VOTING AND FIRST OFFER AGREEMENT
VOTING AND FIRST OFFER AGREEMENT, dated as of January 24, 2000 (this
"Agreement"), among Intel Corporation, a Delaware corporation (the "Principal
Stockholder"), USANi Sub LLC, a Delaware limited liability company ("Parent")
and Xxxxxxxxxx.xxx Inc., a California corporation (the "Company").
WHEREAS, the Company and Parent propose to enter into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement"), which
provides for, among other things, the merger of the Company (the "Merger") with
a wholly owned subsidiary of a newly formed Delaware corporation ("Newco") and
the concurrent contribution by Parent to Newco of all of the outstanding limited
liability interests of Internet Shopping Network LLC, a Delaware limited
liability company;
WHEREAS, the Principal Stockholder is (a) the owner of one or more
of the following securities: (i) shares of common stock of the Company, no par
value ("Company Common Stock") and (ii) warrants to acquire Company Common
Stock, in each case listed on Schedule 1, and (b) party to certain agreements
with the Company identified on Schedule 2 (the "Company Agreements"); and
WHEREAS, in order to induce Parent to enter into the Merger
Agreement, the Principal Stockholder has agreed to enter into this Agreement
with respect to (a) all the shares of Company Common Stock now owned, whether
beneficially or of record, and which may hereafter be acquired by the Principal
Stockholder and any shares of Company Common Stock over which the Principal
Stockholder has investment power or voting power, each within the meaning of
Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended (the "Shares"),
and all warrants to acquire Shares now owned and which may hereafter be acquired
(the "Warrants"), and (b) the Company Agreements to which the Principal
Stockholder is a party.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE 1
Section 1.1 Voting Agreement. The Principal Stockholder hereby
agrees that during the Restricted Period (as defined below) at any meeting of
the stockholders of the Company, however called, and in any action by consent of
the stockholders of the Company, the Principal Stockholder shall vote its Shares
or shall cause its Shares to be voted: (a) in favor of the Merger, the Merger
Agreement (as amended from time to time) and the transactions contemplated by
the Merger Agreement (the "Proposed Transactions") and (b) against any proposal
(other than in
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respect of the Proposed Transaction) for any: (i) merger, consolidation, share
exchange, business combination, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any other material corporate
transaction, the consummation of which could reasonably be expected to impede,
interfere with, prevent or materially delay the Proposed Transactions; (ii) a
sale, lease, exchange, transfer or other disposition of 20% or more of the
assets of the Company in a single transaction or series of transactions; or
(iii) the acquisition by any person or "group" (as defined in Section 13(d) of
the Exchange Act) other than Parent or its affiliates (herein, a "third party"),
of "beneficial ownership" of 15% or more of the Company's voting stock whether
by tender offer or exchange offer or otherwise and including a self tender
offer, merger, sale of assets or other business combination between the Company
and any person or entity or any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which could result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. For purposes of this Agreement, the term "Restricted Period"
shall mean the time during which the Merger Agreement remains in effect and for
12 months thereafter.
Section 1.2 Acknowledgment. The Principal Stockholder acknowledges
receipt and review of a copy of the Merger Agreement.
Section 1.3 Waiver of Company Agreements. Subject to the terms and
conditions hereof, the Principal Stockholder hereby irrevocably and forever
waives, and agrees to the modifications of its rights under, the provisions of
the Company Agreements identified on Schedule 2 and as limited and qualified by
Schedule 2 and Schedule 4 which are incorporated herein by reference.
Section 1.4 Waiver of Dissenters' Rights. The Principal Stockholder
hereby irrevocably and forever waives any rights the Principal Stockholder may
have, as a result of the Merger, to demand payment for any Shares beneficially
owned by the Principal Stockholder pursuant to Section 1300 et. seq. of
California Law or to otherwise qualify as a "dissenting shareholder" as such
term is used in such sections of California Law.
Section 1.5 Termination of Waivers. Notwithstanding the foregoing,
the waivers and modifications effected in Sections 1.3 and 1.4 shall be of no
further force and effect and shall be treated as if they had never been granted
if: (a) the Merger Agreement is not executed prior to February 15, 2000; (b) the
Merger is not consummated prior to July 31, 2000; (c) the Merger Agreement is
amended in a manner materially adverse to the Principal Stockholder; (d) any
party materially breaches its obligations under the Merger Agreement and such
breach has a material adverse effect on the Principal Stockholder; or (e) the
Merger Agreement is otherwise terminated pursuant to its terms prior to the
consummation of the Merger.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL STOCKHOLDER
The Principal Stockholder hereby represents and warrants to Parent
as follows:
Section 2.1 Authority Relative to This Agreement. The Principal
Stockholder has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby and no other proceedings on the part of the
Principal Stockholder are necessary to authorize this Agreement or to consummate
such transactions. This Agreement has been duly and validly executed and
delivered by the Principal Stockholder and, assuming the due authorization,
execution and delivery by Parent and the Company, constitutes a legal, valid and
binding obligation of the Principal Stockholder, enforceable against the
Principal Stockholder in accordance with its terms.
Section 2.2 No Conflict. (a) The execution and delivery of this
Agreement by the Principal Stockholder do not, and the performance of this
Agreement by the Principal Stockholder will not, (i) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to the Principal
Stockholder or by which the Shares or the Warrants are bound or affected or (ii)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien (as defined below) on any of the Shares or the Warrants
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Principal Stockholder is a party or by which the Principal Stockholder or the
Shares or the Warrants are bound or affected, except for any such conflicts,
violations, breaches, defaults or other occurrences which would not prevent or
delay the performance by the Principal Stockholder of its obligations under this
Agreement.
(b) The execution and delivery of this Agreement by the Principal
Stockholder do not, and the performance of this Agreement by the Principal
Stockholder will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any court or arbitrator or any governmental
body, agency or official except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, and except where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay the performance by the
Principal Stockholder of its obligations under this Agreement.
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Section 2.3 Title to the Shares. As of the date hereof, the
Principal Stockholder is the record and beneficial owner of, or has voting power
or investment power over, the Shares, and is the record and beneficial owner of
the Warrants, listed on Schedule 1. Such Shares and Warrants are all the
securities of the Company owned, either of record or beneficially, by the
Principal Stockholder or in which the Principal Stockholder has voting or
investment power and the Principal Stockholder owns no other rights or interests
exercisable for or convertible into any securities of the Company. Except as
identified on Schedule 3, all of the Shares and Warrants referred to above are
owned free and clear of all security interests, liens, claims, pledges, options,
rights of first refusal, agreement, limitations on the Principal Stockholder's
voting rights, charges and other encumbrances of any nature whatsoever, in each
case as imposed by or through the Principal Stockholder but excluding standard
margin rules applicable to the Shares (collectively, "Liens") except, with
respect to the Warrants, the Warrant Agreements pursuant to which such Warrants
were issued. The Principal Stockholder has not appointed or granted any proxy,
which appointment or grant is still effective, with respect to the Shares.
Section 2.4 Other Company Agreements. To the best knowledge of
Intel's management, the Principal Stockholder is not, as of the date hereof, a
party to any agreement or arrangement with the Company containing provisions
similar to those described on Schedule 2 other than the agreements listed on
Schedule 2.
ARTICLE 3
COVENANTS OF THE PRINCIPAL STOCKHOLDER
Section 3.1 No Inconsistent Agreement. The Principal Stockholder
hereby covenants and agrees that it shall not enter into any agreement or grant
a proxy or power of attorney with respect to the Shares or Warrants which is
inconsistent with this Agreement.
Section 3.2 Transfer Restriction.
(a) The Principal Stockholder hereby covenants and
agrees that it shall not sell, give, assign, hypothecate, pledge, encumber,
grant a security interest in or otherwise dispose of, whether by operation of
law or by agreement or otherwise (each a "Transfer"), from the date hereof until
the termination of the Merger Agreement, any Shares or Warrants, or any right,
title or interest therein or thereto; provided, however, that, notwithstanding
the foregoing, the Principal Stockholder may engage in ordinary course hedging
transactions.
(b) Notwithstanding the foregoing, the Principal
Stockholder may Transfer any Shares or Warrants, or any right, title or interest
therein or thereto, to any of its subsidiaries or controlled affiliates;
provided that, prior to such Transfer, any transferee thereof shall execute and
deliver an agreement
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by which it shall become a party to and be bound by the applicable terms and
provisions of this Agreement, in form and substance reasonably satisfactory to
Parent.
(c) Notwithstanding the foregoing, if Parent permits
Xxxxx Xxxxxxxx, Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxxx, Castle Creek Partners, L.L.C.,
Xxxxxxxx Capital Management, Inc., or Winfield Capital Corp. (each, a
"Transferring Stockholder") to Transfer any Shares, Warrants or options to
purchase Company Common Stock (the "Options") after the date hereof and prior to
the termination of the Merger Agreement, which Transfer would otherwise be
prohibited by an agreement between such Transferring Stockholder and Parent
containing transfer restrictions similar to the restrictions contained herein,
then Parent shall permit the Principal Stockholder, upon its request to Transfer
a number of Shares or Warrants equal to the product of (i) the number of Shares,
Warrants or Options Transferred by the Transferring Stockholder divided by the
number of Shares, Warrants or Options owned by the Transferring Stockholder as
of the date of such Transfer, and (ii) the number of Shares or Warrants owned by
the Principal Stockholder as of the date of such Transfer, in each case,
treating all Options and Warrants as Shares on an as- converted basis (without
giving effect to restrictions or limitations on the exercise of such Options or
Warrants).
Section 3.3 Right of First Offer. The Principal Stockholder hereby
covenants and agrees that following the termination of the Merger Agreement and
during the remainder of the Restricted Period, it shall not Transfer any Shares
or Warrants except pursuant to the following provisions:
(a) Offering Notice. If the Principal Stockholder wishes to
Transfer (other than pursuant to the Merger) all or any portion of its Shares or
Warrants to any person or entity (a "Third Party Purchaser"), the Principal
Stockholder shall first offer such Shares or Warrants to Parent, by sending
written notice (an "Offering Notice") to Parent, which shall state (i) the
number of Shares or Warrants proposed to be transferred (the "Offered
Securities"); (ii) whether such sale (with respect to Shares only) will be
effected in an open market transaction that complies with Rule 144(f) of the
Securities Act of 1933 (a "Public Sale") or otherwise (a "Private Sale") and
(iii) the proposed purchase price for the Offered Securities (the "Offer Price")
which, with respect to a Public Sale, may not be at a per share price in excess
of the closing price of shares of Company Common Stock on the NASDAQ for the
trading day immediately prior to the date on which the Offering Notice is given.
Upon delivery of the Offering Notice, such offer shall be irrevocable unless and
until the rights of first offer provided for herein shall have been waived or
shall have expired;
(b) Parent Option. For a period of three business days after
the giving of the Offering Notice pursuant to Section 3.3(a) (the "Option
Period"), Parent shall have the right (the "Option") but not the obligation to
purchase all (but not less than all) of the Offered Securities at a purchase
price equal to the Offer Price. If the consideration to be paid pursuant to such
Private Sale is not in the form
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of cash, Parent may, at its election, exercise the Option by paying cash in the
amount equal to the fair market value of the consideration to be paid to the
Principal Stockholder. The parties, each acting through one or more senior
officers of the rank of Vice President or higher as its representative, shall
negotiate in good faith and alone (except for one assistant for each party) to
determine such fair market value. If no agreement can be reached by such senior
managers, then such fair market value shall be determined by a neutral
arbitrator under the Commercial Arbitration Rules of the American Arbitration
Association. No sale may be made until a determination as to such fair value is
reached, and such determination shall be made within 30 days of the Offering
Notice. The right of Parent to purchase any or all of the Offered Securities
under this Section 3.3(b) shall be exercisable by delivering written notice of
the exercise thereof (the "Acceptance"), prior to the expiration of the Option
Period, to the Principal Stockholder, which notice shall state the number of
Offered Securities proposed to be purchased by Parent. The failure of Parent to
respond within the Option Period shall be deemed to be a waiver of the Option;
provided that Parent may waive its rights under this Section 3.3(b) prior to the
expiration of the Option Period by giving written notice to the Principal
Stockholder (the date any such written waiver is received by the Principal
Stockholder or, if no written waiver is given, the last date of the Option
Period is referred to as the "Waiver Date");
(c) Closing. The closing of the purchase of Offered Securities
subscribed for by Parent under Section 3.3(b) shall be held at the executive
offices of Parent at 11:00 a.m., local time, on the later of (i) the 10th day
after the Acceptance pursuant to Section 3.3(b) and (ii) two days following the
date on which all governmental or regulatory approvals (including the expiration
of any waiting periods under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act)
with respect to such transaction, if any, have been obtained or at such other
time and place as the parties to the transaction may agree. At such closing, the
Principal Stockholder shall deliver certificates representing the Offered
Securities, duly endorsed for transfer and accompanied by all requisite transfer
taxes, if any, and such Offered Securities shall be free and clear of any Liens
(other than those arising hereunder) and the Principal Stockholder shall so
represent and warrant, and shall further represent and warrant that it is the
sole beneficial and record owner of such Offered Securities. Parent shall
deliver at the closing payment in full in immediately available funds for the
Offered Securities purchased. In connection with such sale the parties to the
transaction shall execute such additional documents and take all reasonable
steps as are otherwise necessary or appropriate to effectuate such transaction;
and
(d) Sale to a Third Party Purchaser. If Parent does not elect
to purchase all of the Offered Securities under Section 3.3(b), the Principal
Stockholder may sell all, but not less than all, of the Offered Securities that
Parent elected not to purchase (i) with respect to a Private Sale to a Third
Party Purchaser on terms and conditions no less favorable to the Principal
Stockholder than those set forth in the Offering Notice; provided, however, that
such sale is bona fide and not undertaken for the purpose of avoiding the
Principal Stockholder's obligations hereunder and made pursuant to a contract
entered into within 10 days after the
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Waiver Date and (ii) with respect to a Public Sale, such sale is effected within
five days following the Waiver Date at the market price in effect at the time of
such sale. If such sale is not consummated within five days after the Waiver
Date with respect to a Public Sale or 45 days after the Waiver Date with respect
to a Private Sale, then the restrictions provided for herein shall again become
effective, and no transfer of such Offered Securities may be made thereafter by
the Principal Stockholder without again offering the same to Parent in
accordance with this Section 3.3.
(e) Notwithstanding the foregoing, the provisions of this
Section 3.3 shall be of no further force and effect if: (a) the Merger Agreement
is not executed prior to February 15, 2000; (b) any party materially breaches
its obligations under the Merger Agreement and such breach has a material
adverse effect on the Principal Stockholder; or (c) the Merger Agreement is
amended in a manner materially adverse to the Principal Stockholder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE COMPANY
Section 4.1 Authority Relative to this Agreement. Each of Parent and
the Company has full right, power and authority to enter into and perform this
Agreement and this Agreement has been duly authorized, executed and delivered by
each of Parent and the Company and is a valid and binding agreement of each of
Parent and the Company and enforceable against each of Parent and the Company in
accordance with its terms.
Section 4.2 No Conflict. (a) The execution and delivery of this
Agreement by each of Parent and the Company do not, and the performance of this
Agreement by each of Parent and the Company will not, (i) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or the Company, as applicable or (ii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a Lien
(as defined below) pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Parent or the Company is a party or by which the Parent or the
Company are bound or affected, except for any such conflicts, violations,
breaches, defaults or other occurrences which would not prevent or delay the
performance by the Parent or the Company of their obligations under this
Agreement.
(b) The execution and delivery of this Agreement by each of Parent
and the Company do not, and the performance of this Agreement by each of Parent
and the Company will not, require any consent, approval, authorization or permit
of,
8
or filing with or notification to, any court or arbitrator or any governmental
body, agency or official except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, and except where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay the performance by Parent
or the Company, as applicable, of its obligations under this Agreement.
Section 4.3 Other Agreements. Concurrently with the execution
hereof, Parent and the Company are entering into separate agreements with Xxxxx
Xxxxxxxx, Xxx Xxxxxxxx and Xxxxxxxx Xxxxxxxxx containing restrictions on voting
and transfer similar to the restrictions contained herein. The restrictions on
voting and transfer contained in such agreements are not materially more
favorable to such other parties than the restrictions on voting and transfer
applicable to the Principal Stockholder hereunder. Concurrently with the
execution hereof, Parent is entering into separate waiver agreements with Castle
Creek Partners, L.L.C., Xxxxxxxx Capital Management, Inc. and Winfield Capital
Corp. waiving certain provisions of agreements between such parties and the
Company similar to the waivers contained in Schedule 2. Such waivers are not
materially more favorable to such other parties than the waivers applicable to
the Principal Stockholder hereunder. Following the date hereof, neither Parent
nor the Company shall enter into an agreement (or amend an existing agreement)
containing waivers similar to the waivers contained in Schedule 2 that are more
favorable to the other party (when taken as a whole) than those applicable to
the Principal Stockholder hereunder, unless Parent and the Company also offer
such more favorable terms to the Principal Stockholder.
ARTICLE 5
MISCELLANEOUS
Section 5.1 Termination. This Agreement shall terminate upon the
earliest to occur of (i) the Closing, (ii) the 12-month anniversary following
termination of the Merger Agreement and (iii) the termination of the Merger
Agreement by Parent pursuant to Section 7.1(c) of such Agreement; provided that
(x) the representations and warranties contained herein shall survive the
termination hereof and (y) subject to Section 1.5, Section 1.3 hereof shall
survive the consummation of the Merger; provided, further, that the agreements
of the Company and Parent set forth in Schedule 2 and 4 hereof, respectively
relating to the extension of the Warrants and cashless exercise shall survive
the termination hereof or the consummation of the Merger as the case may be.
Section 5.2 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
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Section 5.3 Definitions. Unless otherwise defined herein, all
capitalized terms shall have the definitions assigned to such terms in the
Merger Agreement.
Section 5.4 Entire Agreement. This Agreement constitutes the entire
agreement among Parent, the Company and the Principal Stockholder with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
Section 5.5 Amendment. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
Section 5.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in a mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated.
Section 5.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
Section 5.8 Jurisdiction. Each party to this Agreement hereby
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated hereby
shall be brought in the courts of the State of New York and hereby expressly
submits to the personal jurisdiction and venue of such courts for the purposes
thereof and expressly waives any claim of improper venue and any claim that such
courts are an inconvenient forum.
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IN WITNESS WHEREOF, Parent and the Principal Stockholder have caused
this Agreement to be duly executed on the date hereof.
USANi SUB LLC
By: /s/ Xxxx Xxxxxxxxxxxx
-------------------------
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
INTEL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
----------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President and Treasurer
XXXXXXXXXX.XXX INC.
By: /s/ X. Xxxxxxxxx
--------------------
Name: X. Xxxxxxxxx
Title: President and Co-CEO
Schedule 1
Number of Shares
owned beneficially Number of
or of record 1/ Warrants Owned
------------ --------------
455,218 664,990
--------
1/ Other than Shares issuable upon exercise of Warrants, which are listed in
the next column.
Schedule 2
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
Intel Corporation Stock and Warrant ss.7(b) Company covenants to use N/A 2/
("Intel") Purchase and Investor best efforts to limit number
Rights Agreement, of directors to nine and
dated as of April require a majority of
7, 1999, between outside directors.
Intel and the
Company
ss.7(c)(ii)(D) Company covenants to N/A. See Schedule 4.
maintain effectiveness of
registration statement for
certain period of time.
ss.7(c)(ii)(F) Put right if sales of all N/A. See Schedule 4.
Registrable Securities
cannot be made pursuant
to the registration
statement for more than 30
days in any 12-month
period.
ss.7(c)(ii)(H) Penalty for each day on N/A. See Schedule 4.
which sales of Registrable
Securities cannot be made
pursuant to the registration
statement.
-------------------------
2/ "N/A" means the provision shall have no further force or effect and any and all claims arising under such provision
(whether before or after the date of this Voting and First Offer Agreement) are hereby expressly waived, subject in each
case to the provisions of Section 1.3 and Section 1.5 of this Voting and First Offer Agreement.
* Description may not be complete. Entire provision is incorporated herein by reference.
2
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
ss. 7(c)(v) Indemnification Provision waived only with
provisions. respect to claims against the
Company known to Intel's
management (e.g., VPs,
divisional heads, their
seniors and others with
supervisory authority
with respect to this
investment) on or before
the date of the Merger
Agreement for which
indemnification may be
sought.
ss.7(c)(vi) Company agrees not to N/A. See Schedule 4.
grant more favorable
registration rights.
ss.7(e) Right to have observer N/A, except that Intel shall
attend Board and retain such right for so long as
Committee meetings. it owns, beneficially or of
record, Shares and
Warrants equal to
(assuming full exercise
of such Warrants) at
least 2.5% of all Company
Common Stock on a
fully-diluted basis.
ss.7(f) Right to participate on a N/A
pro rata basis in certain
issuances of new
securities.
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
3
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
ss.7(g) Company agrees to N/A, except that (i) the
maintain listing on Company will maintain its
NASDAQ or other listing or authorization for
exchange until 4/7/2002. trading on NASDAQ until
consummation of the
Merger and (ii) Parent
will cause Newco to
maintain its listing or
authorization for trading
on NASDAQ or other
exchange from
consummation of the
Merger until termination
of the Warrants, provided
that, this provision, as
so modified by clause
(ii), shall not prohibit
Newco from consummating a
merger or other "going
private" transaction.
ss.7(j) Prohibition on certain N/A, except that this provision
issuances of discounted or will continue to apply to
variable priced equity or issuances by the Company prior
equity-like securities. to Closing of the Merger other
than issuances
contemplated by the
Merger Agreement or the
Credit Agreement.
ss.7(m) Penalty upon certain N/A
dispositions of the
Company Common Stock
by Xxxxxxxxx.
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
4
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
ss.8 Indemnification Provision waived only with
provisions. respect to claims against the
Company known to Intel's
management (e.g., VPs,
divisional heads, their
seniors and others with
supervisory authority
with respect to this
investment) on or prior
to the date of the Merger
Agreement for which
indemnification may be
sought.
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
5
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
Intel Each of the warrants, Exercise price of the If, at any time following the
dated April 7, 1999, warrants. consummation of the Merger
issued by the and prior to 4/7/2001, Intel
Company to Intel desires in good faith to sell
shares of Newco Common
Stock issuable upon
exercise of the warrants,
and, at such time a
registration statement
permitting the sale of
such shares is not
effective, Intel may
request Newco to effect a
demand registration of
such shares and, if a
registration statement is
not effective within 30
days of such demand, and
Intel exercises its
warrants within five days
following such 30 day
period, and commits to
sell the underlying
shares into the market
pursuant to Rule 144 as
soon as reasonably
practicable following
such exercise, the
exercise price of the
warrants so exercised
shall be reduced by $1.00
per underlying share.
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
6
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
ss.3(c) Company agrees to N/A, except that (i) the
maintain listing on Company will maintain its
NASDAQ or other listing or authorization for
exchange until 4/7/2002. trading on NASDAQ until
consummation of the
Merger and (ii) Parent
will cause Newco to
maintain its listing or
authorization for trading
on NASDAQ or other
exchange from
consummation of the
Merger until termination
of the Warrants; provided
that, this provision, as
so modified by clause
(ii), shall not prohibit
Newco from consummating a
merger or other "going
private" transaction.
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
7
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
ss.4(a) Anti-dilution adjustment Provision waived with respect
to exercise price and to any of the following
number of shares upon transactions to the extent that
below-market issuances. such transaction would
otherwise require an
adjustment under Section
4(a): (i) any issuance
(or deemed issuance) of
securities contemplated
by the Merger Agreement
or the Credit Agreement;
or (ii) any issuance (or
deemed issuance) of
securities by Newco as
consideration in an
acquisition of or from a
third party or in
connection with a merger
with a third party
anytime after the
Effective Time of the
Merger; provided that,
with respect to clause
(ii), the principal
purpose of which is not
to raise capital, and
such third party is not a
controlled affiliate of
Newco or such transaction
(a) has been approved by
a special committee of
the Board of Directors
comprised solely of
independent directors and
such special committee
has recommended that the
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
8
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
stockholders of Newco
vote in favor thereof and
(b) Newco has received
from a nationally
recognized investment
banking firm a written
opinion addressed to such
special committee, for
inclusion in the proxy
statement to be delivered
to the stockholders,
substantially to the
effect that such
transaction is fair to
Newco or to Newco's
stockholders (other than
any stockholder that,
together with its
affiliates, beneficially
owns equity securities
representing more than
50% of the combined
voting power of all
outstanding equity
securities of Newco
ordinarily entitled to
vote in the election of
directors) from a
financial point of view.
ss.4(e)(b)(ii) Right to receive 125% N/A
of Black-Scholes
Amount upon a Major
Transaction (as defined
in each warrant).
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
9
Name of Principal Provision
Stockholder Name of Agreement Waived Description of Provision* Modification of Provision
----------- ----------------- ------ ------------------------- -------------------------
ss.4(l) Adjustment to exercise N/A
price and number of
shares upon certain
dispositions of the
Company Common Stock by
Xxxxxxxxx.
Intel Each of the warrants, ss.2 Period of Exercise The Exercise Period of the
dated April 7, 1999, warrants shall be extended to
issued by the 4/7/2002.
Company to Intel and
terminating on
April 7, 2000 and
July 7, 2000.
Intel The warrant, dated Clause (2) Warrant exercisable for N/A
November 13, 1997, of the additional shares upon
issued by the preamble reaching certain hurdles.
Company to Intel.
Intel ss.1.7 (of Indemnification by Provision waived only with
Exhibit 3) Company with respect to respect to claims against the
the registration rights Company known to Intel on or
granted to Intel. prior to the date of the Merger
Agreement for which
indemnification may be
sought.
-------------------------
* Description may not be complete. Entire provision is incorporated herein by reference.
10
Schedule 3
Liens
-----
None
11
Schedule 4
Registration Rights
-------------------
Immediately upon effectiveness of Newco's S-4 until consummation of
the Merger, the Company will take all reasonable action to reinstate the
effectiveness of the S-3 registration statement pursuant to which the Principal
Stockholder's Warrant Shares are registered until the Closing.
Immediately following consummation of the Merger, Newco will provide
the existing outside warrantholders of the Company, including the Principal
Stockholder and any of its permitted assignees, (collectively, the
"Warrantholders") with a total of six demand registrations and piggyback
registration rights provided that the Principal Stockholder shall be entitled to
at least two such demands. Newco will use its best efforts to keep each such
registration in effect for the earlier of (i) 90 days following the effective
time of such registration statement and (ii) the time when all shares subject to
such registration statement have been sold (the "Effectiveness Period"). No
demand may be made within 90 days following the Effectiveness Period.
Demand registrations are subject to suspensions at any time for
periods not to exceed 90 days (which right Newco may not exercise more than
twice in any 12-month period) if such registration would interfere with any
financing, acquisition or other material transaction involving Newco or any of
its affiliates or would otherwise require disclosure of material non-public
information which Newco reasonably believes would be harmful to disclose at such
time. The terms of the Warrants held by the Warrantholders shall be extended for
(a) the period of time between signing of the Merger Agreement and the
effectiveness of the registration statement on Form S-4 relating to the Merger
and (b) the aggregate periods of time following effectiveness of such
registration statement for which all such suspensions are in effect and (without
duplication) for which an effective registration statement is not effective
following a demand therefor and for such periods of time when the Warrantholder
is not permitted to make a demand for registration.
Newco will not be required to register shares following a demand
unless at least 250,000 shares (as adjusted for stock splits and stock
combinations), including shares to be included pursuant to piggyback
registrations, or, if lower, a number of shares equal to the number of shares
then beneficially owned by the Warrantholders requested such demand (not below
100,000 shares) are included in such registration statement.
Newco will use its best efforts to cause registered shares to be
qualified for sale under all applicable blue sky laws unless such qualification
would require Newco to qualify to do business in any state or if it would
subject Newco to additional taxation.
Registration rights obligations with respect to the Shares will end
upon the earlier of (i) the date on which all of the Shares have been sold and
(ii) the date
12
on which all of the Shares (in the reasonable opinion of counsel to the
Warrantholder) may be immediately sold to the public, whether pursuant to Rule
144 or otherwise. On or following April 7, 2000, the Company will permit
cashless exercise of the Warrants upon request of any Warrantholders if, at such
time, the S-3 registration statement pursuant to which such Warrantholder's
Shares are registered would not permit the sale of such Shares or, if no such
registration statement is then effective. Following consummation of the Merger,
Newco will agree to permit cashless exercise of Warrants upon request of any
Warrantholders.
All expenses incurred in connection with a registration (other than
(i) fees and disbursements of counsel to the selling stockholder and (ii)
underwriting discounts and commissions, if any) shall be borne by Newco.
The registration rights set forth herein are subject to the
condition that the selling stockholder shall provide Newco with such information
with respect to shares of common stock to be registered, the plans for the
proposed distribution thereof and such other information as, in the reasonable
opinion of Newco is necessary to enable Newco to include in such registration
statement all material facts required to be disclosed with respect to such
offering.
