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EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
by and among
TEXAS INSTRUMENTS INCORPORATED
DSL ACQUISITION CORPORATION
and
AMATI COMMUNICATIONS CORPORATION
November 19, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Company Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.4 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.5 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.6 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.7 Directors and Officers of the Surviving Corporation . . . . . . . . . . . . . . . . . . . . 5
Section 1.8 Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.9 Merger Without Meeting of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.3 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.4 Company Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.5 Company Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.3 Authorization; Validity of Agreement; Company Action . . . . . . . . . . . . . . . . . . . 13
Section 3.4 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.5 SEC Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.6 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.7 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.8 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.9 Employee Benefit Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.11 Permits; No Default; Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . 19
Section 3.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.13 Certain Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(i)
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Section 3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.16 Employee and Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.17 Information in Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.18 Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.20 Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
AND THE PURCHASER
Section 4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.2 Authorization; Validity of Agreement; Necessary Action . . . . . . . . . . . . . . . . . . 25
Section 4.3 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.4 SEC Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.5 Information in Offer Documents; Proxy Statement . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.6 Sufficient Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.7 Share Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.8 Purchaser's Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.2 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.3 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.4 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.5 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.7 Approvals and Consents; Cooperation; Notification . . . . . . . . . . . . . . . . . . . . . 31
Section 5.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.10 Shareholder Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.11 Loan and Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger . . . . . . . . . . . . . . . . 33
Section 6.2 Conditions to the Obligations of the Company to Effect the Merger . . . . . . . . . . . . . 33
Section 6.3 Conditions to the Obligations of Parent and the Purchaser to Effect the Merger . . . . . . 33
(ii)
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Section 6.4 Exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
TERMINATION
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.2 Nonsurvival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 8.4 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.6 Entire Agreement; Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.9 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.10 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.11 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.13 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.14 Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ANNEX A
CONDITIONS TO THE OFFER
(iii)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 19, 1997 (this
"Agreement"), by and among TEXAS INSTRUMENTS INCORPORATED, a Delaware
corporation ("Parent"), DSL ACQUISITION CORPORATION, a Delaware corporation and
a wholly-owned subsidiary of Parent (the "Purchaser"), and AMATI COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, the Purchaser and the
Company have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, the acquisition of the Company by Parent
and the Purchaser upon the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer. (a) As promptly as practicable (but in
no event later than five business days from the public announcement of the
execution hereof), the Purchaser shall commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), an offer (the "Offer") to purchase for cash any and all of the issued
and outstanding shares of Common Stock, par value $0.20 per share (referred to
herein as either the "Shares" or "Company Common Stock"), of the Company at a
price of $20.00 per Share, net to the seller in cash (such price, or such
higher price per Share as may be paid in the Offer, being referred to herein as
the "Offer Price"). The Purchaser shall, on the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, accept for payment and
pay for Shares tendered as soon as it is legally permitted to do so under
applicable law; provided that, if the number of Shares that have been
physically tendered and not withdrawn are more than 80% but less than 90% of
the outstanding Shares determined on a fully diluted basis, the Purchaser may
extend the Offer for up to five business days and thereafter on a day-to-day
basis for up to an additional five business days from the date that all
conditions to the Offer shall first have been satisfied or waived. The
obligations of the Purchaser to accept for payment and to pay for any and all
Shares validly tendered on or prior to the expiration of the Offer and not
withdrawn shall be subject only to there being validly tendered and not
withdrawn prior to the expiration of the Offer, that number of Shares which,
together with any Shares beneficially owned by Parent or the Purchaser,
represent at least a
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majority of the Shares outstanding on a fully diluted basis (the "Minimum
Condition") and the other conditions set forth in Annex A hereto. The Offer
shall be made by means of an offer to purchase (the "Offer to Purchase")
containing the terms set forth in this Agreement, the Minimum Condition and the
other conditions set forth in Annex A hereto. The Purchaser shall not amend or
waive the Minimum Condition and shall not decrease the Offer Price or decrease
the number of Shares sought, or amend any other term or condition of the Offer
in any manner adverse to the holders of the Shares or extend the expiration
date of the Offer without the prior written consent of the Company (such
consent to be authorized by the Board of Directors of the Company or a duly
authorized committee thereof). Notwithstanding the foregoing, the Purchaser
shall, and Parent agrees to cause the Purchaser to, extend the Offer from time
to time until February 23, 1998 if, and to the extent that, at the initial
expiration date of the Offer, or any extension thereof, all conditions to the
Offer have not been satisfied or waived. In addition, the Offer Price may be
increased and the Offer may be extended to the extent required by law in
connection with such increase, in each case without the consent of the Company.
(b) As soon as practicable on the date the Offer is
commenced, Parent and the Purchaser shall file with the United States
Securities and Exchange Commission (the "SEC") a Tender Offer Statement on
Schedule 14D-1 with respect to the Offer (together with all amendments and
supplements thereto and including the exhibits thereto, the "Schedule 14D-1").
The Schedule 14D-1 will include, as exhibits, the Offer to Purchase and a form
of letter of transmittal and summary advertisement (collectively, together with
any amendments and supplements thereto, the "Offer Documents"). The Offer
Documents will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by Parent or the
Purchaser with respect to information supplied by the Company in writing for
inclusion in the Offer Documents. Each of Parent and the Purchaser further
agrees to take all steps necessary to cause the Offer Documents to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and
to the extent required by applicable federal securities laws. Each of Parent
and the Purchaser, on the one hand, and the Company, on the other hand, agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false and misleading
in any material respect and the Purchaser further agrees to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its counsel
shall be given a reasonable opportunity to review the initial Schedule 14D-1
before it is filed with the SEC. In addition, Parent and the Purchaser agree
to provide the Company and its counsel in writing with any comments or other
communications that Parent, the Purchaser or their counsel may receive from
time to time from the SEC or its staff
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with respect to the Offer Documents promptly after the receipt of such comments
or other communications.
Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the
Offer and represents that the Board of Directors, at a meeting duly called and
held, has (i) approved this Agreement and the transactions contemplated hereby,
including the Offer and the Merger (as defined in Section 1.4), which approvals
constitute approval of this Agreement, the Offer and the Merger for purposes of
Section 203 of the General Corporation Law of the State of Delaware (the
"DGCL"), and (ii) resolved to recommend that the stockholders of the Company
accept the Offer, tender their Shares thereunder to the Purchaser and approve
and adopt this Agreement and the Merger, which recommendation shall not be
withdrawn, modified or amended except as permitted by Section 5.4(b) hereof.
(b) The Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto and including the exhibits thereto, the
"Schedule 14D-9") which shall, subject to the fiduciary duties of the Company's
directors under applicable law and to the provisions of this Agreement, contain
the recommendation referred to in clause (ii) of Section 1.2(a) hereof. The
Company will use its reasonable best efforts to cause the Schedule 14D-9 to be
filed on the same date that the Schedule 14D-1 is filed; provided, however,
that in any event the Schedule 14D-9 will be filed no later than ten business
days following the commencement of the Offer. The Schedule 14D-9 will comply
in all material respects with the provisions of applicable federal securities
laws and, on the date filed with the SEC and on the date first published, sent
or given to the Company's shareholders, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or the Purchaser in writing for inclusion in the Offer Documents. The
Company further agrees to take all steps necessary to cause the Schedule 14D-9
to be filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws. Each
of the Company, on the one hand, and Parent and the Purchaser, on the other
hand, agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and to be disseminated to holders of the Shares, in each case as and to
the extent required by applicable federal securities laws. Parent and its
counsel shall be given a reasonable opportunity to review the initial Schedule
14D-9 before it is filed with the SEC. In addition, the Company agrees to
provide Parent, the Purchaser and their counsel in writing with any comments or
other communications that the Company or its counsel may receive from time to
time from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments or other communications.
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(c) In connection with the Offer, the Company will
promptly furnish or cause to be furnished to the Purchaser mailing labels,
security position listings and any available listing or computer file
containing the names and addresses of the record holders of the Shares as of a
recent date (which shall in no event be more than ten days prior to the date
hereof), and shall furnish the Purchaser with such additional information
(including updated lists of holders of Shares and their addresses, mailing
labels and lists of security positions) and such other assistance as the
Purchaser or its agents may reasonably request in communicating the Offer to
the record and beneficial shareholders of the Company. Except for such steps
as are necessary to disseminate the Offer Documents, Parent and the Purchaser
shall hold in confidence the information contained in any of such labels and
lists and the additional information referred to in the preceding sentence,
will use such information only in connection with the Offer, and, if this
Agreement is terminated, will upon request of the Company deliver or cause to
be delivered to the Company all copies of such information then in its
possession or the possession of its agents or representatives.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for Shares
by Parent or any of its subsidiaries which represent at least a majority of the
outstanding shares of Company Common Stock (on a fully diluted basis), Parent
shall be entitled to designate such number of directors, rounded up to the next
whole number, on the Board of Directors of the Company as is equal to the
product of the total number of directors on such Board (giving effect to the
directors designated by Parent pursuant to this sentence) multiplied by the
percentage that the aggregate number of Shares beneficially owned by the
Purchaser, Parent and any of their affiliates (including Shares accepted for
payment) bears to the total number of shares of Company Common Stock then
outstanding. The Company shall, upon request of the Purchaser, on the date of
such request, either increase the size of its Board of Directors or secure the
resignations of such number of its incumbent directors as is necessary to
enable Parent's designees to be so elected to the Company's Board, and shall
cause Parent's designees to be so elected as either may be necessary to comply
with the preceding sentence. Notwithstanding the foregoing, until the
Effective Time (as defined in Section 1.5 hereof), the Company shall retain as
members of its Board of Directors at least two directors who are directors of
the Company on the date hereof; provided, that subsequent to the purchase of
and payment for Shares pursuant to the Offer, Parent shall always have its
designees represent at least a majority of the entire Board of Directors. The
Company's obligations under this Section 1.3(a) shall be subject to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company
shall promptly take all actions required pursuant to such Section 14(f) and
Rule 14f-1 in order to fulfill its obligations under this Section 1.3(a),
including mailing to stockholders the information required by such Section
14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be elected
to the Company's Board of Directors. Parent or the Purchaser will supply the
Company any information with respect to either of them and their nominees,
officers, directors and affiliates required by such Section 14(f) and Rule
14f-1.
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(b) From and after the time, if any, that Parent's
designees constitute a majority of the Company's Board of Directors, any
amendment of this Agreement, any termination of this Agreement by the Company,
any extension of time for performance of any of the obligations of Parent or
the Purchaser hereunder, any waiver of any condition or any of the Company's
rights hereunder or other action by the Company in connection with the rights
of the Company hereunder may be effected only by the action of a majority of
the directors of the Company then in office who were directors of the Company
on the date hereof, which action shall be deemed to constitute the action of
the full Board of Directors; provided, that if there shall be no such
directors, such actions may be effected by unanimous vote of the entire Board
of Directors of the Company.
Section 1.4 The Merger. Subject to the terms and conditions of
this Agreement, at the Effective Time (as defined in Section 1.5 hereof), the
Company and the Purchaser shall consummate a merger (the "Merger") pursuant to
which (a) the Purchaser shall be merged with and into the Company and the
separate corporate existence of the Purchaser shall thereupon cease, (b) the
Company shall be the successor or surviving corporation in the Merger (the
"Surviving Corporation") and shall continue to be organized under the laws of
the State of Delaware, and (c) the separate corporate existence of the Company
with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger. Pursuant to the Merger, (x) the Certificate
of Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate of
Incorporation, and (y) the By-laws of the Company, as in effect immediately
prior to the Effective Time, shall be the By-laws of the Surviving Corporation
until thereafter amended as provided by law, the Certificate of Incorporation
and such Bylaws. The Merger shall have the effects set forth in the DGCL.
Section 1.5 Effective Time. On the date of the Closing (as
defined in Section 1.6 hereof) (or on such other date as the parties may
agree), the parties shall file a certificate of merger or other appropriate
document (in any such case, the "Certificate of Merger") executed in accordance
with the relevant provisions of the DGCL, and shall make all other filings,
recordings and publications required by the DGCL with respect to the Merger.
The Merger shall become effective on the date specified in the Certificate of
Merger (the time the Merger becomes effective is hereinafter referred to as the
"Effective Time").
Section 1.6 Closing. The closing of the Merger (the "Closing")
will take place at 11:00 a.m. on a date to be specified by the parties, which
shall be no later than the second business day after satisfaction or waiver of
all of the conditions set forth in Article VI hereof (the "Closing Date"), at
the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxx, Xxxxx 00000, unless another date or place is agreed to in writing by
the parties hereto.
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Section 1.7 Directors and Officers of the Surviving Corporation.
The directors of the Purchaser immediately prior to the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving
Corporation until their successors shall have been duly elected or appointed or
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-laws. The
officers of the Company immediately prior to the Effective Time shall, from and
after the Effective Time, be the officers of the Surviving Corporation until
their successors shall have been duly elected or appointed or qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-laws.
Section 1.8 Stockholders' Meeting.
(a) If the Purchaser owns less than 90% of the Shares
following the purchase of Shares by the Purchaser pursuant to the Offer, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Special Meeting") as
soon as practicable following the acceptance for payment and
purchase of Shares by the Purchaser pursuant to the Offer for
the purpose of considering and taking action upon this
Agreement;
(ii) prepare and file with the SEC a preliminary
proxy or information statement relating to the Merger and this
Agreement, obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter
defined) and, after consultation with Parent, respond promptly
to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a
definitive proxy or information statement (the "Proxy
Statement") to be mailed to its stockholders and use its best
efforts to obtain the necessary adoption of this Agreement by
its stockholders; and
(iii) subject to the fiduciary obligations of the
Board under applicable law as advised by the Company's outside
counsel, include in the Proxy Statement the recommendation of
the Board that stockholders of the Company vote in favor of
the adoption of this Agreement.
(b) Parent agrees that it will provide the Company with
the information concerning Parent and the Purchaser required to be included in
the Proxy Statement and will vote, or cause to be voted, all of the Shares then
owned by Parent, the Purchaser or any of its other subsidiaries and affiliates
in favor of the approval of the Merger and the adoption of this Agreement.
Section 1.9 Merger Without Meeting of Stockholders.
Notwithstanding Section 1.8 hereof, in the event that the Purchaser shall
acquire at least 90% of the outstanding shares of
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each class of capital stock of the Company, pursuant to the Offer or otherwise,
the parties hereto agree to take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after such acquisition,
without a meeting of stockholders of the Company.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any shares of Company Common Stock or common stock of the Purchaser (the
"Purchaser Common Stock"):
(a) Each issued and outstanding share of the Purchaser
Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Any shares of Company Common Stock owned by Parent,
the Purchaser or any other wholly owned Subsidiary (as defined in Section 3.1
hereof) of Parent shall be cancelled and retired and shall cease to exist and
no consideration shall be delivered in exchange therefor.
(c) Each issued and outstanding share of Company Common
Stock (other than Shares to be cancelled in accordance with Section 2.1(b)
hereof and any Dissenting Shares (if applicable and as defined in Section 2.3
hereof)), shall be converted into the right to receive the Offer Price, payable
to the holder thereof, without interest (the "Merger Consideration"), upon
surrender of the certificate formerly representing such share of Company Common
Stock in the manner provided in Section 2.2 hereof. All such shares of Company
Common Stock, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance
with Section 2.2 hereof, without interest, or to perfect any rights of
appraisal as a holder of Dissenting Shares (as hereinafter defined) that such
holder may have pursuant to Section 262 of the DGCL.
Section 2.2 Exchange of Certificates.
(a) Parent shall designate a bank or trust company, or an
affiliate thereof, of nationally recognized standing to act as agent for the
holders of shares of Company Common Stock in connection with the Merger (the
"Paying Agent") to receive the funds to which holders of shares of Company
Common Stock shall become entitled pursuant to Section 2.1(c) hereof. Prior to
the Effective Time, Parent shall take all steps necessary to deposit or cause
to
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be deposited with the Paying Agent such funds for timely payment hereunder.
Such funds shall be invested by the Paying Agent as directed by Parent or the
Surviving Corporation.
(b) As soon as reasonably practicable after the Effective
Time but in no event more than three business days thereafter, the Paying Agent
shall mail to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates"), whose shares were converted pursuant
to Section 2.1 hereto into the right to receive the Merger Consideration (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 Paying Agent and shall be in such form and have such
other provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment of the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange
therefor the Merger Consideration for each share of Company Common Stock
formerly represented by such Certificate and the Certificate so surrendered
shall forthwith be cancelled. If payment of the Merger Consideration is to be
made to a person other than the person in whose name the surrendered
Certificate is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the person requesting such payment shall have
paid any transfer and other taxes required by reason of the payment of the
Merger Consideration to a person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.2, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2.
(c) At the Effective Time, the stock transfer books of
the Company shall be closed and thereafter there shall be no further
registration of transfers of shares of Company Common Stock on the records of
the Company. From and after the Effective Time, the holders of Certificates
evidencing ownership of shares of Company Common Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares, except as otherwise provided for herein or by applicable law. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided
in this Article II.
(d) At any time following one year after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent
to deliver to it any funds (including any interest received with respect
thereto) which had been made available to the Paying Agent and which have not
been disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect
to the Merger Consideration
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payable upon due surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section 2.3 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for such Shares in
accordance with the DGCL ("Dissenting Shares") shall not be converted into a
right to receive the Merger Consideration, unless and until such holder fails
to perfect or withdraws or otherwise loses his or her right to appraisal. A
holder of Dissenting Shares shall be entitled to receive payment of the
appraised value of such Shares held by him or her in accordance with the
provisions of Section 262 of the DGCL, unless, after the Effective Time, such
holder fails to perfect or withdraws or loses his or her right to appraisal, in
which case such Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration, without
interest thereon.
Section 2.4 Company Option Plans.
(a) The options (the "Options") to purchase shares of
Company Common Stock outstanding under the Company's 1981 Stock Option Plan,
1981 Supplemental Stock Option Plan, 1990 Stock Option Plan, Old Amati 1992
Stock Option Plan, 1990 Non-Employee Directors' Stock Option Plan and 1996
Stock Option Plan (the "Option Plans") shall, pursuant to the terms of such
Option Plans, not automatically vest as a consequence of the transactions
contemplated hereby nor shall the Board of Directors of the Company exercise
any discretionary authority to vest such Options in connection with the
transactions contemplated hereby; provided, that notwithstanding the foregoing,
Options (the "Director Options") granted to non-employee directors of the
Company pursuant to any of the Option Plans shall be treated in the manner
contemplated by Section 2.4(d).
(b) The holders of outstanding Options (other than
Director Options) that are vested as of the Effective Time shall be given the
opportunity to make an irrevocable election, on a grant by grant basis to be
effective immediately following the Effective Time, to receive in exchange for
the cancellation of each such vested Option either:
(i) cash in the amount equal to the product of (A) the
number of shares of Company Common Stock subject to
such Option and (B) the excess of (1) the Merger
Consideration over (2) the per share exercise price
of such Option; or
(ii) a substitute option to purchase Parent common stock
(a "Substitute Option") on the following terms:
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(A) the Substitute Option will be exercisable for
a number of shares of Parent common stock
equal to (1) the number of shares of Company
Common Stock subject to the Option multiplied
by (2) the Option Ratio (as defined below),
rounded down to the next whole number of
shares;
(B) the exercise price for the Substitute Option
shall equal the exercise price for the shares
of Company Common Stock otherwise purchasable
pursuant to such Option divided by the Option
Ratio, rounded to the nearest hundredth of a
cent; and
(C) shall otherwise be subject to substantially
the same terms and conditions as applicable
to the Option.
For purposes of this Section 2.4, "Option Ratio"
shall mean the Offer Price divided by the average
closing price per share of Parent common stock on the
New York Stock Exchange for the five consecutive
trading days ending immediately prior to the Closing
Date.
(c) The holders of outstanding Options (other than
Director Options) that are not vested as of the Effective Time shall, at the
Effective Time, receive in substitution and cancellation for each such
nonvested Option a Substitute Option, which Substitute Option shall be subject
to the same vesting schedule as applicable to the Option.
(d) Each of the outstanding Director Options granted
pursuant to (i) the 1990 Non-Employee Directors Stock Option Plan shall, in
accordance with the terms thereof, be vested immediately prior to the Effective
Time and (ii) any other Option Plan shall, in accordance with the discretionary
authority granted to the Board of Directors of the Company under the applicable
Option Plan, be vested immediately prior to the Effective Time by action of the
Board of Directors of the Company. Each outstanding Director Option shall, at
the Effective Time, be converted into the right to receive in cash an amount
equal to the product of (i) the number of shares of Company Common Stock
subject to such Director Option and (ii) the excess of (A) the Merger
Consideration over (B) the per share exercise price of such Director Option.
(e) As soon as practicable after the Effective Time and
in no event more than three (3) business days thereafter, to the extent
necessary to provide for registration of shares of Parent common stock subject
to such Substitute Options, Parent shall file a registration statement on Form
S-8 (or any successor form) with respect to such shares of Parent common stock
and shall use its reasonable best efforts to maintain such registration
statement, including the current status of any related prospectus or
prospectuses, for so long as the Substitute Options remain outstanding.
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Section 2.5 Company Warrants. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders thereof,
each unexpired and unexercised warrant ("Warrant") to purchase shares of
Company Common Stock shall be converted into the right to receive an amount in
cash equal to the product of (a) the number of shares of Company Common Stock
subject to such Warrant and (b) the excess of the (i) Merger Consideration over
(ii) the per share exercise price of such Warrant, upon surrender of the
certificate formerly representing such Warrant; provided, that any Warrant as
to which the per share exercise price is equal to or greater than the Merger
Consideration shall be cancelled and terminated as of the Effective Time
without payment of any consideration therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed to Parent and Purchaser in a letter
delivered to it at or prior to the execution hereof (the "Company Disclosure
Letter"), the Company represents and warrants to Parent and Purchaser as
follows:
Section 3.1 Organization; Subsidiaries. (a) Each of the Company
and its Subsidiaries (as hereinafter defined) is a corporation or other entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where failure to be
in good standing would not have a Company Material Adverse Effect (as
hereinafter defined). Each of the Company and its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the nature of the business conducted by it makes
such qualification necessary, except where the failure to be so duly qualified
and in good standing would not have a Company Material Adverse Effect. As used
in this Agreement, the word "Subsidiary" means, with respect to any party, any
corporation, partnership or other entity or organization, whether incorporated
or unincorporated, of which (i) such party or any other Subsidiary of such
party is a general partner (excluding such partnerships where such party or any
Subsidiary of such party do not have a majority of the voting interest in such
partnership) or (ii) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its Subsidiaries, or by such party and
one or more of its Subsidiaries. As used in this Agreement, "Company Material
Adverse Effect" means any change in or effect on the business of the Company
and its Subsidiaries that is materially adverse to the business, financial
condition, assets or results of operations of the Company and its Subsidiaries
taken as a whole except for any events, changes or effects substantially
resulting from (i) any material and adverse change in the financial markets;
(ii) any political, economic or financial conditions affecting the
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industry or business generally; or (iii) the announcement of the transactions
contemplated by this Agreement. Section 3.1 of the Company Disclosure Letter
sets forth a complete and correct list of all of the Company's Subsidiaries and
their respective jurisdictions of incorporation or organization. Except as set
forth in Section 3.1 of the Company Disclosure Letter, neither the Company nor
any Company Subsidiary holds any interest in a partnership or joint venture of
any kind.
(b) The Company has heretofore delivered to Parent a
complete and correct copy of each of its Certificate of Incorporation and
By-Laws, as currently in effect, and has heretofore made available to Parent a
complete and correct copy of the charter and by-laws of each of its
Subsidiaries, as currently in effect. In all material respects, the minute
books of the Company and the Company Subsidiaries through November 1, 1997
contain accurate records of all meetings and accurately reflect all other
actions taken by the stockholders, the Boards of Directors and all committees
of the Boards of Directors of the Company and the Company Subsidiaries since
July 30, 1995. Complete and accurate copies of all such minute books (except
for the portions relating to deliberations regarding the Merger or the proposed
acquisition of the Company by Westell Technologies, Inc. ("Westell"), which
were redacted, or otherwise redacted on the basis of statutory or common law
privilege), and of the stock register of the Company and each Company
Subsidiary have been made available by the Company to Parent.
Section 3.2 Capitalization. (a) As of the date hereof, the
authorized capital stock of the Company consists of 45,000,000 shares of
Company Common Stock and 5,000 shares of preferred stock, par value $100.00 per
share (the "Company Preferred Stock"). As of October 31, 1997, (i) 19,768,978
shares of Company Common Stock were issued and outstanding, (ii) 4,885,599
shares of Company Common Stock were reserved for issuance upon exercise of
Options granted pursuant to the Option Plans, (iii) 630,476 shares of the
Company Common Stock were reserved for issuance upon exercise of the Warrants,
(iv) no shares of Company Common Stock were issued and held in the treasury of
the Company and (v) there were no shares of Company Preferred Stock issued and
outstanding. All the outstanding shares of the Company's capital stock are
duly authorized, validly issued, fully paid, non-assessable and free of
preemptive rights. Since October 31, 1997, no additional shares of capital
stock or securities convertible into or exchangeable for such capital stock,
have been issued other than any shares of Company Common Stock issued upon
exercise of the Warrants or Options granted under the Option Plans, and no
shares of Company Preferred Stock have been issued. Section 3.2 of the Company
Disclosure Letter identifies (i) the holders of each of the Options, (ii) the
number of Options vested for each holder, (iii) the Option Plan under which
each Option was issued, and (iv) the exercise price of each of the Options.
All shares of Company Common Stock subject to issuance as aforesaid, upon
issuance prior to the Effective Time on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights.
Except as provided in Section 2.4(d), no vesting of the Options or the Warrants
shall accelerate by virtue of the transactions contemplated by this Agreement
and the Board of Directors of the
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Company has not accelerated any of the Options or Warrants. None of the
Options are "incentive stock options" within the meaning of Section 422 of the
Code. Except for shares of Company Common Stock issuable upon exercise of the
Options or the Warrants described in Section 3.2 of the Company Disclosure
Letter or as otherwise set forth in Section 3.2 of the Company Disclosure
Letter, there are no (i) options, warrants, calls, subscriptions or other
rights, convertible securities, agreements or commitments of any character
obligating the Company or any Company Subsidiary to issue, transfer or sell any
shares of capital stock or other equity interest in, the Company or any Company
Subsidiary or securities convertible into or exchangeable for such shares or
equity interests, (ii) outstanding contractual obligations or commitments of
any character of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any capital stock of the Company or any Company Subsidiary,
(iii) outstanding contractual obligations or commitments of any character
restricting the transfer of, or requiring the registration for sale of, any
capital stock of the Company or any Company Subsidiary, (iv) outstanding
contractual obligations or commitments of any character granting any preemptive
or antidilutive right with respect to, any capital stock of the Company or any
Company Subsidiary or (v) voting trusts or similar agreements to which the
Company or any Company Subsidiary is a party with respect to the voting of the
capital stock of the Company or any Company Subsidiary. Except as set forth in
Section 3.3 of the Company Disclosure Letter, there are no outstanding
contractual obligations of the Company or any Company Subsidiary to provide
funds to, or make any investment (in the form of a loan, capital contribution
or otherwise) in, any Company Subsidiary or any other person, other than
guarantees by the Company of any indebtedness of any Company Subsidiary.
(b) Each outstanding share of capital stock of each
Company Subsidiary is duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Except as disclosed in Section
3.2(b) of the Company Disclosure Letter, all of the outstanding shares of
capital stock of each of Company Subsidiary are owned of record and
beneficially, directly or indirectly, by the Company, free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Company Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever, except
where failure to own such shares free and clear would not, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 3.3 Authorization; Validity of Agreement; Company Action.
The Company has full corporate power and authority to execute and deliver this
Agreement and, subject to obtaining the necessary approval of its stockholders,
to consummate the transactions contemplated hereby. The execution, delivery
and performance by the Company of this Agreement, and the consummation by it of
the transactions contemplated hereby, have been duly authorized by its Board of
Directors and, except for those actions contemplated by Section 1.2(a) hereof
and obtaining the approval of its stockholders as contemplated by Section 1.8
hereof, no other corporate action on the part of the Company is necessary to
authorize the execution and delivery by the Company of this Agreement and the
consummation by it of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by
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the Company and, subject to approval and adoption of this Agreement by the
Company's stockholders (and assuming due and valid authorization, execution and
delivery hereof by Parent and the Purchaser) is a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Section 3.4 Consents and Approvals; No Violations. Except as
disclosed in Section 3.4 of the Company Disclosure Letter and except for (a)
filings pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), (b) applicable requirements under the Exchange Act,
(c) the filing of the Certificate of Merger, (d) applicable requirements under
"takeover" or "blue sky" laws of various states, or (e) matters specifically
described in this Agreement, neither the execution, delivery or performance of
this Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (i) violate any provision of the
Certificate of Incorporation or By-Laws of the Company or the charter or
by-laws of any of its Subsidiaries, (ii) result in a violation or breach of, or
result in any loss of benefit or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, acceleration or modification) under, any of the terms, conditions
or provisions of any material note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which the Company or
any of its Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound (the "Material Agreements"), (iii) violate
any order, writ, judgment, injunction or decree applicable to the Company, any
of its Subsidiaries or any of their properties or assets, (iv) violate any law,
statute, rule or regulation applicable to the Company, any of its Subsidiaries
or any of their properties or assets, or (v) require on the part of the Company
or any of its Subsidiaries any filing or registration with, notification to, or
authorization, consent or approval of, any court, legislative, executive or
regulatory authority or agency (a "Governmental Entity"); except in the case of
clauses (ii), (iv) or (v) for such violations, breaches or defaults which, or
filings, registrations, notifications, authorizations, consents or approvals
the failure of which to obtain, would not have a Company Material Adverse
Effect or would not materially adversely affect the ability of the Company to
consummate the transactions contemplated by this Agreement.
Section 3.5 SEC Reports and Financial Statements. The Company
has filed all reports required to be filed by it with the SEC pursuant to the
Exchange Act and the Securities Act of 1933, as amended (the "Securities Act"),
since July 30, 1995 (as such documents have been amended since the date of
their filing, collectively, the "Company SEC Documents"). The Company SEC
Documents (a) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (b) as of their
respective filing dates, or if amended, as of the date of the last such
amendment, did not contain any untrue
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statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Each of the
historical consolidated balance sheets (including the related notes) included
in the Company SEC Documents fairly presents in all material respects the
financial position of the Company and its consolidated Subsidiaries as of the
date thereof, and the other related historical statements (including the
related notes) included in the Company SEC Documents fairly present in all
material respects the results of operations and cash flows of the Company and
its consolidated Subsidiaries for the respective periods or as of the
respective dates set forth therein. Each of the historical consolidated
balance sheets and historical statements of operations and cash flow (including
the related notes) included in the Company SEC Documents has been prepared in
all material respects in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved, except as otherwise noted therein and, in the case of unaudited
interim financial statements, subject to normal year-end adjustments and except
as permitted by Form 10-Q of the SEC. The books and records of the Company and
its Subsidiaries have been, and are being, maintained in accordance with GAAP
and any other applicable legal and accounting requirements.
Section 3.6 No Undisclosed Liabilities. Except (a) for
liabilities and obligations incurred in the ordinary course of business
consistent with past practices since August 2, 1997, (b) for liabilities and
obligations disclosed in the Company SEC Documents filed prior to the date
hereof, (c) for liabilities and obligations incurred in connection with the
Offer and the Merger or otherwise as contemplated by this Agreement and (d) as
disclosed in Section 3.6 of the Company Disclosure Letter, since August 2,
1997, neither the Company nor any of its Subsidiaries has incurred any material
liabilities or obligations that would be required to be reflected or reserved
against in a consolidated balance sheet of the Company and its consolidated
Subsidiaries prepared in accordance with GAAP as applied in preparing the
consolidated balance sheet of the Company and its consolidated Subsidiaries as
of August 2, 1997.
Section 3.7 Absence of Certain Changes. Except as (a) disclosed
in the Company SEC Documents filed prior to the date hereof, (b) disclosed in
Section 3.7 of the Company Disclosure Letter, (c) contemplated by this
Agreement or (d) occurring pursuant to the express terms of that certain
Agreement and Plan of Merger dated as of September 30, 1997, among Westell,
Kappa Acquisition Corp., a Delaware corporation, and the Company, since August
2, 1997, the Company has conducted its business in the ordinary and usual
course and there has not been:
(i) any transaction, commitment, dispute or other event
or condition (financial or otherwise) of any character (whether or not
in the ordinary course of business) which, alone or in the aggregate,
has had or would have a Company Material Adverse Effect;
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(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital
stock of the Company or any repurchase, redemption or other
acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company or such Subsidiary;
(iii) any amendment of any material term of any outstanding
security of the Company or any of its Subsidiaries;
(iv) any acquisition, sale or transfer of any material
assets of the Company or any of its Subsidiaries;
(v) any material contract entered into by the Company or
any of its Subsidiaries or any material amendment or termination of,
or default under, any Material Agreement;
(vi) any making of any loan, advance or capital
contributions to or investment in any Person other than loans,
advances or capital contributions to or investments in wholly-owned
Subsidiaries of the Company made in the ordinary course of business
and payroll, travel and similar advances made in the ordinary course
of business;
(vii) any change in any method of accounting or accounting
practice by the Company or any of its Subsidiaries, except as required
by GAAP; or
(viii) any entering into of any severance, termination pay,
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer
or employee of the Company or any of its Subsidiaries, increase in
benefits payable under any existing severance or termination pay
policies or employment agreements or increase in compensation, bonus
or other benefits payable to directors, officers or employees of the
Company or any of its Subsidiaries, other than in the ordinary course
of business.
Section 3.8 Contracts. Except as disclosed in or attached as
exhibits to the Company SEC Documents or as disclosed in Section 3.8 of the
Company Disclosure Letter, neither the Company nor any of the Company
Subsidiaries is a party to or bound by any contract, arrangement, commitment or
understanding (whether written or oral) (i) as of the date hereof, which
requires expenditures in excess of $1,000,000 or which requires annual
expenditures in excess of $500,000 and is not cancelable within one year by the
Company, that has not been filed or incorporated by reference in the Company
SEC Documents, (ii) which contains any material non-compete provisions with
respect to any line of business or geographic area in which business is
conducted with respect to the Company or any of the Company
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Subsidiaries or which restricts the conduct of any line of business by the
Company or any of the Company Subsidiaries or any geographic area in which the
Company or any of the Company Subsidiaries may conduct business, in each case
in any material respect, (iii) which are terminable by the other party thereto
which if so terminated would result in a Company Material Adverse Effect, or
(iv) which would prohibit or materially delay the consummation of the
transactions contemplated by this Agreement. The Company has previously made
available to Parent true and correct copies of all such agreements and of all
employment and deferred compensation agreements with directors, officers and
employees, and material agreements with consultants, which are in writing and
to which the Company or any of the Company Subsidiaries is a party. Each
Material Agreement is valid and binding on the Company or any of the Company
Subsidiaries, as applicable, and in full force and effect, and the Company and
each of the Company Subsidiaries have in all material respects performed all
obligations required to be performed by them to date under each Material
Agreement, except where such noncompliance, individually or in the aggregate,
would not have a Company Material Adverse Effect. Neither the Company nor any
Company Subsidiary knows of, or has received notice of, any violation or
default under (nor does there exist any condition which with the passage of
time or the giving of notice would cause such a violation of or default under)
any Material Agreement or any other loan or credit agreement, note, bond,
mortgage, indenture or lease, or any other contract, agreement, arrangement or
understanding to which it is a party or by which it or any of its properties or
assets is bound, except for violations or defaults that would not, individually
or in the aggregate, result in a Company Material Adverse Effect. Set forth in
Section 3.8 of the Company Disclosure Letter is a description, including
amounts as of the date hereof, of all indebtedness of the Company and the
Company Subsidiaries other than trade payables and accruals. Section 3.8 of
the Company Disclosure Letter sets forth a list of each contract, agreement or
other instrument or obligation between the Company or any of its affiliates, on
the one hand, and Westell or any of its affiliates, on the other hand. Section
3.8 of the Company Disclosure Letter also sets forth a summary of all DMT
licenses in which the Company is a licensee identifying (i) the parties, (ii)
the royalties and basis thereof receivable by the Company as a licensor, (iii)
the royalties and basis thereof payable by the Company to third parties in
respect of any sales by the licensee, (iv) whether for each license, on a
current basis, the amounts receivable by the Company under (ii) above exceed
the amounts payable by the Company under subsection (iii) above and (v) amounts
which would be owing to licensors with respect to a sale by the Company of
products incorporating licensed products purchased from sublicensees.
Section 3.9 Employee Benefit Plans; ERISA.
(a) Section 3.9(a) of the Company Disclosure Letter lists
(i) all "employee benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and all stock
option, stock award, stock purchase or other equity-based compensation, bonus
or other incentive compensation, severance, tuition assistance, salary
continuation, and vacation plans, policies or agreements, written or unwritten,
under which the Company or any of its Subsidiaries has any obligation or
liability (collectively, "Benefit Plans") and (ii) all employment and
consulting agreements with current
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or former officers, employers, consultants, advisors or directors of the
Company or any of its Subsidiaries (collectively, "Benefit Arrangements").
(b) With respect to each Benefit Plan and Benefit
Arrangement, a complete and correct copy of each of the following documents (if
applicable) has been made available to Purchaser: (i) the most recent plan and
related trust documents, and all amendments thereto; (ii) the most recent
summary plan description, and all related summaries of material modifications;
(iii) the most recent Form 5500 (including schedules); (iv) the most recent IRS
determination letter; and (v) the most recent actuarial reports (including for
purposes of Financial Accounting Standards Board report nos. 87, 106 and 112).
(c) Except as set forth in Section 3.9(c) of the Company
Disclosure Letter, with respect to each Benefit Plan: (i) if intended to
qualify under section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the rules and regulations promulgated thereunder, such plan
has received a determination letter from the Internal Revenue Service stating
that it so qualifies and that its trust is exempt from taxation under section
501(a) of the Code and nothing has occurred to the knowledge of the Company
since the date of such determination that could adversely affect such
qualification or exempt status; (ii) such plan has been administered in
accordance with its terms and applicable law, except for such non-compliance
which would not have, individually or in the aggregate, a Company Material
Adverse Effect; (iii) no disputes are pending, or, to the knowledge of the
Company, threatened that, individually or in the aggregate, would have a
Company Material Adverse Effect; and (iv) all contributions required to be made
to such plan as of the date hereof (taking into account any extensions for the
making of such contributions) have been made in full.
(d) No Benefit Plan is subject to Title IV of ERISA or
section 412 of the Code. None of the Benefit Plans is a plan described in
Section 3(37), 4063 or 4064 of ERISA.
(e) Except as set forth in Section 3.9(e) of the Company
Disclosure Letter, no liability relating to any Benefit Plan has been or is
expected to be incurred by the Company or any Subsidiary of the Company (either
directly or indirectly, including as a result of an indemnification obligation)
under or pursuant to Part 4 of Title I of ERISA or Title IV of ERISA or the
penalty or the excise tax provisions of the Code, which would have a Company
Material Adverse Effect.
(f) Except as set forth in Section 3.9(f) of the Company
Disclosure Letter, no employee or former employee of the Company or any of its
Subsidiaries will become entitled to any bonus, retirement, severance, job
security or similar or enhanced benefit (including acceleration of vesting,
time of payment, or exercise of a stock option or an incentive award) as a
result of the transactions contemplated hereby.
Section 3.10 Litigation. Except as disclosed in Section 3.10 of
the Company Disclosure Letter or as disclosed in the Company SEC Documents
filed prior to the date
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hereof, there is no action, suit, proceeding, audit or investigation pending
or, to the best knowledge of the Company, action, suit, proceeding, audit or
investigation threatened, involving the Company or any of its Subsidiaries, by
or before any court, governmental or regulatory authority or by any third party
that could prevent, enjoin, or materially alter or delay any of the
transactions contemplated by this Agreement or that, if adversely determined,
would have a Company Material Adverse Effect. Except as disclosed in Section
3.10 of the Company Disclosure Letter or as disclosed in the Company SEC
Documents filed prior to the date hereof, neither the Company nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
which has had or, insofar as can be reasonably foreseen, individually or in the
aggregate, would have a Company Material Adverse Effect.
Section 3.11 Permits; No Default; Compliance with Applicable Laws.
Each of the Company and the Company Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals, clearances and orders of any
Governmental Entity necessary for the Company or any Company Subsidiary to own,
lease and operate its properties or to carry on their respective businesses
substantially in the manner described in the Company SEC Documents and as it is
now being conducted (the "Company Permit"), and all such Company Permits are
valid, and in full force and effect, except where the failure to have, or the
suspension or cancellation of, any of the Company Permits would neither,
individually or in the aggregate, (a) have a Company Material Adverse Effect
nor (b) materially adversely affect the ability of the Company to consummate
the transactions contemplated by this Agreement, and no suspension or
cancellation of any of the Company Permits is pending or, to the knowledge of
the Company, threatened, except where the failure to have, or the suspension or
cancellation of, any of the Company Permits would neither, individually or in
the aggregate, (x) have a Company Material Adverse Effect nor (y) materially
adversely affect the ability of the Company to consummate the transactions
contemplated by this Agreement. The business of the Company and each of its
Subsidiaries is not in default or violation of any term, condition or provision
of (i) its respective certificate of incorporation or by-laws, (ii) any
Material Agreement or (iii) any statute, law, rule, regulation, judgment,
decree, order, permit, license or other governmental authorization or approval
(including any Company Permit) applicable to the Company or any of its
Subsidiaries or by which any property, asset or operation of the Company or any
of its Subsidiaries is bound or affected, including, laws, rules and
regulations relating to the environment, occupational health and safety,
employee benefits, wages, workplace safety, equal employment opportunity and
race, religious or sex discrimination, excluding from clauses (ii) and (iii)
defaults or violations which would not have a Company Material Adverse Effect.
Section 3.12 Taxes. Except as disclosed in Section 3.12 of the
Company Disclosure Letter:
(a) All material Tax Returns required to be filed by or
with respect to the Company and each of its Subsidiaries have been filed. The
Company and each of its
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Subsidiaries has paid (or there has been paid on its behalf) all material Taxes
that are due, except for Taxes being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in the
Company's financial statements (as of the date thereof).
(b) There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to the collection or
assessment of material Taxes due from the Company or any of its Subsidiaries
for any taxable period. No audit or other proceeding by any court,
governmental or regulatory authority, or similar person is pending or, to the
knowledge of the Company, threatened in regard to any material Taxes due from
or with respect to the Company or any of the Subsidiaries. Neither the Company
nor any Subsidiary of the Company has received written notice that any
assessment of material Taxes is proposed against the Company or any of its
Subsidiaries.
(c) There is no contract, agreement, plan or arrangement
covering any person that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by the Company or any of its
Subsidiaries by reason of Section 280G of the Code in connection with the
transactions contemplated by this Agreement.
(d) There are no Tax liens upon any property or assets of
the Company or any of the Company Subsidiaries except liens for current Taxes
not yet due and except for liens which have not had and are not reasonably
likely to have a Company Material Adverse Effect.
(e) Neither the Company nor any of its Subsidiaries has
been required to include in income any adjustment pursuant to Section 481 of
the Code by reason of a voluntary change in accounting method initiated by the
Company or any of its Subsidiaries, and the IRS has not initiated or proposed
any such adjustment or change in accounting method, in either case which
adjustment or change has had or is reasonably likely to have a Company Material
Adverse Effect.
(f) Except as set forth in the financial statements
described in Section 3.5, neither the Company nor any of its Subsidiaries has
entered into a transaction which is being accounted for under the installment
method of Section 453 of the Code, which would be reasonably likely to have a
Company Material Adverse Effect. No compensation paid or payable by the
Company is subject to Section 162(m) of the Code.
(g) The term "Taxes" shall mean all taxes, charges, fees,
levies, or other similar assessments or liabilities imposed by the United
States of America, or by any state, local, or foreign government, or any
subdivision, agency, or other similar person of the United States or any such
government, including without limitation (i) income, gross receipts, ad
valorem, premium, excise, real property, personal property, sales, use,
transfer, withholding, employment, payroll, and franchise taxes; and (ii) any
interest, penalties or additions to taxes resulting from, attributable to, or
incurred in connection with any Tax or any contest, dispute,
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or refund thereof. The term "Tax Returns" shall mean any report, return, or
statement required to be supplied to a taxing authority in connection with
Taxes.
Section 3.13 Certain Property. The Company and its Subsidiaries,
as the case may be, have good and marketable title in fee simple to all of
their respective real property and good title to all of their respective
leasehold interests and other properties, as reflected in the most recent
balance sheet included in the Company SEC Documents, except for properties and
assets that have been disposed of in the ordinary course of business since the
date of such balance sheet, free and clear of all mortgages, liens, pledges,
charges or encumbrances of any nature whatsoever, except (i) the lien for
current taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject thereto or
affected thereby, or otherwise materially impair the Company's business
operations (in the manner presently carried on by the Company) or (iii) as
disclosed in the Company SEC Documents, and except for such matters, which
individually or in the aggregate, could not reasonably be expected to have a
Company Material Adverse Effect. All leases under which the Company leases any
real or personal property are in good standing, valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing default or event which with notice or lapse of time or
both would become a default which could reasonably be expected to have a
Company Material Adverse Effect. Section 3.13 of the Company Disclosure Letter
sets forth all liens and security interests granted by the Company or any of
the Company Subsidiaries to third parties.
Section 3.14 Intellectual Property.
(a) The Company has previously given to Parent detailed
information (including, where applicable, federal registration numbers and
dates of registrations or applications for registration) concerning the
following: (i) all of the Company's and the Company Subsidiaries' trademarks,
trademark rights, service marks, trade names, and other trade rights,
indicating which are registered and which are not, including all pending
applications for any registrations thereof, and all patents, patent rights and
copyrights used or proposed to be used by the Company in its business and all
pending applications therefore; (ii) all computer software presently used by
the Company which has been purchased or licensed from outside parties with a
purchase price or license fee in excess of $5,000; and (iii) all other trade
secrets, mailing lists, know-how, designs, plans, specifications and other
intellectual property rights of the Company (whether or not registered or
registrable) (collectively, "Intellectual Property"). Section 3.14 of the
Company Disclosure Letter identifies (i) each patent or registration which has
been issued (and which has not expired or lapsed) to the Company or any of the
Company
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Subsidiaries with respect to any Intellectual Property, (ii) each pending
patent application or application for registration which the Company or any of
the Company Subsidiaries has made with respect to any Intellectual Property,
and (iii) any Intellectual Property that any third party owns and that the
Company or any of the Company Subsidiaries use or propose to use in its
business (including any marketing rights granted to the Company or any of the
Company Subsidiaries under patents owned or licensed by third parties). Except
as set forth in Section 3.14 of the Company Disclosure Letter, (i) the Company
or one of the Company Subsidiaries solely owns or is in sole and exclusive
possession of adequate licenses or other legal rights to use all Intellectual
Property now used or held for use in connection with the business as currently
conducted or as contemplated to be conducted and (ii) neither the Company nor
any of the Company Subsidiaries has disclosed any of the Intellectual Property
other than in a manner reasonably necessary for the operation of their
business. None of the Company or any of the Company Subsidiaries have granted
any licenses of or other rights to use any of the Intellectual Property to any
third party. The Intellectual Property comprises all of the intellectual
property rights that are in the aggregate necessary in any material respect for
the operation of its business as it is presently conducted.
(b) To the Company's knowledge, there is no unauthorized
use, disclosure, infringement or misappropriation of any Intellectual Property
rights of the Company or any of its Subsidiaries, or any Intellectual Property
right of any third party to the extent licensed by or through the Company or
any of its Subsidiaries, by any third party, including any employee or former
employee of the Company or any of its Subsidiaries. Neither the Company nor
any of its Subsidiaries has entered into any agreement to indemnify any other
person against any charge of infringement of any Intellectual Property.
(c) The Company is not, nor will it be as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in breach of any license, sublicense or other agreement
relating to the Intellectual Property.
(d) All patents, registered trademarks, service marks and
copyrights held by the Company are valid and subsisting. The Company (i) has
not been sued in any suit, action or proceeding which involves a claim of
infringement of any patents, trademarks, service marks, copyrights or violation
of any trade secret or other proprietary right of any third party; (ii) has no
knowledge that the manufacturing, marketing, licensing or sale of its products
infringes any patent, trademark, service xxxx, copyright, trade secret or other
proprietary right of any third party; and (iii) has not brought any action,
suit or proceeding for infringement of Intellectual Property or breach of any
license or agreement involving Intellectual Property against any third party.
(e) The Company has secured valid written assignments
from all consultants and employees who contributed to the creation or
development of Intellectual Property of the rights to such contributions that
the Company does not already own by operation of law.
(f) The Company has taken all necessary and appropriate
steps to protect and preserve the confidentiality of all Intellectual Property
not otherwise protected by patents, patent applications or copyright
("Confidential Information"). All use, disclosure or appropriation of
Confidential Information owned by the Company by or to a third party has
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been pursuant to the terms of a written agreement between the Company and such
third party. All use, disclosure or appropriation of Confidential Information
not owned by the Company has been pursuant to the terms of a written agreement
between the Company and the owner of such Confidential Information, or is
otherwise lawful.
Section 3.15 Environmental Matters. Except as disclosed in
Section 3.15 of the Company Disclosure Letter or as disclosed in the Company
SEC Documents:
(a) no notice, request for information, order, complaint
or penalty has been received relating to, and there are no judicial,
administrative or other actions, suits or proceedings pending or, to the
knowledge of the Company, threatened which allege a violation of, any law,
regulation, rule or governmental restriction relating to the environment or to
pollutants, contaminants or wastes, in each case relating to the current or
prior business of the Company or any of its Subsidiaries which, individually or
in the aggregate, would have a Company Material Adverse Effect; and
(b) there has been no environmental assessment,
investigation or audit conducted of which the Company has knowledge in relation
to the current or prior business of the Company or any of its Subsidiaries or
any property or facility now or previously owned, leased or operated by the
Company or any of its Subsidiaries which has not been made available to the
Parent.
Section 3.16 Employee and Labor Matters. Except as set forth in
Section 3.16 of the Company Disclosure Letter and except to the extent that the
failure of any of the following representations to be accurate would not have a
Company Material Adverse Effect: (i) since January 1, 1996 there has been no
labor strike or work stoppage against, or lockout by, the Company or any of its
Subsidiaries, (ii) there is no unfair labor practice charge or complaint
against the Company or any of its Subsidiaries pending before, or, to the
knowledge of the Company or any of its Subsidiaries, threatened by, the
National Labor Relations Board, and (iii) there is no pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened union grievance
against the Company or any of its Subsidiaries.
Section 3.17 Information in Offer Documents. None of the
information supplied or to be supplied by the Company or any of its or agents
for inclusion or incorporation by reference in the Offer Documents or the
Schedule 14D-9, including any amendments or supplements thereto, will at the
respective times the Offer Documents and the Schedule 14D-9 are filed with the
SEC or first published, sent or given to the Company's shareholders, contain
any statement which, at such time and in light of the circumstances under which
it is made, is false or misleading with respect to any material fact, or omit
to state any material fact necessary in order to make the statements therein
not false or misleading. Notwithstanding the foregoing, the Company does not
make any representation or warranty with respect to the information that has
been or will be supplied by Parent or the Purchaser or their officers,
directors, employees, representatives Subsidiaries, or any of their officers,
directors, employees, representatives
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or agents for inclusion or incorporation by reference in any of the foregoing
documents. The Schedule 14D-9 and any amendments or supplements thereto will
comply in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations thereunder.
Section 3.18 Brokers or Finders. The Company represents, as to
itself, its Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except Deutsche
Xxxxxx Xxxxxxxx ("DMG"), the fees and expenses of which will be paid by the
Company in accordance with the Company's agreement with such firm, a true and
complete copy of which has heretofore been furnished to Parent. The Company
has no obligations or commitments to any investment banker or financial advisor
in connection with any future transactions that may be considered or entered
into by the Company after the Effective Time.
Section 3.19 Insurance. The Company maintains insurance coverage
with reputable insurers in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in businesses
similar to that of the Company (taking into account the cost and availability
of such insurance).
Section 3.20 Opinion of Financial Advisor. The Company has
received the opinion of DMG to the effect that, as of the date hereof, the
consideration to be received by the stockholders of the Company in the Offer
and the Merger is fair from a financial point of view.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
AND THE PURCHASER
Parent and the Purchaser jointly and severally represent and warrant
to the Company as follows:
Section 4.1 Organization. Each of Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on
its business as now being conducted. Parent and each of its Subsidiaries is
duly qualified to do business and in good standing in each jurisdiction in
which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so duly qualified and in good standing would not have a material
adverse effect on the consummation of the transactions contemplated hereby.
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Section 4.2 Authorization; Validity of Agreement; Necessary
Action. Each of Parent and the Purchaser has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Parent and the Purchaser of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by their Boards of
Directors and no other corporate action on the part of Parent and the Purchaser
is necessary to authorize the execution and delivery by Parent and the
Purchaser of this Agreement and the consummation by them of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Parent and the Purchaser, as the case may be and (assuming due and valid
authorization, execution and delivery hereof by the Company) is a valid and
binding obligation of each of Parent and the Purchaser, as the case may be,
enforceable against them in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 4.3 Consents and Approvals; No Violations. Except for
(a) filings pursuant to the HSR Act, (b) applicable requirements under the
Exchange Act, (c) the filing of the Certificate of Merger, (d) applicable
requirements under "takeover" or "blue sky" laws of various states, or (e) as
described in this Agreement, neither the execution, delivery or performance of
this Agreement by Parent and the Purchaser nor the consummation by Parent and
the Purchaser of the transactions contemplated hereby will (i) violate any
provision of the charter or by-laws or other comparable constituent documents
of Parent or the Purchaser, (ii) result in a violation or breach of, or result
in any loss of benefit or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination,
cancellation, acceleration or modification) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Parent or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound, (iii) violate any order, writ, judgment, injunction or
decree applicable to Parent, any of its Subsidiaries or any of their properties
or assets, (iv) violate any law, statute, rule or regulation applicable to
Parent, any of its Subsidiaries or any of their properties or assets, or (v)
require on the part of Parent or the Purchaser any filing or registration with,
notification to, or authorization, consent or approval of, any Governmental
Entity, except in the case of clauses (ii), (iv) or (v) for such violations,
breaches or defaults which, or filings, registrations, notifications,
authorizations, consents or approvals the failure of which to obtain, would not
materially adversely affect the ability of Parent and the Purchaser to
consummate the transactions contemplated by this Agreement.
Section 4.4 SEC Reports and Financial Statements. Parent has
filed all reports required to be filed by it with the SEC pursuant to the
Exchange Act and the Securities Act since July 30, 1995 (as such documents have
been amended since the date of their filing, collectively, the "Parent SEC
Documents"). The Parent SEC Documents (a) were prepared in
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accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and (b) as of their respective filing dates, or if amended, as
of the date of the last such amendment, did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the
historical consolidated balance sheets (including the related notes) included
in the Parent SEC Documents fairly presents in all material respects the
financial position of the Parent and its consolidated Subsidiaries as of the
date thereof, and the other related historical statements (including the
related notes) included in the Parent SEC Documents fairly present in all
material respects the results of operations and cash flows of Parent and its
consolidated Subsidiaries for the respective periods or as of the respective
dates set forth therein. Each of the historical consolidated balance sheets
and historical statements of operations and cash flow (including the related
notes) included in the Parent SEC Documents has been prepared in all material
respects in accordance with GAAP applied on a consistent basis during the
periods involved, except as otherwise noted therein and, in the case of
unaudited interim financial statements, subject to normal year-end adjustments
and except as permitted by Form 10-Q of the SEC. The books and records of
Parent and its Subsidiaries have been, and are being, maintained in accordance
with GAAP and any other applicable legal and accounting requirements.
Section 4.5 Information in Offer Documents; Proxy Statement.
None of the information supplied or to be supplied by Parent or the Purchaser,
or any of their officers, directors, employees, representatives or agents for
inclusion or incorporation by reference in the Offer Documents, the Schedule
14D-9 or the Proxy Statement, including any amendments or supplements thereto,
will, in the case of the Offer Documents and the Schedule 14D-9, at the
respective times the Offer Documents and the Schedule 14D-9 are filed with the
SEC or first published, sent or given to the Company's stockholders, or, in the
case of the Proxy Statement, at the date the Proxy Statement is first mailed to
the Company's stockholders or at the time of the Special Meeting, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein not
false or misleading. Notwithstanding the foregoing, Parent and the Purchaser
do not make any representation or warranty with respect to the information that
has been supplied by the Company or any of its Subsidiaries or their officers,
directors, employees, representatives or agents for inclusion or incorporation
by reference in any of the foregoing documents. The Offer Documents and the
Proxy Statement and any amendments or supplements thereto will comply in all
material respects with the applicable provisions of the Exchange Act and the
rules and regulations thereunder.
Section 4.6 Sufficient Funds. Either Parent or the Purchaser has
sufficient funds available to purchase all of the Shares outstanding on a fully
diluted basis and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
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Section 4.7 Share Ownership. None of Parent, the Purchaser or
any of their respective affiliates beneficially owns any Shares.
Section 4.8 Purchaser's Operations. The Purchaser was formed
solely for the purpose of engaging in the transactions contemplated hereby and
has not engaged in any business activities or conducted any operations other
than in connection with the transactions contemplated hereby.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that, except (i) as contemplated by this Agreement, (ii)
as disclosed in Section 5.1 of the Company Disclosure Letter or (iii) as agreed
in writing by Parent, after the date hereof, and prior to the time the
directors of the Purchaser have been elected to, and shall constitute a
majority of, the Board of Directors of the Company pursuant to Section 1.3:
(a) the business of the Company and its Subsidiaries
shall be conducted only in the ordinary course of business and, to the extent
consistent therewith, each of the Company and its Subsidiaries shall use its
reasonable best efforts to preserve in all material respects its business
organization intact and maintain its existing relations with customers,
suppliers, employees and business associates;
(b) each of the Company and its Subsidiaries will not,
directly or indirectly, (i) amend its Certificate of Incorporation or By-laws
or similar organizational documents or (ii) split, combine or reclassify its
outstanding capital stock;
(c) neither the Company nor any of its Subsidiaries
shall: (i) declare, set aside or pay any dividend or other distribution
(whether payable in cash, stock or property) with respect to its capital stock
(other than dividends from any Subsidiary of the Company to the Company or any
other Subsidiary of the Company); (ii) issue or sell any additional shares of,
or securities convertible into or exchangeable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of capital
stock of any class of the Company or its Subsidiaries, other than issuances
pursuant to the exercise of Options outstanding on the date hereof; (iii) sell,
lease, license or dispose of any assets or properties, other than in the
ordinary course of business; (iv) incur or modify any material debt, other than
in the ordinary course of business consistent with past practice; (v) license
or sublicense any asset or property of the Company or any Company Subsidiary
except in the ordinary course of business consistent with past practice on a
basis that results in a positive current royalty net of any royalties due by
the Company or any Company Subsidiary on account of sales by the licensee or
sublicensee; or
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(vi) redeem, purchase or otherwise acquire, directly or indirectly, any of its
or its Subsidiaries' capital stock;
(d) neither the Company nor any of its Subsidiaries
shall, except as may be required or contemplated by this Agreement or by
applicable law, (i) enter into, adopt, materially amend or terminate any
employee benefit plans, (ii) amend any employment or severance agreement, (iii)
increase in any manner the compensation or other benefits of its officers or
directors or (iv) increase in any manner the compensation of any other
employees (except, in the case of this clause (iv), for normal increases in the
ordinary course of business);
(e) neither the Company nor any of its Subsidiaries
shall: (i) assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the material obligations of
any other person (other than Subsidiaries of the Company), except pursuant to
contractual indemnification agreements entered into in the ordinary course of
business; (ii) make any loans, advances or capital contributions to, or
investments in, any other person (other than to Subsidiaries of the Company and
payroll, travel and similar advances made in the ordinary course of business);
or (iii) make capital expenditures other than pursuant to the Company's current
capital expenditure budget, a copy of which has been provided to Parent;
(f) neither the Company nor any of its Subsidiaries shall
change any of the accounting methods used by it unless required by GAAP or
applicable law;
(g) the Company will not settle or compromise any claim
(including arbitration) or litigation involving payments by the Company in
excess of $250,000 individually which are not subject to insurance
reimbursement without the prior written consent of Parent, which consent will
not be unreasonably withheld;
(h) the Company will not amend, modify or terminate in
any material respect any Material Agreement or enter into any new agreement
material to the business of the Company without the prior written consent of
Parent, which consent shall not be unreasonably withheld; and
(i) neither the Company nor any of its Subsidiaries will
authorize or enter into an agreement to do any of the foregoing.
Section 5.2 Access to Information. Upon reasonable notice, the
Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Parent, access, during normal business hours during the
period prior to the Closing Date, to all its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its Subsidiaries to) furnish promptly to Parent (a) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the
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requirements of federal securities laws or regulatory boards or agencies and
(b) all other information concerning its business, properties and personnel as
Parent may reasonably request. Unless otherwise required by law and until the
Closing Date, Parent will hold any such information which is nonpublic in
confidence in accordance with the provisions of the Confidentiality Agreement
between the Company and Parent, dated as of July 22, 1997 (the "Confidentiality
Agreement").
Section 5.3 Employee Benefits.
(a) Parent and the Purchaser agree that the Surviving
Corporation and its Subsidiaries and successors shall provide those persons
who, immediately prior to the Effective Time, were employees of the Company or
its Subsidiaries ("Retained Employees") with employee plans and programs that
provide benefits that are no less favorable in the aggregate to those provided
to such Retained Employees immediately prior to the date hereof. With respect
to such employee plans and programs provided by the Surviving Corporation and
its Subsidiaries and successors, service accrued by such Retained Employees
during employment with the Company and its Subsidiaries prior to the Effective
Time shall be recognized for all purposes, except to the extent necessary to
prevent duplication of benefits.
(b) Parent and the Purchaser agree to honor, and cause
the Surviving Corporation to honor, without modification, all employment and
severance agreements and arrangements, as amended through the date hereof, with
respect to employees and former employees of the Company that are listed in
Section 3.8 of the Company Disclosure Letter (collectively, the "Severance
Agreements").
(c) After the date hereof and prior to the Effective
Time, Parent and the Company shall reasonably cooperate to develop and adopt an
employee retention plan for key employees of the Company, which shall be
subject to Parent approval.
Section 5.4 No Solicitation. (a) The Company and its
Subsidiaries will not, and will use their best efforts to cause their
respective officers, directors, employees and investment bankers, attorneys or
other agents retained by or acting on behalf of the Company or any of its
Subsidiaries not to, (i) initiate, solicit or encourage, directly or
indirectly, any inquiries or the making of any proposal that constitutes or is
reasonably likely to lead to any Acquisition Proposal (as defined in Section
5.4(c) hereof), (ii) engage in negotiations or discussions (other than to
advise as to the existence of the restrictions set forth in this Section 5.4)
with, or furnish any information or data to, any third party relating to an
Acquisition Proposal, or (iii) enter into any agreement with respect to any
Acquisition Proposal or approve any Acquisition Proposal. Notwithstanding
anything to the contrary contained in this Section 5.4 or in any other
provision of this Agreement, the Company and its Board of Directors (i) may
participate in discussions or negotiations (including, as a part thereof,
making any counterproposal) with or furnish information to any third party
making an unsolicited Acquisition Proposal (a "Potential Acquiror") or approve
an unsolicited Acquisition Proposal if the Company's Board
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of Directors is advised by its financial advisor that such Potential Acquiror
has the financial wherewithal to be reasonably capable of consummating such an
Acquisition Proposal, and the Board determines in good faith (A) after
receiving advice from its financial advisor, that such third party has
submitted to the Company an Acquisition Proposal which is a Superior Proposal
(as defined in Section 5.4(d) hereof), and (B) based upon advice of outside
legal counsel, that the failure to participate in such discussions or
negotiations or to furnish such information or approve an Acquisition Proposal
would violate the Board's fiduciary duties under applicable law. The Company
agrees that any non-public information furnished to a Potential Acquiror will
be pursuant to a confidentiality agreement containing confidentiality and
standstill provisions substantially similar to the confidentiality and
standstill provisions of the Confidentiality Agreement. In the event that the
Company shall determine to provide any information as described above, or shall
receive any Acquisition Proposal, it shall promptly inform Parent in writing as
to the fact that information is to be provided and shall furnish to Parent the
identity of the recipient of such information and/or the Potential Acquiror and
the terms of such Acquisition Proposal, except to the extent that the Board
determines in good faith, based upon advice of its outside legal counsel, that
any such action described in this sentence would violate such Board's fiduciary
duties under, or otherwise violate, applicable law. The Company will inform
Parent of any material amendment to the essential terms of any such Acquisition
Proposal except to the extent that the Board determines in good faith, based
upon advice of outside legal counsel, that any such action would violate such
Board's fiduciary duties under, or otherwise violate, applicable law.
(b) The Board of Directors of the Company shall not (i)
withdraw or modify or propose to withdraw or modify, in any manner adverse to
Parent, the approval or recommendation of such Board of Directors of this
Agreement, the Offer or the Merger or (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal unless, in each case, the Board
determines in good faith (A) after receiving advice from its financial advisor,
that such Acquisition Proposal is a Superior Proposal and (B) based upon advice
of outside legal counsel, that the failure to take such action would violate
the Board's fiduciary duties under applicable law.
(c) For purposes of this Agreement, "Acquisition
Proposal" shall mean any bona fide proposal, whether in writing or otherwise,
made by a third party to acquire beneficial ownership (as defined under Rule
13d-3 of the Exchange Act) of all or a material portion of the assets of, or
any material equity interest in, the Company or its material Subsidiaries
pursuant to a merger, consolidation or other business combination, sale of
shares of capital stock, sale of assets, tender offer or exchange offer or
similar transaction involving the Company or its material Subsidiaries
including any single or multi-step transaction or series of related
transactions which is structured to permit such third party to acquire
beneficial ownership of any material portion of the assets of, or any material
portion of the equity interest in, the Company or its material Subsidiaries
(other than the transactions contemplated by this Agreement).
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35
(d) The term "Superior Proposal" means any bona fide
proposal to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than a majority of the Shares then outstanding or
all or substantially all the assets of the Company, and otherwise on terms
which the Board of Directors of the Company determines in good faith to be more
favorable to the Company and its stockholders than the Offer and the Merger
(based on advice of the Company's financial advisor that the value of the
consideration provided for in such proposal is superior to the value of the
consideration provided for in the Offer and the Merger), for which financing,
to the extent required, is then committed or which, in the good faith
reasonable judgment of the Board of Directors, after receiving advice from its
financial advisor, is reasonably capable of being financed by such third party.
Section 5.5 Publicity. The initial press releases with respect
to the execution of this Agreement shall be acceptable to Parent and the
Company and shall be in the form of Annex B hereto. Thereafter, so long as
this Agreement is in effect, neither the Company, Parent nor any of their
respective affiliates shall issue or cause the publication of any press release
with respect to the Merger, this Agreement or the other transactions
contemplated hereby without prior consultation with the other party, except as
may be required by law or by any listing agreement with a national securities
exchange or national securities quotation system.
Section 5.6 Indemnification. The Company shall, and from and
after the consummation of the Offer, Parent and the Surviving Corporation shall
jointly and severally, indemnify, defend and hold harmless the present and
former directors and officers of the Company and its Subsidiaries (the
"Indemnified Parties") from and against all losses, expenses, claims, damages
or liabilities arising out of the transactions contemplated by this Agreement
to the fullest extent permitted or required under applicable law. All rights
to indemnification existing in favor of the directors and officers of the
Company as provided in the Company's Certificate of Incorporation or By-laws,
as in effect as of the date hereof, with respect to matters occurring through
the Effective Time, shall survive the Merger and shall not be amended, repealed
or otherwise modified for a period of six years after the consummation of the
Offer in any manner that would adversely affect the rights of the individuals
who at or prior to the consummation of the Offer were directors or officers of
the Company with respect to occurrences at or prior to the consummation of the
Offer and Parent shall cause the Surviving Corporation to honor all such rights
to indemnification.
Section 5.7 Approvals and Consents; Cooperation; Notification.
(a) The parties hereto shall use their respective reasonable best efforts, and
cooperate with each other, to (i) determine as promptly as practicable all
governmental and third party authorizations, approvals, consents or waivers,
including, pursuant to the HSR Act, advisable (in Parent's and Purchaser's
discretion) or required in order to consummate the transactions contemplated by
this Agreement, including, the Offer and the Merger and (ii) obtain such
authorizations, approvals, consents or waivers as promptly as practicable.
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(b) The Company, Parent and the Purchaser shall take all
actions necessary to file as soon as practicable all notifications, filings and
other documents required to obtain all governmental authorizations, approvals,
consents or waivers, including, under the HSR Act, and to respond as promptly
as practicable to any inquiries received from the Federal Trade Commission, the
Antitrust Division of the Department of Justice and any other Governmental
Entity for additional information or documentation and to respond as promptly
as practicable to all inquiries and requests received from any Governmental
Entity in connection therewith.
(c) The Company shall give prompt notice to Parent of (i)
the occurrence of any event, condition or development material to the Company
and its Subsidiaries, taken as a whole, and (ii) any notice from any Person
claiming its consent is required in connection with the transactions
contemplated by this Agreement. Each of the Company and Parent shall give
prompt notice to the other of the occurrence or failure to occur of an event
that would, or, with the lapse of time would cause any condition to the
consummation of the Offer or the Merger not to be satisfied.
Section 5.8 Further Assurances. Each of the parties hereto
agrees to use its respective reasonable best efforts to take, or cause to be
taken, all 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 contemplated by this Agreement, including, the Offer
and the Merger.
Section 5.9 Taxes. With respect to any Taxes, the Company shall
not (i) make any material tax election or (ii) settle or compromise any
material income tax liability (whether with respect to amount or timing), in
each case without the prior written consent of Parent which consent shall not
be unreasonably withheld.
Section 5.10 Shareholder Litigation. The Company and Parent agree
that in connection with any litigation which may be brought against the Company
or its directors relating to the transactions contemplated hereby, the Company
will keep Parent, and any counsel which Parent may retain at its own expense,
informed of the course of such litigation, to the extent Parent is not
otherwise a party thereto, and the Company agrees that it will consult with
Parent prior to entering into any settlement or compromise of any such
shareholder litigation; provided, that, no such settlement or compromise will
be entered into without Parent's prior written consent, which consent shall not
be unreasonably withheld.
Section 5.11 Loan and Security Agreement. Concurrently with the
execution and delivery of this Agreement, the Company and Parent shall execute
and deliver the Loan and Security Agreement in the form of Annex C attached
hereto.
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ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) this Agreement shall have been adopted by the
requisite vote of the holders of Company Common Stock, if required by
applicable law and the Certificate of Incorporation (provided that Parent shall
comply with its obligations in respect of the voting of Shares set forth in
Section 1.8(b));
(b) any waiting period applicable to the Merger under the
HSR Act shall have expired or been terminated;
(c) no statute, rule, regulation, order, decree or
injunction shall have been enacted, promulgated or issued by any Governmental
Entity or court which prohibits the consummation of the Merger; and
(d) Parent, the Purchaser or their affiliates shall have
purchased shares of Company Common Stock pursuant to the Offer.
Section 6.2 Conditions to the Obligations of the Company to
Effect the Merger. The obligation of the Company to effect the Merger shall be
further subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) the representations and warranties of Parent and the
Purchaser shall be true and accurate in all material respects as of the
Effective Time as if made at and as of such time (except for those
representations and warranties that address matters only as of a particular
date or only with respect to a specific period of time which need only be true
and accurate as of such date or with respect to such period); and
(b) each of Parent and the Purchaser shall have performed
in all material respects all of the respective obligations hereunder required
to be performed by Parent or the Purchaser, as the case may be, at or prior to
the Effective Time.
Section 6.3 Conditions to the Obligations of Parent and the
Purchaser to Effect the Merger. The obligations of Parent and the Purchaser to
effect the Merger shall be further subject to the satisfaction at or prior to
the Effective Time of the following conditions:
(a) the representations and warranties of the Company
shall be true and accurate in all material respects as of the Effective Time as
if made at and as of such time
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(except for those representations and warranties that address matters only as
of a particular date or only with respect to a specific period of time which
need only be true and accurate as of such date or with respect to such period);
and
(b) the Company shall have performed in all material
respects all of the respective obligations hereunder required to be performed
by the Company, at or prior to the Effective Time.
Section 6.4 Exception. The conditions set forth in Section 6.2
and 6.3 hereof shall cease to be conditions to the obligations of the parties
if the Purchaser shall have accepted for payment and paid for Shares validly
tendered pursuant to the Offer.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and
the Merger contemplated herein may be abandoned at any time prior to the
Effective Time, whether before or after stockholder approval thereof:
(a) By the mutual consent of Parent, the Purchaser and
the Company.
(b) By either of the Company, on the one hand, or Parent
and the Purchaser, on the other hand:
(i) if shares of Company Common Stock shall not
have been purchased pursuant to the Offer on or prior to
February 23, 1998, which date may be extended by Parent, in
its sole discretion, for up to an additional 30 days; provided
further, however, that the right to terminate this Agreement
under this Section 7.1(b)(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 Parent or the Purchaser, as the case may be, to purchase
shares of Company Common Stock pursuant to the Offer on or
prior to such date; or
(ii) if any Governmental Entity shall have issued
an order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties hereto shall
use their respective reasonable best efforts to lift), in each
case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement or
prohibiting Parent to acquire or hold or exercise rights of
ownership of the Shares, and such order, decree, ruling or
other action shall have become final and non-appealable.
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(c) By the Company:
(i) if, prior to the purchase of shares of
Company Common Stock pursuant to the Offer, either (A) a third
party shall have made an Acquisition Proposal that the Board
of Directors of the Company determines in good faith, after
consultation with its financial advisor, is a Superior
Proposal and the Company shall have concurrently executed a
definitive agreement with such third party in respect of such
Superior Proposal, or (B) the Board of Directors of the
Company shall have withdrawn, or modified or changed in any
manner adverse to Parent or the Purchaser its approval or
recommendation of the Offer, this Agreement or the Merger (or
the Board of Directors of the Company resolves to do any of
the foregoing); or
(ii) if Parent or the Purchaser shall have
terminated the Offer, or the Offer shall have expired, without
Parent or the Purchaser, as the case may be, purchasing any
shares of Company Common Stock pursuant thereto; provided that
the Company may not terminate this Agreement pursuant to this
Section 7.1(c)(ii) if the Company is in willful breach of this
Agreement; or
(iii) if, due to an occurrence that if occurring
after the commencement of the Offer would result in a failure
to satisfy any of the conditions set forth in Annex A hereto,
Parent or the Purchaser shall have failed to commence the
Offer on or prior to five business days following the date of
the initial public announcement of the Offer; provided, that
the Company may not terminate this Agreement pursuant to this
Section 7.1(c)(iii) if the Company is in willful breach of
this Agreement.
(d) By Parent and the Purchaser:
(i) if, prior to the purchase of shares of
Company Common Stock pursuant to the Offer, the Board of
Directors of the Company shall have withdrawn, modified or
changed in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, this Agreement or the
Merger or shall have recommended an Acquisition Proposal or
shall have executed an agreement in principle or definitive
agreement relating to an Acquisition Proposal or similar
business combination with a person or entity other than
Parent, the Purchaser or their affiliates (or the Board of
Directors of the Company resolves to do any of the foregoing);
or
(ii) if, due to an occurrence that if occurring
after the commencement of the Offer would result in a failure
to satisfy any of the conditions set forth in Annex A hereto,
Parent or the Purchaser shall have failed to commence the
Offer on or prior to five business days following the date of
the initial public
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announcement of the Offer; provided that Parent may not
terminate this Agreement pursuant to this Section 7.1(d)(ii)
if Parent or the Purchaser is in willful breach of this
Agreement.
Section 7.2 Effect of Termination.
(a) In the event of the termination of this Agreement as
provided in Section 7.1, written notice thereof shall forthwith be given to the
other party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and void,
and there shall be no liability on the part of Parent, the Purchaser or the
Company or their respective directors, officers, employees, shareholders,
representatives, agents or advisors other than, with respect to Parent, the
Purchaser and the Company, the obligations pursuant to this Section 7.2,
Sections 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.10, 8.11, 8.12, 8.13 and the
last sentence of Section 5.2. Nothing contained in this Section 7.2 shall
relieve Parent, the Purchaser or the Company from liability for willful breach
of this Agreement.
(b) In the event that this Agreement is terminated by the
Company pursuant to Section 7.1(c)(i) hereof or by Parent and the Purchaser
pursuant to Section 7.1(d)(i) hereof, the Company shall pay to Parent by
certified check or wire transfer to an account designated by Parent immediately
following receipt of a request therefor, an amount equal to $8 million (the
"Termination Fee").
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto, by action
taken by their respective Boards of Directors (which in the case of the Company
shall include approvals as contemplated in Section 1.3(b)), at any time prior
to the Closing Date with respect to any of the terms contained herein;
provided, however, that after the approval of this Agreement by the
stockholders of the Company, no such amendment, modification or supplement
shall reduce or change the Merger Consideration or adversely affect the rights
of the Company's stockholders hereunder without the approval of such
stockholders.
Section 8.2 Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time. This Section
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8.2 shall not limit any covenant or agreement contained in this Agreement which
by its terms contemplates performance after the Effective Time.
Section 8.3 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed) or sent by an overnight courier
service, such as Federal Express, with delivery by such service confirmed, to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or the Purchaser, to:
Texas Instruments Incorporated
0000 Xxxxxxxxx Xxx
P.O. Box 650311, M/S 3995
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
with copies to:
Texas Instruments Incorporated
X.X. Xxx 000000, X/X 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Aqnich, Esq.
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: R. Xxxxx Xxxxx, Esq.
(b) if to the Company, to:
Amati Communications Corporation
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
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Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxxx
with a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Peers, Esq.
Any notice which is not sent to the party's counsel in the manner and at the
address or telecopy number set forth above within 24 hours following the time
such notice is given to such party shall be deemed not to be validly delivered
to such party.
Section 8.4 Interpretation. The words "hereof", "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include", "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation". The words describing
the singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders and words denoting natural persons shall
include corporations and partnerships and vice versa. The phrase "to the best
knowledge of" or any similar phrase shall mean such facts and other information
which as of the date of determination are actually known to any vice president,
chief financial officer, general counsel, chief compliance officer, controller,
and any officer superior to any of the foregoing, of the referenced party after
the conduct of a reasonable investigation under the circumstances by such
officer. The phrases "the date of this Agreement", "the date hereof" and terms
of similar import, unless the context otherwise requires, shall be deemed to
refer to November 19, 1997. As used in this Agreement, the term "affiliate(s)"
shall have the meaning set forth in Rule 12b-2 of the Exchange Act. The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provisions of this Agreement.
Section 8.5 Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
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Section 8.6 Entire Agreement; Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement (including the documents and the
instruments referred to herein and therein) (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof, and (b)
except as provided in Sections 5.3 and 5.6, are not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.
Section 8.7 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 8.8 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof or of any other
jurisdiction.
Section 8.9 Specific Performance. Each of the parties hereto
acknowledges and agrees that in the event of any breach of this Agreement, each
non-breaching party would be irreparably and immediately harmed and could not
be made whole by monetary damages. It is accordingly agreed that the parties
hereto (a) will waive, in any action for specific performance, the defense of
adequacy of a remedy at law and (b) shall be entitled, in addition to any other
remedy to which they may be entitled at law or in equity, to compel specific
performance of this Agreement in any action instituted in a court of competent
jurisdiction.
Section 8.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective permitted successors and assigns.
Section 8.11 Expenses. Except as set forth in Section 7.2 hereof,
all costs and expenses incurred in connection with the Offer, the Merger, this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Offer
or the Merger is consummated.
Section 8.12 Headings. Headings of the Articles and Sections of
this Agreement are for convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
Section 8.13 Waivers. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument
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signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent
or other failure.
Section 8.14 Disclosure Letter. The Company Disclosure Letter
shall be construed with and as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein. Any matter disclosed
pursuant to the Company Disclosure Letter shall be deemed to be disclosed for
all purposes under this Agreement but such disclosure shall not be deemed to be
an admission or representation as to the materiality of the item so disclosed.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
TEXAS INSTRUMENTS INCORPORATED
By: /s/ XXXXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President, Semiconductor Group
DSL ACQUISITION CORPORATION
By: /s/ XXXXXX XXXXXX
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: President
AMATI COMMUNICATIONS CORPORATION
By: /s/ XXXXX XXXXXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: President and Chief Executive
Officer
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, subject to the
provisions of the Merger Agreement, the Purchaser shall not be required to
accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may terminate the Offer and not accept for
payment any tendered Shares if (i) any applicable waiting period under the HSR
Act has not expired or been terminated prior to the expiration of the Offer,
(ii) the Minimum Condition has not been satisfied, or (iii) at any time on or
after November 19, 1997, and before the time of acceptance of Shares for
payment pursuant to the Offer, any of the following events shall occur:
(a) there shall have been any statute, rule, regulation,
judgment, order or injunction promulgated, entered, enforced, enacted or issued
applicable to the Offer or the Merger by any federal or state governmental
regulatory or administrative agency or authority or court or legislative body
or commission which (1) prohibits the consummation of the Offer or the Merger,
(2) prohibits, or imposes any material limitations on, Parent's or the
Purchaser's ownership or operation of all or a material portion of the
Company's businesses or assets or the Shares, except for such prohibitions or
limitations which would not have a Company Material Adverse Effect, (3)
prohibits, or makes illegal the acceptance for payment, payment for or purchase
of Shares or the consummation of the Offer, or (4) renders the Purchaser unable
to accept for payment, pay for or purchase a material portion or all of the
Shares; provided, that the parties shall have used their reasonable best
efforts to cause any such statute, rule, regulation, judgment, order or
injunction to be vacated or lifted;
(b) the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and accurate as of the date of
consummation of the Offer as though made on or as of such date (except for
those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time which need
only be true and accurate as of such date or with respect to such period),
except where the failure of such representations and warranties to be true and
accurate (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein), do not, individually or in the
aggregate, have a Company Material Adverse Effect;
(c) the Company shall have breached or failed to perform
or comply with, in all material respects, any material obligation, agreement or
covenant required by the Merger Agreement to be performed or complied with by
it as of the date of consummation of the Offer
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47
(d) the Merger Agreement shall have been terminated in
accordance with its terms;
(e) the Board of Directors of the Company shall have
withdrawn, modified or changed in a manner adverse to Parent or the Purchaser
its approval or recommendation of the Offer, the Merger Agreement or the Merger
or shall have recommended an Acquisition Proposal or shall have executed an
agreement in principle or definitive agreement relating to an Acquisition
Proposal or similar business combination with a person or entity other than
Parent, the Purchaser or their affiliates or the Board of Directors of the
Company shall have adopted a resolution to do any of the foregoing;
(f) Thirty percent (30%) or more of the key personnel of
the Company and its Subsidiaries identified on Schedule A(h) of the Company
Disclosure Letter shall no longer be employed by the Company or its
Subsidiaries or shall have submitted their resignations.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and, subject to the Merger Agreement, may be asserted by either of them
or may be waived by Parent or the Purchaser, in whole or in part at any time
and from time to time in the sole discretion of Parent or the Purchaser. The
failure by Parent or the Purchaser at any time to exercise any such rights
shall not be deemed a waiver of any right and each right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
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