Riverbed may withdraw, modify, or refrain from
making its recommendation in accordance with Section 6.9 .
(b) Riverbed shall (i) promptly notify Aether in writing after receipt by
Riverbed (or its Representatives) of any Acquisition Proposal or any inquiries
indicating that any Person is considering making or wishes to make an
Acquisition Proposal, which notification shall be in writing and shall contain
the principle financial terms of any such Acquisition Proposal, and (ii)
promptly notify Aether in writing after receipt of any request for Confidential
Information relating to it or any of its Subsidiaries or for access to its or
any of its Subsidiaries' properties, books or records by any person that, to
Riverbed's Knowledge, may be considering making, or has made, an Acquisition
Proposal.
Section 6.9 Riverbed Stockholder Meeting. Riverbed shall take all action
necessary, in accordance with the DGCL and Riverbed's Organizational Documents,
to call a meeting of its stockholders (the "Riverbed Meeting") to be held as
promptly as practicable after the date of this Agreement but not later than
February 25, 2000 and before terminating this Agreement to accept an
Acquisition Proposal for the purpose of considering and voting upon this
Agreement and the Merger (the "Riverbed Stockholder Approval"). The Board of
Directors of Riverbed shall recommend that the stockholders of Riverbed approve
this Agreement and the Merger; provided, however, that the Board of Directors
of Riverbed, by action of a majority of the entire Board of Directors of
Riverbed, may withdraw, modify or refrain from making such recommendation if
such Board of Directors determines in good faith, after receipt of an
Acquisition Proposal and after consultation with outside legal counsel, that
the withdrawal or modification of or failure to make such recommendation is
required for such Board of Directors to comply with its fiduciary duties under
applicable law.
Section 6.10 Preparation of the Disclosure Statements. Riverbed will, as
promptly as practicable, prepare the disclosure statements in connection with
the vote of the stockholders of Riverbed in respect of the Merger. At the
request of Riverbed and as soon as practicable, Aether shall provide Riverbed
with all information deemed necessary in order for Riverbed and Aether to
satisfy their disclosure obligations under the Securities Act in connection
with the Riverbed Stockholder Meeting, and Aether will cooperate with Riverbed
in the preparation of such disclosure statements.Section 6.11 Cooperation with
Accountants. Riverbed shall cooperate with KPMG, Aether's independent auditors,
in connection with their audit of the financial statements of Riverbed and
provide customary and reasonable representations and other documents reasonably
requested by Aether in connection with KPMG's audit of Riverbed's financial
statements.
Section 6.12 Public Announcements. At all times at or before the Closing,
neither Riverbed nor Aether shall issue or make, directly or indirectly, any
reports, statements or releases to the public with respect to this Agreement or
the Transactions contemplated hereby without the prior written consent of the
other, which consents shall not be unreasonably withheld or delayed; provided,
however, that Riverbed and Aether may, without the prior written consent of the
other, issue or make, directly or indirectly, any report, statement or release
required by
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Law (including without limitation filings with the Securities Exchange
Commission in connection with Aether's offering of securities), its fiduciary
obligations or any listing agreement or arrangement to which such Person is a
party with a national securities exchange or national market system if the
other parties to this Agreement are so notified as soon as possible in advance
of such report, statement or release and, to the extent practicable, given a
reasonable opportunity to review and comment on the report, statement or
release. The parties will agree to the text of the press releases announcing
the signing of the Agreement.
Section 6.13 Blue Sky. Aether shall use its commercially reasonable
efforts to obtain prior to the Effective Time all approvals or permits required
to carry out the transactions contemplated hereby under applicable Blue Sky
Laws in connection with the issuance of shares of Aether Common Stock in the
Merger and as contemplated by this Agreement; provided, however, that with
respect to such qualifications neither Aether nor Riverbed shall be required to
register or qualify as a foreign corporation or to take any action which would
subject it to general service of process or taxation in any jurisdiction where
any such entity is not now so subject.
Section 6.14 Registration Rights. Prior to the Effective Time, Aether
shall execute and deliver the Registration Rights Agreement. Aether has
informed Riverbed that its intends to file a registration statement registering
shares of Aether Common Stock within thirty (30) days after the Effective Time.
In connection with the filing of such registration statement, Aether covenants
and agrees to permit the stockholders of Riverbed to participate pro rata among
all the stockholders selling stock in the offering (except that NexGen
Technologies, L.L.C. shall be permitted to sell shares in preference to
Aether's other stockholders if the underwriters exercise their overallotment
option) in accordance with the number of shares of Aether Common Stock held by
each such stockholder (assuming the shares of Aether Common Stock had been
issued in the Merger).
Section 6.15 General Indemnification. Each party (the "Indemnifying
Party") covenants and agrees to indemnify, defend, protect and hold harmless
the other parties and their respective officers, directors, employees,
stockholders, assigns, successors and affiliates (individually, an "Indemnified
Party" and collectively, "Indemnified Parties") from, against and in respect
of:
(a) all liabilities, losses, claims, damages, punitive damages, causes of
action, lawsuits, administrative proceedings (including informal proceedings),
investigations, audits, demands, assessments, adjustments, judgments,
settlement payments, deficiencies, penalties, fines, interest (including
interest from the date of such damages) and costs and expenses (including
without limitation reasonable attorneys' fees and disbursements of every kind,
nature and description) (collectively, "Damages") suffered, sustained, incurred
or paid by the Indemnified Parties in connection with, resulting from or
arising out of, directly or indirectly:
(i) any breach of any representation or warranty of the
Indemnifying Party set forth in this Agreement or any
schedule or certificate, delivered by or on behalf of the
Indemnifying Party in connection herewith; or
(ii) any nonfulfillment of any covenant or agreement on the
part of the Stockholders of the Indemnifying Party or,
prior to the Effective Time, the Indemnifying Party, in
this Agreement; or
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(iii) the failure of the Merger to be treated as a
reorganization under Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code as the result of, directly or
indirectly, the actions or omissions of the Indemnifying
Party or the Indemnifying Party's Stockholders, provided,
however that the holders of shares of Riverbed Capital
Stock immediately prior to the Effective Time shall not be
considered Aether Stockholders for purposes of this
Section 6.15(a)(iii); and
(b) any and all Damages incident to any of the foregoing or to the
enforcement of this Section 6.15.
Section 6.16 Stockholder's Representative.
(a) Upon the Effective Time and without further act of any Stockholder,
the Stockholders' Representative shall be appointed as agent and
attorney-in-fact for each Stockholder, for and on behalf of each such
Stockholder, with full power and authority to represent the Stockholders and
their successors with respect to all matters arising under this Agreement and
the Escrow Agreement, and all actions taken by the Stockholders' Representative
hereunder shall be binding upon such Stockholders and their successors as if
expressly ratified and confirmed in writing by each of them. Without limiting
the generality of the foregoing, the Stockholders' Representative shall have
full power and authority, on behalf of all the Stockholders and their
successors, to interpret all the terms and provisions of this Agreement, to
dispute or fail to dispute any Claim of Damages against the Escrow Shares made
by an Indemnified Party, to assert Claims of Damages against any Indemnifying
Party, to negotiate and compromise any dispute which may arise under this
Agreement, to sign any releases or other documents with respect to any such
dispute, and to authorize delivery of Escrow Shares pursuant to the Escrow
Agreement or any other payments to be made with respect thereto. All
determinations of the Stockholders' Representative shall be decided by a
majority thereof in the event there is more than one Stockholders'
Representative.
(b) The Stockholders' Representative, or any successor hereafter
appointed, may resign and shall be discharged of his duties hereunder upon the
appointment of a successor Stockholders' Representative as hereinafter
provided. In case of such resignation, or in the event of the death or
inability to act of the Representative, a successor shall be named from among
the Stockholders by a majority of the members of the Board of Directors of who
served on such board prior to the Merger. Each such successor Stockholders'
Representative shall have all the power, authority, rights and privileges
hereby conferred upon the original Stockholders' Representative, and the term
"Stockholders' Representative" as used herein shall be deemed to include such
successor Stockholders' Representative.
(c) In performing any of their duties under this Agreement, or upon the
claimed failure to perform his duties hereunder, the Stockholders'
Representative shall not be liable to the Stockholders for any damages, losses
or expenses which they may incur as a result of any act, or failure to act
under this Agreement or the Escrow Agreement; provided, however, that the
Representative shall be liable for damages arising out of actions or omissions
that both (i) were taken or omitted not in good faith and (ii) constituted
willful default or gross negligence under this Agreement or the Escrow
Agreement. Accordingly, the Representative shall not incur any such Liability
with respect to (i) any action taken or omitted to be taken in good faith upon
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advice of his counsel given with respect to any questions relating to the
duties and responsibilities of the Stockholders' Representative hereunder; or
(ii) any action taken or omitted to be taken in reliance upon any document,
including any written notice or instructions provided for in this Agreement or
the Escrow Agreement, not only as to its due execution and to the validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, which the Stockholders' Representative shall in
good faith believe to be genuine, to have been signed or presented by the
purported proper person or persons and to conform with the provisions of this
Agreement and the Escrow Agreement. The limitation of liability provisions of
this Section shall survive the termination of this Agreement and the
resignation of the Representative. The stockholders of Riverbed shall severally
indemnify the Stockholders' Representative and hold him harmless against any
loss, liability or expense (including any expenses of legal counsel retained by
the Stockholders' Representative) incurred without willful default, gross
negligence or bad faith on the part of the Stockholders' Representative and
arising out of or in connection with the acceptance or administration of his
duties hereunder
Section 6.17 Indemnification Procedures. All claims for indemnification
under Section 6.15 ("Claims") shall be asserted and resolved as follows:
(a) In the event that any Indemnified Party has a Claim against any
Indemnifying Party which does not involve a Claim being asserted against or
sought to be collected by a third party, the Indemnified Party shall with
reasonable promptness send a Claim Notice with respect to such Claim to the
Stockholders' Representative if the Indemnified Party is an Aether Indemnified
Party or Aether if the Indemnified Party is a Riverbed Indemnified Party. The
Indemnified Party's failure to give prompt notice or to provide copies of
documents or to furnish relevant data shall not constitute a defense (in whole
or in part) to any claim by the Indemnified Party against the Indemnifying
Party for indemnification, except and only to the extent that such failure
shall have caused or increased such liability or adversely affected the ability
of the Indemnifying Party to defend against or reduce its liability. In case an
objection is made in writing in accordance with this Section 6.17, the
Indemnified Party shall have thirty (30) days to respond in a written statement
to the objection. If after such thirty (30) day period there remains a dispute
as to any Claims, the parties shall attempt in good faith for sixty (60) days
to agree upon the rights of the respective parties with respect to each of such
Claims. If the parties should so agree, a memorandum setting forth such
agreement shall be prepared and signed by both parties. The actions and
decisions of the Stockholders' Representative shall be binding upon all
Stockholders.
(b) In the event that any Claim for which the Indemnifying Party would be
liable to an Indemnified Party hereunder is asserted against an Indemnified
Party by a third party, the Indemnified Party shall with reasonable promptness
notify the Stockholders' Representative if the Indemnified Party is an Aether
Indemnified Party or Aether if the Indemnified Party is a Riverbed Indemnified
Party of such Claim, specifying the nature of such Claim and the amount or the
reasonably estimated amount thereof to the extent then feasible (which estimate
shall not be conclusive of the final amount of such Claim) (the "Claim
Notice"). The Indemnifying Party (or its representative) shall have 30 days
from the receipt of the Claim Notice (the "Notice Period") to notify the
Indemnified Party (i) whether or not such party disputes the liability to the
Indemnified Party hereunder with respect to such Claim and (ii) if such party
does not dispute
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such liability, whether or not the Indemnifying Party desires, at the sole cost
and expense of the Indemnifying Party, to defend against such Claim, provided
that such party is hereby authorized (but not obligated) prior to and during
the Notice Period to file any motion, answer or other pleading and to take any
other action which the Indemnifying Party shall deem necessary or appropriate
to protect the Indemnifying Party's interests. In the event that Indemnifying
Party (or its representative) notifies the Indemnified Party within the Notice
Period that the Indemnifying Party does not dispute the Indemnifying Party's
obligation to indemnity hereunder and desires to defend the Indemnified Party
against such Claim and except as hereinafter provided, such party shall have
the right to defend by appropriate proceedings, which proceedings shall be
promptly settled or prosecuted by such party to a final conclusion, provided
that such party may not settle any matter (in whole or in part) without the
prior written consent of the Indemnified Party (which shall not be unreasonably
withheld) and unless such settlement includes a complete and unconditional
release of the Indemnified Party. If the Indemnified Party desires to
participate in, but not control, any such defense or settlement the Indemnified
Party may do so at its sole cost and expense. If the Indemnifying Party elects
not to defend the Indemnified Party against such Claim, whether by failure of
such party to give the Indemnified Party timely notice as provided above or
otherwise, then the Indemnified Party, without waiving any rights against such
party, may settle or defend against any such Claim in the Indemnified Party's
sole discretion and the Indemnified Party shall be entitled to recover from the
Indemnifying Party the amount of any settlement or judgment and, on an ongoing
basis, all indemnifiable costs and expenses of the Indemnified Party with
respect thereto, including interest from the date such costs and expenses were
incurred. The actions and decisions of the Stockholders' Representative shall
be binding upon all of the persons entitled to the Merger Consideration.
(c) If at any time, in the reasonable opinion of the Indemnified Party,
notice of which shall be given in writing to the Stockholders' Representative
if the Indemnified Party is an Aether Indemnified Party or Aether if the
Indemnified Party is a Riverbed Indemnified Party, any such Claim seeks or will
likely result in material prospective or other relief which could have a
Material Adverse Effect on the assets, liabilities (including without
limitation Tax liabilities), financial condition or results of operations of
any Indemnified Party or Merger Sub or any Subsidiary, the Indemnified Party
shall have the right to control or assume (as the case may be) the defense of
any such Claim and the amount of any judgment or settlement and the reasonable
costs and expenses of defense shall be included as part of the indemnification
obligations of the Indemnifying Party hereunder, provided that such party may
not settle any matter (in whole or in part) without the prior written consent
of the Indemnified Party (which shall not be unreasonably withheld) unless such
settlement includes a complete and unconditional release of the Indemnifying
Party. If the Indemnified Party should elect to exercise such right, the
Stockholders' Representative if the Indemnified Party is an Aether Indemnified
Party or Aether if the Indemnified Party is a Riverbed Indemnified Party shall
have the right to participate in, but not control, the defense of such claim or
demand at the sole cost and expense of the Indemnifying Party.
(d) Nothing herein shall be deemed to prevent an Indemnified Party from
making a claim, and an Indemnified Party may make a claim hereunder, for
potential or contingent claims or demands provided the Claim Notice sets forth
the specific basis for any such potential or
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contingent claim or demand to the extent then feasible and the Indemnified
Party has reasonable grounds to believe that such a claim or demand may be
made.
(e) The Indemnified Party's failure to give reasonably prompt notice as
required by this Section 6.17 of any actual, threatened or possible claim or
demand which may give rise to a right of indemnification hereunder shall not
relieve the Indemnifying Party of any liability which the Indemnifying Party
may have to the Indemnified Party unless the failure to give such notice
materially and adversely prejudiced the Indemnifying Party.
(f) The parties will make appropriate adjustments for any Tax benefits,
Tax detriments or insurance proceeds in determining the amount of any
indemnification obligation under Section 6.15, provided that no Indemnified
Party shall be obligated to continue pursuing any payment pursuant to the terms
of any insurance policy.
Section 6.18 Exclusive Remedy.
(a) Aether and its Subsidiaries shall not be entitled to any
indemnification for Damages under this Agreement, unless and until the
aggregate amount of Damages exceeds $1,000,000, in which case Aether shall only
be entitled to the amount of Damages in excess of $1,000,000. Aether's sole and
exclusive right to compensation for the indemnification obligations set forth
in this Agreement or otherwise shall be limited to claims against the Escrow
Shares and Aether shall have no right to pursue any Claims under this Agreement
or otherwise against any former holder of Riverbed Capital Stock. For purposes
of the preceding sentence, the value of the Escrow Shares used to satisfy
payments of amounts owed to Aether shall be the Average Aether Stock Price for
the five Trading Days prior to the date of any payment of Escrow Shares to
offset amounts pursuant to this Section 6.18.
(b) Riverbed and its Subsidiaries shall not be entitled to any
indemnification for Damages under this Agreement, unless and until the
aggregate amount of Damages exceeds $1,000,000, in which case Riverbed shall
only be entitled to the amount of Damages in excess of $1,000,000. Riverbed's
sole and exclusive right to compensation for the Indemnification set forth in
this Agreement shall be limited to an amount not to exceed $40,467,600 (which
amount equals the product of 270,000 multiplied by $149.88).
(c) After the Closing, to the extent permitted by Law, the indemnities
set forth in Section 6.15 and Section 6.17 shall be the exclusive remedies of
the parties hereto and their respective officers, directors, employees, agents
and Affiliates for any misrepresentation, breach of warranty or breach of any
covenant or agreement contained in this Agreement, and the parties shall not be
entitled to a rescission of this Agreement or any further indemnification
rights or claims of any nature whatsoever in respect thereof, all of which the
parties hereto hereby waive
(d) Each Riverbed director, officer and stockholder waives any right of
contribution, indemnification or other similar right against Merger Sub or
Aether arising out of any Claim for indemnification under this Agreement. Upon
the Closing, Riverbed's rights to indemnification pursuant to Section 6.15
shall automatically be assigned to the Stockholders.
(e) An Indemnified Party's right to indemnification under the Agreement
shall terminate on the later to occur of (i) the first anniversary of the
Closing Date or (ii) with respect
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to a Claim made prior to the first anniversary of the Closing Date, the
resolution of such Claim pursuant to Section 6.17 or as otherwise provided in
the Escrow Agreement.
Section 6.19 Directors' and Officers' Indemnification and Insurance.
(a) From and after the Effective Time, subject to the limitations set
forth in the first sentence of Section 6.18(d), the Surviving Corporation
shall, Section 6.15, indemnify, defend and hold harmless the present and former
officers and directors of Riverbed and its Subsidiaries (the "Indemnified
Officers/Directors") against all losses, expenses (including attorneys fees),
claims, damages, liabilities or amounts ("Losses") that are paid in settlement
(provided that such settlement has been approved by Aether, such approval not
to be unreasonably withheld) of, or otherwise in connection with, any claim,
action, suit, proceeding or investigation, based in whole or in part on the
fact that such person is or was a director or officer of Riverbed and arising
out of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the Transactions), in each case, to the full
extent permitted under the DGCL and Riverbed's articles of incorporation and
bylaws (to the extent permitted by applicable law), and under any agreements as
in effect on the date of this Agreement (true and correct copies of which have
been previously provided to Aether) (including rights to reimbursement or
advancement of expenses and exculpation from liability).
(b) The Surviving Corporation shall keep in effect provisions in its
articles of incorporation and bylaws providing for exculpation of director
liability and its indemnification of the Indemnified Officers/Directors to the
fullest extent permitted under the DGCL, which provisions shall not be amended
except as required by applicable law or except to make changes permitted by law
that would enlarge the right of indemnification of the Indemnified
Officers/Directors, provided, however, that the certificate of incorporation,
bylaws and any indemnification agreements shall not provide for exculpation of
director liability and indemnification of the Indemnified Officers/Directors
for Claims under the Agreement which are conclusively determined to be
satisfied by the Escrow Shares and Escrow Proceeds (though until such time that
such Claim is conclusively determined, advancement of expenses by the Surviving
Corporation will be required to the extent required under the Organizational
Documents and indemnification agreements). The Surviving Corporation shall keep
in effect and comply with the terms and conditions of the indemnification
agreements between Riverbed and each of its directors in effect as of the date
of this Agreement.
(c) For a period of three years after the Effective Time, the Surviving
Corporation shall maintain in effect the current policies of directors' and
officers' liability insurance maintained by Riverbed, a true and correct
summary of which is set forth on Schedule 6.19 to the Disclosure Letter, or
policies providing substantially the same coverage, covering persons who are
currently covered by Riverbed's officers' and directors' liability insurance
policies with respect to actions or omissions occurring at or prior to the
Effective Time, to the extent that such policies are available; provided,
however, that policies of at least the same coverage containing terms and
conditions which are no less advantageous to the insureds may be substituted
therefor, but, in no event shall the Surviving Corporation be required to spend
more than an amount per year equal to 150% of the current annual premiums paid
by Riverbed for such insurance.
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(d) The provisions of this Section 6.19 shall survive the consummation of
the Merger and expressly are intended to benefit each of the Indemnified
Officers/Directors.
Section 6.20 Tax-Free Reorganization. Aether, Merger Sub and Riverbed
each acknowledges and agrees that (i) it intends the Merger to constitute a
reorganization within the meaning of Section 368(a)(2)(E) of the Code and (ii)
to the extent permissible by law, each will report the Merger as such a
reorganization in any and all federal, state and local income Tax returns filed
by it. No party shall take any action either prior to or after the Closing Date
that results in the Merger failing to qualify as a "reorganization" under
Section 368(a) (2)(E) of the Code. Aether, Merger Sub and Riverbed will each
execute and deliver to Xxxxxx, Xxxxxx & Xxxxxxxxx and Xxxx Xxxxxxx the tax
representation letters described in Section 7.1(g).
Section 6.21 Board Representation. The Board of Directors of Aether will
take all actions reasonably necessary to cause the Aether's Board of Directors,
immediately after the Effective Time, to consist of 12 persons, two of whom
shall have been designated by the Board of Directors of the Riverbed prior to
the Effective Time (including E. Xxxxx Xxxxxxx III). If, prior to the Effective
Time, any of the designees of Riverbed shall decline or be unable to serve as a
director of Aether immediately after the Merger, Riverbed shall designate
another person to serve in such person's stead.
Section 6.22 Notification of Certain Matters. Riverbed shall give prompt
notice to Aether and Merger Sub, and Aether and Merger Sub shall give prompt
notice to Riverbed, of (i) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time, (ii) any
material failure of the Riverbed, Aether or Merger Sub, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder, (iii) any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement, or (iv) any
facts or circumstances arise that could reasonably be expected to result in a
Material Adverse Effect.
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ARTICLE VII.
CONDITIONS TO THE MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to this Agreement to effect the Merger
shall be subject to the following conditions:
(a) All consents, approvals and action of any Governmental Authority
required to permit the consummation of the Transactions shall have been
obtained or made, free of any condition that would have a Material Adverse
Effect on Aether or Riverbed.
(b) No action shall have been taken, and no statute, rule, regulation,
executive order, judgment, decree, or injunction (other than a temporary
restraining order) shall have been enacted, entered, promulgated or enforced
(and not repealed, superseded, lifted or otherwise made inapplicable), by any
court of competent jurisdiction or Governmental Authority which restrains,
enjoins or otherwise prohibits the consummation of the Merger (each party
agreeing to use its commercially reasonable efforts to avoid the effect of any
such statute, rule, regulation or order or to have any such order, judgment,
decree or injunction lifted).
(c) Any applicable waiting period under the HSR Act shall have expired or
been terminated.
(d) Riverbed shall have received the Riverbed Stockholder Approval.
(e) The Registration Rights Agreement shall have been executed by each of
the parties to it.
(f) The parties hereto and the Escrow Agent shall have entered into the
Escrow Agreement and 270,000 shares of Aether Common Stock shall have been
deposited with the Escrow Agent.
(g) Aether, Merger Sub and Riverbed shall have agreed on customary tax
representation letters to be delivered to Xxxxxx, Xxxxxx & Xxxxxxxxx for
purposes of the opinion described in Section 7.3(j) and to Xxxx Xxxxxxx for
purposes of the opinion set forth in Section 7.2(f).
Section 7.2 Conditions to Obligations of Riverbed to Effect the Merger.
The obligations of Riverbed to effect the Merger are subject to the
satisfaction of the following conditions, unless waived by Riverbed:
(a) The representations and warranties of Aether and Merger Sub contained
herein shall be true and accurate at and as of the Effective Time as though
made at the Effective Time (except to the extent a representation or warranty
speaks specifically as of an earlier date or has become untrue or inaccurate
because of Transactions contemplated herein).
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(b) Aether and Merger Sub shall have, in all material respects, performed
all obligations and complied with all covenants required by this Agreement to
be performed or complied with by them prior to the Effective Time.
(c) Aether shall have delivered to Riverbed a certificate, dated the
Effective Time and signed by its Chief Executive Officer or Chief Financial
Officer evidencing compliance with Section 7.2(a) and (b).
(d) Riverbed shall have received an opinion of Xxxxxx, Xxxxxx &
Xxxxxxxxx, counsel to Aether and Merger Sub, in form and substance reasonably
satisfactory to Riverbed, addressing the matters set forth in Exhibit B.
(e) The Average Aether Stock Price for the five Trading Days preceding
the Closing will be at least $50.00.
(f) Riverbed shall have received an opinion from Xxxx Xxxxxxx in form and
substance reasonably satisfactory to Riverbed dated as of the Closing Date and
to the effect that the Merger will be treated as a reorganization within the
meaning of Section 368(a) of the Code.
(g) Aether shall not have experienced any Material Adverse Effects;
provided, however, Aether shall not be deemed to have experienced a Material
Adverse Effect solely as a result of a decline or drop in the trading price of
Aether Common Stock, and Riverbed shall have received a certificate signed on
behalf of Aether dated the Closing Date to such effect.
Section 7.3 Conditions to Obligations of Aether and Merger Sub to Effect
the Merger. The obligations of Aether and Merger Sub to effect the Merger are
subject to the satisfaction of the following conditions, unless waived by
Aether and Merger Sub:
(a) The representations and warranties of each of Riverbed and its
Subsidiaries contained herein shall be true and accurate at and as of the
Effective Time as though made at the Effective Time (except in each case to the
extent a representation or warranty speaks specifically as of an earlier date
or has become untrue or inaccurate because of Transactions contemplated
herein).
(b) Riverbed shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied with by it
prior to the Effective Time.
(c) Riverbed shall have delivered to Aether a certificate, dated the
Effective Time and signed by its Chief Executive Officer or Chief Financial
Officer, evidencing compliance with Section 7.3(a) and (b).
(d) Aether and Merger Sub shall have received an opinion of Xxxx Xxxxxxx,
counsel to Riverbed, in form and substance reasonably satisfactory to Aether
and Merger Sub, addressing the matters set forth in Exhibit C.
(e) Shareholders of Riverbed representing a sufficient percentage of
Riverbed's voting securities to approve the merger shall have executed Voting
Agreements which shall have been received by Aether and which shall be in full
force and effect and shall not have
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been modified or terminated without the written consent of Aether.
(f) Xxxxx Xxxxxxx and Xxxxx Xxxxxx shall have confirmed in writing to
Aether, through an Employment Agreement or otherwise, (i) that they are thereby
waiving (A) any treatment of the Merger as a "Change of Control" for purposes
of their Options and (B) any argument that their employment by Riverbed after
the Closing in the positions of Chief Executive Officer or Chief Technology
Officer, respectively, is or could be a "material reduction in job
responsibilities" for purposes of any employment or option agreement, and (ii)
that they remain bound by the restrictive covenants in their Option agreements
and other Riverbed employment and terms and conditions agreements after
consummation of the Merger as though no Merger had occurred.
(g) The Palm Computing Contracts shall be in full force and effect.
(h) Riverbed shall not have experienced any Material Adverse Effects and
Aether shall have received a certificate signed on behalf of Riverbed dated the
Closing Date to such effect.
(i) A Confirmation and Non-Compete Agreement shall have been executed by
Noblestar Systems Corporation.
(j) Aether and Merger Sub shall have received an opinion from Xxxxxx,
Xxxxxx & Xxxxxxxxx in form and substance reasonably satisfactory to Aether and
Merger Sub dated as of the Closing Date and to the effect that the Merger will
be treated as a reorganization within the meaning of Section 368(a) of the
Code.
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ARTICLE VIII.
TERMINATION, WAIVER, AMENDMENT AND CLOSING
Section 8.1 Termination. This Agreement may be terminated and abandoned
at any time prior to the Effective Time, whether before or after approval of
this Agreement or the Merger by the stockholders of Riverbed:
(a) by the mutual written consent of Riverbed and Aether;
(b) by Riverbed or Aether, if (i) the Effective Time shall not have
occurred on or before 5:00 p.m. Washington, D.C. time on the date thirty (30)
days after the date on which the last required HSR Filing is made, (ii) any
Governmental Authority, the consent of which is a condition to the obligations
of Riverbed and Aether to consummate the Transactions, shall have determined
not to grant its consent and all appeals of such determination shall have been
taken and have been unsuccessful or (iii) any court of competent jurisdiction
shall have issued an order, judgment or decree (other than a temporary
restraining order) restraining, enjoining or otherwise prohibiting the Merger
and such order, judgment or decree shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement pursuant to
clause (i) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date;
(c) by Riverbed, if there has been a breach by Aether of any
representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within ten (10) Business Days following receipt
by Aether of notice of such breach from Riverbed; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(c) shall not be
available to Riverbed if Riverbed, at such time, is in breach of any
representation, warranty, covenant or agreement set forth in this Agreement;
(d) by Aether, if there has been a breach by Riverbed of any
representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within ten (10) Business Days following receipt
by Riverbed of notice of such breach from Aether; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(d) shall not be
available to Aether if Aether, at such time, is in breach of any
representation, warranty, covenant or agreement set forth in this Agreement;
(e) by Aether or Riverbed if, at the Riverbed Meeting (including any
adjournment or postponement thereof) called pursuant to Section 6.9 hereof, the
Riverbed Stockholder Approval shall not have been obtained; and
(f) by Riverbed pursuant to the provisions of Section 6.8 for the
purposes of pursuing an Acquisition Proposal.
Section 8.2 Effect of Termination. In the event of termination of this
Agreement by Riverbed or Aether as provided in Section 8.1 hereof, this
Agreement shall forthwith become
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void (except Section 6.7(b), Section 8.2, Section 8.5, Section 9.1, Section
9.2, Section 9.4, Section 9.5, Section 9.6, Section 9.8, Section 9.9, Section
9.10, Section 9.11, Section 9.14, or Section 9.15) and there shall be no
liability on the part of Riverbed, Aether, Merger Sub or their respective
officers, directors, or stockholders except for any breach of a party's
obligations under Section 6.7(b), Section 8.2, Section 8.5, Section 9.1,
Section 9.2, Section 9.4, Section 9.5, Section 9.6, Section 9.7, Section 9.8,
Section 9.9, Section 9.10, Section 9.11, Section 9.14, or Section 9.15).
Notwithstanding the foregoing, no party hereto shall be relieved from liability
for any willful breach of this Agreement.
Section 8.3 Amendment or Supplement. It is understood and agreed that,
from time to time prior to the Closing, Aether and Riverbed may amend or
supplement the Schedules to the Disclosure Letter with respect to any matter
that is required to be set forth or described in such a Schedule or that is
necessary to complete or correct any information in any representation or
warranty of such party contained in this Agreement; provided, that such
amendment or supplement may only be made if a party did not have Knowledge of
such matter prior to the date of the disclosure to be amended or supplemented,
and provided further that the disclosure provided in any such amended
supplemented or revised Schedule shall in no way affect or be deemed to limit a
party's ability to terminate this Agreement and the transactions prior to the
Closing.
Section 8.4 Extension of Time, Waiver, Etc. At any time prior to the
Effective Time:
(a) Aether may extend the time for the performance of any of the
obligations or acts of Riverbed, and Riverbed may extend the time for the
performance of any of the obligations or acts of Aether or Merger Sub;
(b) Aether may waive any inaccuracies in the representations and
warranties of Riverbed contained herein or in any document delivered pursuant
hereto, and Riverbed may waive any inaccuracies in the representations and
warranties of Aether contained herein or in any document delivered pursuant
hereto; or
(c) Aether may waive compliance with any of the agreements of Riverbed
contained herein, and Riverbed may waive compliance with any of the agreements
of Aether or Merger Sub contained herein; provided, however, that no failure or
delay by Riverbed or Aether in exercising any right hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right hereunder.
Section 8.5 Termination Fee.
(a) If this Agreement is terminated pursuant to Section 8.1(e) or Section
8.1(f), then Riverbed will immediately pay to Aether a termination fee equal to
$20,000,000 in cash and the reasonable out-of-pocket expenses (not to exceed
$1,000,000) incurred by Aether in connection with this Agreement, which shall
be payable immediately upon termination of this Agreement.
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(b) The agreement contained in this Section 8.5 is an integral part of
the Transactions and constitutes liquidated damages in the event of the
occurrence of the circumstances specified in Section 8.5(a) above and not a
penalty.
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ARTICLE IX.
MISCELLANEOUS
Section 9.1 Governing Law.
(a) This Agreement and the legal relations among the parties hereto shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware without regard to its principles of conflicts of law.
(b) Each party to this Agreement shall have the right to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity or under this Agreement. In addition, each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby, (ii) agrees that such party will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (iii) agrees that such party will not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other
than a court of the United States located in the State of Delaware or a
Delaware state court. It is further agreed that any breaching or defaulting
party hereunder shall pay to the other parties hereto such out of pocket costs
and expenses, including legal and accounting fees, as are reasonably incurred
in pursuit of such parties' remedies hereunder.
Section 9.2 Entire Agreement. This Agreement, including the exhibits and
schedules attached hereto, constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, letters of intent, negotiations and discussions, whether oral
or written, of the parties, including without limitation any discussions,
commitments or agreements between the parties concerning Riverbed equity
issuances or debt financings, and there are no warranties, representations or
other agreements, express or implied, made to any party by any other party in
connection with the subject matter hereof except as specifically set forth
herein or in the documents delivered pursuant hereto or in connection herewith.
Section 9.3 Modification; Waiver. No supplement, modification, extension,
waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
Section 9.4 Notices. All notices, consents, requests, reports, demands or
other communications hereunder (collectively, "Notices") shall be in writing
and may be given personally, by registered mail, fax or by Federal Express (or
other reputable overnight delivery service):
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if to Aether or Merger Sub, to it at:
Aether Systems, Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Chief Executive Officer.
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
if to Riverbed, to it at:
Riverbed Technologies, Inc.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxx Xxxxxxx
0000 Xxxxxxxxxxxxx Xxxxx - XX
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
Xxxx X. XxXxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. All Notices shall be deemed to
have been given (i) when delivered personally, (ii) three (3) days after being
sent by registered mail with proper postage prepaid, (iii) upon transmission by
fax and receipt of confirmation of such transmission by the sender's fax
machine, or (iv) one day after being sent by Federal Express (or other
reputable overnight delivery service) with proper postage prepaid.
Section 9.5 Expenses. Whether or not the transactions contemplated by
this Agreement shall be consummated, all fees and expenses incurred by any
party hereto in connection with this Agreement shall, subject to Section 8.5
and unless Aether elects to pay all or a portion of such expenses, be borne by
such party.
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Section 9.6 Assignment. No party hereto shall have the right, power or
authority to assign or pledge this Agreement or any portion of this Agreement,
or to delegate any duties or obligations arising under this Agreement,
voluntarily, involuntarily, or by operation of law, without the prior written
consent of the other parties hereto.
Section 9.7 Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants made by Riverbed in or pursuant to
this Agreement or in any document delivered pursuant hereto shall be deemed to
have been made on the date of this Agreement (except as otherwise provided
herein) and, if a Closing occurs, as of the Closing Date and Effective Time,
subject to the provisions of Section 8.3. The representations and warranties of
Aether and Riverbed will survive the Closing and will remain in effect until,
and will expire upon, the first anniversary of the Closing Date and the
covenants of Aether and Riverbed will survive the Closing and will remain in
effect in accordance with the terms therein.
Section 9.8 Severability. Any provision or part of this Agreement which
is invalid or unenforceable in any situation in any jurisdiction shall, as to
such situation and such jurisdiction, be ineffective only to the extent of such
invalidity and shall not affect the enforceability of the remaining provisions
hereof or the validity or enforceability of any such provision in any other
situation or in any other jurisdiction.
Section 9.9 Successors and Assigns; Third Parties. Subject to and without
waiver of the provisions of Section 9.6, all of the rights, duties, benefits,
liabilities and obligations of the parties shall inure to the benefit of, and
be binding upon, their respective successors, assigns, heirs and legal
representatives. Except as specifically set forth in Section 3.2, Section 3.3,
Section 3.5, Section 3.6, Section 6.15, Section 6.16, Section 6.17, Section
6.19, Section 6.20, and Section 6.21 nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or entity,
other than the parties hereto and their successors or permitted assigns, any
rights or remedies under or by reason of this Agreement.
Section 9.10 Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
Section 9.11 Interpretation; References. Any use of masculine, feminine
or neuter pronouns herein shall not be limiting, but shall be construed as
referring to persons of any gender, as the context may require. Any use of the
singular or plural form herein shall not be limiting, but shall be construed as
referring to either the plural or singular, as the context may require.
References to a "Schedule" or an "Exhibit" are, unless otherwise specified, to
a Schedule attached to the Disclosure Letter or an Exhibit attached to this
Agreement, and references to an "Article" or a "Section" are, unless otherwise
specified, to an Article or a Section of this Agreement. The Article and
Section headings of this Agreement are for convenience of reference only and
shall not be deemed to modify, explain, restrict, alter or affect the meaning
or interpretation of any provision hereof.
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Section 9.12 Dispute Resolution and Jurisdiction.
(a) Each party to this Agreement shall appoint a Representative to
coordinate with the other party the implementation of this Agreement. If any
dispute arises with respect to either party's performance hereunder, the
Representatives shall meet to attempt to resolve such dispute, either in person
or by telephone, within two (2) Business Days after the written request of
either Representative. If the Representatives are unable to resolve such
dispute, the chief executive officer of Riverbed and the chief financial
officer of Aether shall meet, either in person or by telephone, within ten (10)
Business Days after either Representative provides written notice that the
Representatives have been unable to resolve such dispute. If such officers are
unable to resolve such dispute, either party may submit such dispute to an
independent nationally-recognized accounting firm, if such dispute is solely of
a financial nature.
Section 9.13 Exhibits, Schedules and Disclosure Letter. All exhibits and
schedules attached hereto and the Disclosure Letter are hereby incorporated by
reference as though set out in full herein.
Section 9.14 Attorneys' Fees. In the event that any party hereto brings
an action or proceeding against the other party to enforce or interpret any of
the covenants, conditions, agreements or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover all
costs and expenses of such action or proceeding, including, without limitation,
reasonable attorneys' fees, charges, disbursements and the fees and costs of
expert witnesses.
Section 9.15 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES
ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN ANY OF THE PARTIES HERETO
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY
OTHER DOCUMENT OR AGREEMENT RELATING TO THE TRANSACTIONS.
Section 9.16 Further Assurances. Each of the parties shall, without
further consideration, use reasonable efforts to execute and deliver such
additional documents and take such other action as the other parties, or any of
them, may reasonably request to carry out the intent of this Agreement and the
Transactions.
Section 9.17 Negotiation of Agreement. Each of the parties acknowledges
that it has been represented by independent counsel of its choice throughout
all negotiations that have preceded the execution of this Agreement and that it
has executed the same with consent and
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upon the advice of said independent counsel. Each party and its counsel
cooperated in the drafting and preparation of this Agreement and the documents
referred to herein, and any and all drafts relating thereto shall be deemed the
work product of the parties and may not be construed against any party by
reason of its preparation. Accordingly, any rule of law or any legal decision
that would require interpretation of any ambiguities in this Agreement against
the party that drafted it is of no application and is hereby expressly waived.
The provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
(signature page follows)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of
Merger to be duly executed and delivered as of the date first above written.
AETHER SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
RT ACQUISITION, INC.
By:
---------------------------------
Name:
Title:
RIVERBED TECHNOLOGIES, INC.
By:
---------------------------------
Name:
Title:
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