EXHIBIT 7(c)(2)
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF APRIL 14, 1997
BY AND AMONG
P-COM, INC.,
P-COM MERGER SUBSIDIARY, INC.,
CONTROL RESOURCES CORPORATION
AND
CERTAIN SECURITYHOLDERS OF CONTROL RESOURCES CORPORATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, is dated as
of April 14, 1997, by and among P-Com, Inc., a Delaware
corporation ("P-Com"), P-Com Merger Subsidiary, Inc., a Delaware
corporation and a wholly-owned subsidiary of P-Com ("Sub"),
Control Resources Corporation, a Delaware corporation ("CRC") and
the securityholders of CRC listed on the signature pages hereto
(collectively, the "Key Securityholders").
INTENDING TO BE LEGALLY BOUND, and in consideration of the
premises and mutual covenants and agreements contained herein, P-
Com, Sub, CRC and the Key Securityholders hereby agree as
follows:
ARTICLE I
THE MERGER
I.1 Merger; Effective Time of the Merger. Subject to the
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terms and conditions of this Agreement and Plan of Reorganization
(this "Agreement") and as contemplated by the Agreement of Merger
attached hereto as Exhibit 1.1 (the "Agreement of Merger"), Sub
will be merged with and into CRC (the "Merger") in accordance
with the applicable provisions of the Delaware General
Corporation Law (the "DCL"). The Agreement of Merger provides,
among other things, the mode of effecting the Merger and the
manner and basis of converting each issued and outstanding share
of capital stock of CRC into shares of common stock of P-Com ("P-
Com Common Stock"). The Agreement of Merger shall be executed by
CRC, P-Com and Sub prior to the Effective Date of the Merger (as
defined in this Section 1.1).
Subject to the provisions of this Agreement, the Agreement
of Merger shall be filed in accordance with the DCL on the
Closing Date (as defined in Section 1.2) and with the applicable
laws of the State of New Jersey. The Merger shall become
effective upon such filing of the Agreement of Merger (the date
of such filing being hereinafter referred to as the "Effective
Date of the Merger" and the time of confirmation of such filing
being hereinafter referred to as the "Effective Time of the
Merger") in the State of Delaware.
I.2 Closing. The closing of the Merger (the "Closing")
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will take place as soon as practicable on the first business day
after satisfaction of the conditions set forth in this Agreement
(the "Closing Date"), at the offices of Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, Two Embarcadero Place, 2200 Geng Road, Palo Alto,
California, unless a different date or place is agreed to in
writing by the parties hereto.
I.3 Effects of the Merger. At the Effective Time of the
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Merger, (a) the separate existence of Sub shall cease and Sub
shall be merged with and into CRC (Sub and CRC are sometimes
referred to herein as the "Constituent Corporations" and CRC
after the Merger is sometimes referred to herein as the
"Surviving Corporation"); (b) the Certificate of Incorporation of
CRC shall be the Certificate of Incorporation of the Surviving
Corporation, except that such Certificate of Incorporation shall
be amended to provide, among other things, that the authorized
capital stock of the Surviving Corporation shall be 1,000 shares
of Common Stock; (c) the Bylaws of CRC shall be the Bylaws of the
Surviving Corporation; (d) the directors of the Surviving
Corporation shall be Xxxxx X'Xxxx, Xxxxxx Xxxxx, Xxxxxx Xxxxxxx,
Xxxxxxx Sophie and Pier Antoniucci; (e) the officers of the
Surviving Corporation shall be Xxxxx X'Xxxx, Xxxxxx Xxxxx, Xxxxxx
Xxxxxxx, Xxxxxxx Sophie and Pier Antoniucci; and (f) the Merger
shall, from and after the Effective Time of the Merger, have all
the effects provided by applicable law.
I.4 Tax-Free Reorganization; Pooling of Interests. The
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Merger is intended to be a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and to be accounted for as a pooling of interests.
I.5 Escrow. Ten percent (10%) of the aggregate number of
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shares of P-Com Common Stock issued or issuable in connection
with the Merger (the "Escrow Shares") shall be held in escrow as
collateral for all obligations of the securityholders of CRC (the
"Securityholders") pursuant to this Agreement and the provisions
of an escrow agreement ("Escrow Agreement") in the form attached
hereto as Exhibit 1.5. The Escrow Shares shall be withheld pro
rata from the shares of P-Com Common Stock to be received by the
Securityholders of CRC upon exchange of their securities.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES; SUPPLEMENTARY ACTION
II.1 Effect on Capital Stock.
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(a) Capital Stock of Sub. As of the Effective Time of
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the Merger, by virtue of the Merger and without any action on the
part of the holder of any shares of capital stock of CRC, all
issued and outstanding shares of capital stock of Sub shall be
converted into 1,000 shares of Common Stock of the Surviving
Corporation. Each stock certificate of Sub evidencing ownership
of any such shares shall continue to evidence ownership of such
shares of capital stock of the Surviving Corporation.
(b) Cancellation of Capital Stock of CRC.
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(i) As of the Effective Time of the Merger,
by virtue of the Merger and without any action on the part of the
holder of any shares of capital stock of CRC, all shares of
capital stock of CRC that are owned directly or indirectly by CRC
or by any entity controlled by CRC shall be canceled and no stock
of P-Com or other consideration shall be delivered in exchange
therefor. For this purpose, an entity controlled by CRC shall
mean a corporation or other entity whose voting securities are
owned or are otherwise controlled directly or indirectly by CRC
or other intermediary entity in an amount sufficient to elect at
least a majority of the Board of Directors or other managers of
such corporation or other entity. CRC shall close its stock
transfer books and not record transfers of CRC common stock after
the close of business on the third trading day prior to the
Effective Date of the Merger.
(ii) As of the Effective Time of the Merger,
by virtue of the Merger and without any action on the part of the
holder of any shares of capital stock of CRC and subject to
Section 2.1(b)(iii) below, each issued and outstanding share of
CRC common stock, including shares issuable upon the exercise of
any CRC Option (as defined in Section 2.1(d) below) prior to the
Effective Time, that are issued and outstanding immediately prior
to the Effective Time of the Merger shall automatically be
canceled and extinguished and converted into the right to receive
a fraction of a share of P-Com Common Stock (the "Merger
Consideration Per Share") equal to (A) the aggregate merger
consideration consisting of that number of shares of P-Com Common
Stock determined in accordance with the provisions of Section
2.1(b)(iii) (as finally determined, the "Aggregate Merger
Consideration"), divided by (B) the sum of (i) the aggregate
number of shares of CRC common stock issued and outstanding as of
the Effective Time of the Merger, and (ii) the aggregate number
of shares of CRC common stock issuable upon exercise of all
outstanding options as of the Effective Time of the Merger (on an
as-converted to common stock basis). The ratio pursuant to which
each share of common stock of CRC will be exchanged for shares of
P-Com Common Stock, determined in accordance with the foregoing
provisions, is hereinafter referred to as the "Exchange Ratio."
Each holder of a certificate representing any shares of CRC
capital stock after the Effective Time of the Merger shall cease
to have any rights with respect to such shares, except the right
either to receive the Merger Consideration Per Share upon
surrender of such certificate, or to exercise such holder's
dissenters' rights as provided in Section 2.1(h) hereof and the
DCL.
(iii) The number of shares of P-Com
Common Stock constituting the Aggregate Merger Consideration
shall be equal to the number obtained by dividing (A) the amount
of Twenty-Two Million Dollars ($22,000,000) by (B) the average
closing sales price of the P-Com Common Stock as quoted on the
National Association of Securities Dealers Automated Quotation
System National Market ("Nasdaq National Market") for the thirty
(30) consecutive trading days ending three (3) trading days prior
to the Effective Time of the Merger.
(c) [Intentionally Left Blank]
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(d) Assumption of CRC Options.
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(i) As of the Effective Time of the Merger,
by virtue of the Merger and without any action on the part of the
holder of any shares of capital stock of CRC, each unexpired and
unexercised option to purchase shares of CRC common stock (an
"CRC Option") granted under the stock option plans and agreements
of CRC outstanding immediately prior to the Effective Time of the
Merger shall be assumed by P-Com (an "Assumed CRC Option").
Schedule 2.1(d) hereto sets forth a true and complete list as of
the date hereof of all holders of CRC Options, including the
number of shares of CRC common stock subject to such options, a
breakdown as between vested and unvested options, the exercise
price per share and the term of such options. On the Closing
Date, CRC shall deliver to P-Com an updated Schedule 2.1(d)
hereto current as of the Closing Date. Each CRC Option so
assumed by P-Com will continue to have, and be subject to,
substantially the same terms and conditions set forth in the
documents governing such CRC Option immediately prior to the
Effective Time, except that (A) such Assumed CRC Option will be
exercisable for that number of whole shares of P-Com Common Stock
equal to the product of the number of shares of CRC common stock
(on an as-converted to Common Stock basis) that were purchasable
under such Assumed CRC Option immediately prior to the Effective
Time of the Merger multiplied by the Exchange Ratio, rounded down
to the nearest whole number of shares of P-Com Common Stock, and
(B) the per share exercise price for the shares of P-Com Common
Stock issuable upon exercise of such Assumed CRC Option will be
equal to the quotient obtained by dividing the exercise price per
share of CRC common stock (on an as-converted to Common Stock
basis) at which such CRC Option was exercisable immediately prior
to the Effective Time by the Exchange Ratio, rounded up to the
nearest whole cent. Consistent with the terms of the CRC Options
and the documents governing such CRC Options and provided P-Com
assumes such CRC options in accordance with this Agreement, CRC
and the Key Securityholders represent and warrant that the Merger
will not terminate or accelerate any Assumed CRC Option or any
right of exercise, vesting or repurchase relating thereto with
respect to shares of P-Com Common Stock acquired upon exercise of
such CRC Option. Holders of CRC Options will not be entitled to
acquire CRC capital stock following the Merger.
(ii) Holders of vested CRC Options may elect
to exercise such options prior to the Effective Time of the
Merger and receive the Merger Consideration Per Share by
providing notice of such exercise and payment of the exercise
price thereof to CRC at any time prior to the Effective Time. In
the event that any holder of vested CRC Options does not exercise
such CRC Options prior to the Effective Time, such CRC Options
shall become Assumed CRC Options.
(iii) As soon as practicable after the
Effective Time of the Merger, P-Com shall issue to each holder of
an Assumed CRC Option a document evidencing the stock option
assumption by P-Com in substantially the form set forth in
Exhibit 2.1(d)(iii) attached hereto. The right to receive an
Assumed CRC Option may not be assigned or transferred, except to
the extent the predecessor CRC Option was assignable or
transferable. Any attempted assignment contrary to this
Section 2.1(d) shall be null and void.
(e) Exemption from Registration; Registration Rights.
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The P-Com Common Stock to be issued in connection with the Merger
will be issued in a transaction exempt from registration under
the Securities Act of 1933, as amended (the "Securities Act"),
and under applicable state securities laws. The shares of P-Com
Common Stock and Assumed Options issued in the Merger, pursuant
to this Agreement and the Merger Agreement, shall have certain
registration rights as provided in the Registration Rights
Agreement attached hereto as Exhibit 2.1(e).
(f) CRC Capital Stock Subject to Repurchase. All
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shares of P-Com Common Stock which are received in the Merger in
exchange for shares of CRC common stock which, under applicable
stock purchase, stock restriction or similar agreements with CRC,
are unvested or subject to a repurchase option or other condition
of forfeiture which by its terms does not terminate due to the
Merger ("CRC Restricted Stock") will also be unvested or subject
to the same repurchase option or other condition, as the case may
be, and the certificates evidencing such shares will be marked
with appropriate legends. CRC and the Key Securityholders
represent and warrant that Schedule 2.1(f) hereto sets forth a
true and complete list of all holders of CRC Restricted Stock,
including the number of shares of CRC Restricted Stock held and a
breakdown as between vested and unvested shares. On the Closing
Date, CRC shall deliver to P-Com an updated Schedule 2.1(f)
hereto current as of the Closing Date.
(g) Adjustment of Exchange Ratio. If, between the
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date of this Agreement and the Effective Time of the Merger, the
outstanding shares of P-Com Common Stock shall have been changed
into a different number of shares or a different class by reason
of any reclassification, recapitalization, split-up, stock
dividend, stock combination, exchange of shares or readjustment,
the Exchange Ratio shall be correspondingly adjusted.
(h) Dissenters' Appraisal Rights. If, as of the
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Effective Time of the Merger, holders of capital stock of CRC
have duly and properly exercised and not lost dissenters' rights
("Dissenting Shares") in connection with the Merger under Section
262 of the DCL, such shares of common stock of CRC shall not be
converted into P-Com Common Stock but shall be converted into the
right to receive the "fair value" of their shares (exclusive of
any element of value arising from the accomplishment or
expectation of the Merger) as determined by the Delaware Court of
Chancery. CRC shall give P-Com prompt notice of any appraisal
demand received by CRC. P-Com shall have the right to participate
in all negotiations and proceedings with respect to such demand.
Each holder of Dissenting Shares (a "Dissenting Stockholder")
who, pursuant to the provisions of the DCL, becomes entitled to
payment of the value of shares of common stock of CRC shall
receive payment therefor (but only after the value therefor shall
have been agreed upon or finally determined pursuant to such
provisions). In the event of a legal obligation, after the
Effective Time of the Merger, to deliver shares of P-Com Common
Stock to any holder of shares of common stock of CRC who shall
have failed to make an effective purchase demand or shall have
lost his status as a Dissenting Stockholder, P-Com shall issue
and deliver, upon surrender by such Dissenting Stockholder of his
certificate or certificates representing shares of common stock
of CRC, the shares of P-Com Common Stock to which such Dissenting
Stockholder is then entitled under this Section 2.1. CRC agrees
that, except with the prior written consent of P-Com, it will not
make any payment with respect to, or settle or offer to settle,
any such purchase demand.
(i) Fractional Shares. No fractional shares of P-
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Com Common Stock shall be issued, but in lieu thereof each holder
of shares of CRC common stock who would otherwise be entitled to
receive a fraction of a share of P-Com Common Stock shall receive
from P-Com an amount of cash equal to (A) the average closing
sales prices of P-Com Common Stock as quoted on the Nasdaq
National Market for thirty (30) consecutive trading days ending
three (3) trading days prior to the Effective Time of the Merger
multiplied by (B) the fraction of a share of P-Com Common Stock
to which such holder would otherwise be entitled. The fractional
share interests of each CRC Securityholder shall be aggregated,
so that no CRC Securityholder shall receive cash in an amount
greater than the value of one (1) full share of P-Com Common
Stock.
II.2 Exchange of Certificates.
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(a) Exchange Agent. Prior to the Closing Date, P-Com
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shall appoint U.S. Stock Transfer Corporation to act as exchange
agent (the "Exchange Agent") in the Merger.
(b) P-Com to Provide Common Stock. Upon the Closing,
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P-Com shall make available for exchange in accordance with this
Article II, through such reasonable procedures as P-Com may
adopt, the shares of P-Com Common Stock issuable pursuant to
Section 2.1 and any cash paid for fractional shares in exchange
for outstanding shares of capital stock of CRC, less any amounts
held in escrow, for all Securityholders set forth on Schedule
2.2(b) delivered by CRC to P-Com before the close of business on
the second trading day prior to the Effective Date, which
Schedule will contain the name and address of each Securityholder
of record at the close of business on the third trading day prior
to the Effective Date, the number of shares of CRC capital stock
owned of record by such Securityholder and the number of shares
of P-Com Common Stock issuable to such Securityholder based upon
the Merger Consideration Per Share set forth in Section 2.1(b)
hereof.
(c) Exchange Procedures.
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(i) Within five (5) business days after the
Effective Time of the Merger, the Exchange Agent shall mail to
each holder of record of a certificate or certificates which
immediately prior to the Effective Time of the Merger represented
outstanding shares of common stock of CRC (the "Certificates")
whose shares are being converted into P-Com Common Stock pursuant
to Section 2.1 hereof (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and
have such other provisions as P-Com may reasonably specify) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for P-Com Common Stock and cash for
fractional shares, if applicable. Upon surrender of a
Certificate or affidavit of loss therefor for cancellation to the
Exchange Agent or to such other agent or agents as may be
appointed by P-Com, together with such letter of transmittal,
duly executed and completed in accordance with the instructions
thereto, the holder of such Certificate shall be entitled to
receive in exchange therefor the number of shares of P-Com Common
Stock and cash for fractional shares, if applicable, to which the
holder of CRC capital stock is entitled pursuant to Section 2.1
hereof together with any dividend or distribution thereon which
may have been paid since the Effective Time of the Merger. The
Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of CRC capital stock which is
not registered on the transfer records of CRC, the appropriate
number of shares of P-Com Common Stock may be delivered to a
transferee if the Certificate or affidavit of loss representing
such CRC capital stock is presented to the Exchange Agent and
accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes
have been paid. Until surrendered as contemplated by this
Section 2.2, each Certificate shall be deemed at all times after
the Effective Time of the Merger to represent the right to
receive upon such surrender the number of shares of P-Com Common
Stock as provided by this Article II and the provisions of the
DCL together with any dividend or distribution thereon which may
have been paid since the Effective Time of the Merger but shall,
subject to Section 2.1(h), have no other right; provided,
however, that customary and appropriate certifications and
indemnities allowing exchange against lost or destroyed
certificates shall be provided; and provided further that nothing
in this Section 2.2(c) shall require P-Com to exchange its Common
Stock to any holder of CRC capital stock who shall fail to
surrender a certificate representing such shares or the
certification and indemnities relating to a lost certificate.
Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to a holder of shares of CRC capital
stock for any P-Com Common Stock or any dividend or distribution
in respect thereof delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
Promptly following the date that is six (6) months after the
Effective Date, the Exchange Agent shall return to the Surviving
Corporation all shares of P-Com Common Stock in its possession
relating to the transactions described in this Agreement and any
dividend or distribution in respect thereof, and the Exchange
Agent's duties shall terminate. Thereafter, each holder of a
Certificate may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property,
escheat and similar laws) receive in exchange therefor the shares
of P-Com Common Stock and any dividend or distribution in respect
thereof to which such holder is entitled pursuant hereto.
(d) No Further Ownership Rights in Capital Stock of CRC.
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All P-Com Common Stock delivered upon the surrender for
exchange of shares of capital stock of CRC in accordance with the
terms hereof shall be deemed to have been delivered in full
satisfaction of all rights pertaining to such shares of capital
stock of CRC. There shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of capital stock of CRC which were
outstanding immediately prior to the Effective Time of the
Merger. If, after the Effective Time of the Merger, Certificates
are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article II.
II.3 Supplementary Action. If at any time after the
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Effective Time, any further assignments or assurances in law or
any other things are necessary or desirable to vest or to perfect
or confirm of record in the Surviving Corporation the title to
any property or rights of either CRC or Sub or otherwise to carry
out the provisions of this Agreement, the officers and directors
of the Surviving Corporation are hereby authorized and empowered,
in the name of and on behalf of CRC and Sub, to execute and
deliver any and all things necessary or proper to vest or to
perfect or confirm title to such property or rights in the
Surviving Corporation, and otherwise to carry out the purposes
and provisions of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CRC
AND THE KEY SECURITYHOLDERS
III.1 Representations and Warranties of CRC and each Key
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Securityholder. Except as set forth in a letter specifically
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referring to a subsection of this Section 3.1 of this Agreement
(the "Disclosure Letter") delivered by CRC and the Key
Securityholders to P-Com, each of CRC and the Key
Securityholders, jointly and severally, represent and warrant to
P-Com and Sub that the representations and warranties set forth
below shall be true and correct as of the date hereof and as of
the Closing; provided, however, that any and all representations
and warranties made by the Key Securityholders in this Article
III shall be made to the best of their knowledge after due
inquiry. For purposes of these representations and warranties
and indemnities, CRC shall also refer to and include all
subsidiaries and joint ventures of CRC, if applicable. As used
in this Agreement, "Business Condition" with respect to CRC shall
refer to CRC's financial or other condition, property, results of
operations and assets (taken as a whole) and its business as
presently conducted.
To the extent that the representations and warranties
are qualified as to the best of the knowledge of the Key
Securityholders after due inquiry, such representations and
warranties are made by CRC without qualification or limitation.
(a) Organization of CRC. CRC is a corporation duly
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organized and validly existing and in good standing under the
laws of the state of Delaware and has all corporate power and
authority to own, operate and lease its properties and to carry
on its business in the places where its business is now conducted
and to directly own, lease, and operate its business. CRC is
duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the nature of its business or the
ownership of its properties makes such qualification necessary,
except where the failure to be so qualified or in good standing
would not have a material adverse effect on the Business
Condition. CRC has delivered to P-Com complete and correct
copies of its Certificate of Incorporation and Bylaws, and all
amendments thereto, and has delivered or provided for P-Com's
review complete and correct copies of all minutes of all
directors' and stockholders' meetings, complete and accurate as
of the date hereof, and stock certificate books of CRC (as of the
Closing), which correctly set forth the record ownership of all
outstanding shares of capital stock of CRC.
(b) Capital Structure.
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(i) The authorized capital stock of CRC consists
of four million (4,000,000) shares of Common Stock, par value
$.01 per share. As of the date of this Agreement, there were
issued and outstanding Two Million Eight Hundred Twenty Four
Thousand Seven Hundred Fifty Eight (2,824,758) shares of CRC
Common Stock. As of the date of this Agreement, there were Three
Hundred Twenty Seven Thousand Five Hundred (327,500) shares of
Common Stock reserved for issuance upon the exercise of
outstanding options to purchase shares of CRC Common Stock (the
"CRC Options"). There are no outstanding shares of CRC capital
stock or any other equity securities or rights to purchase equity
securities of CRC, other than as described in the preceding
sentences.
(ii) All outstanding shares of CRC Common Stock
are, and any shares of CRC Common Stock issued upon exercise of
any CRC Option will be, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights
created by statute, CRC's Certificate of Incorporation or Bylaws,
or any agreement to which CRC is a party or by which CRC may be
bound. All outstanding common stock or other CRC securities have
been issued in compliance with applicable federal and state
securities laws. Holders of issued and outstanding CRC Common
Stock have no basis for asserting rights to rescind the purchase
of any such CRC Common Stock. Except as set forth in Section
3.1(b)(i), there are no other options, warrants, calls,
conversion rights, commitments or agreements of any character to
which CRC is a party or by which CRC may be bound that do or may
obligate CRC to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of CRC capital stock or that
do or may obligate CRC to grant, extend or enter into any such
option, warrant, call, conversion right, commitment or agreement.
(iii) Schedule 3.1(b) contains a complete and
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accurate list of, and the number of shares owned of record by,
the holders of outstanding CRC Common Stock and their state or
country of residence.
(iv) All of CRC's incentive stock options under
Section 422 of the Internal Revenue Code have been issued in
compliance with all laws, rules and regulations necessary to
preserve such incentive stock option treatment. None of the
issued and outstanding shares of CRC common stock is subject to
repurchase or redemption. All CRC options have been issued in
accordance with CRC's stock option plans and all state securities
laws. The CRC stock option plans and all amendments thereto have
been approved by all requisite CRC Securityholder action. CRC
does not have in effect any stock appreciation rights plan and no
stock appreciation rights are currently outstanding. The
consummation of the Merger shall not cause an acceleration in the
vesting or lapse of any restriction or right of any of CRC's
securities.
(v) Except for any restrictions imposed by
applicable state and federal securities laws, there is no right
of first refusal, co-sale right, right of participation, right of
first offer, option or other restriction on transfer applicable
to any shares of CRC capital stock to which CRC is a party or
which are known to CRC.
(vi) CRC is not a party or subject to any
agreement or understanding, and there is no agreement or under
standing between or among any persons that affects or relates to
the voting or giving of written consent with respect to any
outstanding security of CRC.
(c) Authorization of CRC. CRC and each Key
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Securityholder has full power and authority to enter into this
Agreement and the Agreement of Merger, the Escrow Agreement and
the Registration Rights Agreement (collectively, the "Related
Agreements") to which it or they are a party, to perform its
obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Related Agreements by all
parties, the performance by CRC and the Key Securityholders of
their respective obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by CRC's Board of
Directors. Each of CRC and the Key Securityholders has taken all
necessary action with respect to the execution and delivery of
this Agreement and the Related Agreements. Each of this
Agreement and the Related Agreements constitutes legal, valid and
binding obligations of CRC and the Key Securityholders,
enforceable in accordance with their respective terms, except as
limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws affecting creditors' rights and
remedies generally.
(d) [Intentionally Omitted].
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(e) Conflicts. The execution and delivery of this
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Agreement and the Related Agreements do not and, subject to
satisfaction of the conditions set forth in Article VI hereto,
the performance and consummation of the transactions contemplated
hereby and thereby will not, conflict with or result in any
conflict with, breach or violation of any statute, law, rule,
regulation, judgment, order, decree, or ordinance applicable to
CRC or its properties or assets or the assets of any Key
Securityholder, or conflict with or result in any conflict with,
breach or violation of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of
termination, cancellation, forfeiture or acceleration of any
obligation or the loss of a benefit under, or result in the
creation of a lien or encumbrance on any of the properties or
assets of CRC pursuant to (i) any provision of the current
Certificate of Incorporation or Bylaws of CRC or (ii) any
agreement, contract, note, mortgage, indenture, lease,
instrument, permit, concession, franchise or license to which CRC
is a party or by which CRC or any of its property or assets may
be bound or affected.
(f) Consents. No consent, approval, order or
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authorization of, or registration, declaration of, or
qualification or filing with, any court, administrative agency,
commission, regulatory authority or other governmental or
administrative body or instrumentality, whether domestic or
foreign (a "Governmental Entity"), is required by or with respect
to CRC in connection with the execution and delivery of this
Agreement and the Related Agreements by CRC or the consummation
by CRC of the transactions contemplated hereby or thereby, except
for (i) the filing of the Agreement of Merger pursuant to Section
251(c) of the DCL and appropriate documents with the relevant
authorities of other states in which CRC is qualified to do
business; (ii) such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the Merger; and
(iii) filings, if any, required to be made by each of P-Com and
CRC under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
0000 (xxx "XXX Xxx").
(g) Financial Information. CRC has furnished to P-Com
---------------------------
a complete and accurate copy of its audited balance sheet as of
December 31, 1994, December 31, 1995 and 1996 and its audited
statements of operations, cash flow and stockholders' equity for
each of its fiscal years ended December 31, 1994, 1995 and 1996
(collectively the "CRC Financial Statements"). The CRC Financial
Statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied and
fairly present the consolidated financial position of CRC as and
at the dates thereof and CRC's consolidated results of operations
and cash flows for the periods then ended. The notes to the CRC
Financial Statements as at and for each such period set forth in
reasonable detail CRC's accounting policies, principles and
methods with respect to the calculation of its accounts
receivable (including policies for its revenue and cost
recognition and research and development costs). For purposes of
this representation, all of CRC's financial statements audited by
KPMG Peat Marwick, LLP in connection with any report filed by P-
Com with the Securities and Exchange Commission shall be deemed a
component of the "CRC Financial Statements" and the
representations and warranties set forth in this paragraph (g)
shall be deemed to refer to and include such financial
statements. The projections of CRC dated February 10, 1997 and
attached hereto as Exhibit 3.1(g) were prepared in good faith and
are based on reasonable assumptions as set forth therein. All of
CRC's general ledgers, books and records are located at CRC's
principal place of business. CRC does not have any of its
records, systems, controls, data or information recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon
or held by any means (including any electronic, mechanical or
photographic process, whether computerized or not) that
(including all means of access thereto and therefrom) are not
under the exclusive ownership and direct control of CRC.
(h) Absence of Certain Changes and Events. Since
-------------------------------------------
December 31, 1996, there has not been:
(i) any material adverse change in the financial
condition, results of operation, assets, liabilities or business
of CRC (or any occurrence, circumstance, or combination thereof
which could reasonably be expected to result in any such material
adverse change) from that reflected in the CRC Financial
Statements; provided, however, that any changes in the financial
condition, results of operation, assets, liabilities or business
of CRC resulting from adjustments to financial statements of CRC
for periods prior to or including the Closing Date made at the
specific direction of P-Com shall not be deemed to be a material
adverse change for purposes of this Section 3.1(h).
(ii) any event, including, without limitation,
shortage of materials or supplies, fire, explosion, accident,
requisition or taking of property by any governmental agency,
flood, drought, earthquake, or other natural event, riot, act of
God or a public enemy, or damage, destruction, or other casualty,
whether covered by insurance or not, which has had a material
adverse effect on the Business Condition or any such event which
reasonably could be expected to have such a material adverse
effect on the Business Condition;
(iii) any material transaction (other than the
transactions contemplated herein) which was entered into or
carried out by CRC other than in the ordinary and usual course of
business, other than transactions to borrow money either (x) from
P-Com or (y) failing a loan by P-Com, from a third party,
provided that such loan or loans are not senior in priority or
preference to the existing indebtedness to P-Com, are at market
rates, the proceeds therefrom are used solely for working capital
purposes by CRC and the total outstanding indebtedness of CRC at
any time does not exceed $4,000,000;
(iv) any increase in or modification of the
compensation or benefits payable or to become payable by CRC to
any of its "service providers" (which when used in this
Agreement, shall be defined to consist of CRC's employees,
consultants and independent contractors) or changes pursuant to
employment agreements currently in effect or changes in position
except such increases or modifications as would be permitted
pursuant to Section 5.1(n) hereof;
(v) any increase in or modification of any bonus,
pension, insurance or other employee benefit plan, payment or
arrangement (including, without limitation, the granting of stock
options, restricted stock awards or stock appreciation rights)
made to, for or with any of its service providers;
(vi) any alteration in any term of any outstanding
security of CRC;
(vii) any making of any loan, advance or capital
contribution to, or investment in, any person other than advances
made in the ordinary course of business of CRC;
(viii) any change made by CRC in its method of
operating the business of CRC or in its accounting practices
relating thereto;
(ix) any mortgage, pledge, lien, security
interest, hypothecation, charge or other encumbrance imposed or
agreed to be imposed on the assets of CRC other than liens
arising with respect to taxes not yet due and payable, and such
liens and encumbrances, if any, which arise in the ordinary
course of business and are not material in nature or amount
either individually or in the aggregate, and which do not detract
from the value of the assets of CRC or impair the operations
conducted thereon;
(x) any sale, lease, or disposition of, or any
agreement to sell, lease, or dispose of any of the assets of CRC,
other than sales, leases, or dispositions in the usual and
ordinary course of business and consistent with prior practice;
(xi) any modification, waiver, change, amendment,
release, rescission, accord and satisfaction, or termination of,
or with respect to, any material term, condition, or provision of
any contract, agreement, license, or other instrument to which
CRC is a party and relating to or affecting the Business
Condition, other than any satisfaction by performance in
accordance with the terms thereof in the usual and ordinary
course of business and consistent with prior practice;
(xii) any labor disputes or disturbances affecting
in an adverse fashion the Business Condition, including, without
limitation, the filing of any petition or charge of unfair labor
practices with the National Labor Relations Board;
(xiii) any notice (written or unwritten) from any
employee of CRC who provides any services to CRC that such
employee has terminated, or intends to terminate, such employee's
employment with CRC;
(xiv) any notice (written or unwritten) from any of
CRC's suppliers that any such supplier will not continue to
supply the current level and type of goods currently being
provided by such supplier to CRC on similar terms and conditions;
(xv) any adverse relationships or conditions with
vendors or customers that may have a material adverse effect on
the Business Condition;
(xvi) any waivers, compromises or discharges of any
rights or debt owed of substantial value to CRC;
(xvii) any other event or condition of any character
which materially adversely affects, or may reasonably be expected
to so affect, the Business Condition; or
(xviii) any purchase or lease of or any agreements to
purchase or lease capital assets by CRC in excess of $10,000
individually, or in excess of $25,000 in the aggregate.
(xix) any issuance, redemption, repurchase or other
acquisition of shares of CRC Common Stock (other than issuances
pursuant to exercise of CRC Options or repurchases of CRC Common
Stock at cost in the ordinary course under the terms of
agreements relating to CRC Restricted Stock (as defined in
Section 2.1(f)), or any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or
property) with respect to CRC Common Stock;
(xx) any (A) incurrence, assumption or guarantee
by CRC of any debt for borrowed money other than trade
indebtedness incurred in the ordinary course of business
consistent with past practice, borrowings by CRC under its credit
agreement in the ordinary course of business and borrowings by
CRC from P-Com and failing a loan by P-Com, from a third party,
provided that such loan or loans are not senior in priority or
preference to the existing indebtedness to P-Com, are at market
rates, the proceeds therefrom are used solely for working capital
purposes by CRC and the total outstanding indebtedness of CRC at
any time does not exceed $4,000,000; (B) any waiver or compromise
by it of a valuable right or of a debt owed to it; (C) any
satisfaction or discharge of any lien, claim, or encumbrance or
payment of any obligation by it, except that which is not
material to its Business Condition; (D) issuance or sale of any
securities convertible into or exchangeable for debt securities
of CRC; or (E) issuance or sale of options or other rights to
acquire from CRC, directly or indirectly, debt securities of CRC
or any securities convertible into or exchangeable for any such
debt securities;
(xxi) any transfer or grant of a right under the
CRC Intellectual Property Rights (as defined in Section 3.1(o))
other than those transferred or granted in the ordinary course of
business consistent with past practice; or
(xxii) Any agreement or arrangement made by CRC to
take any action which, if taken prior to the date hereof, would
have made any representation or warranty set forth in this
Section 3.1 untrue or incorrect as of the date when made.
(i) Conduct of Business. At all times since
-------------------------
December 31, 1996, CRC has conducted its business in the ordinary
course thereof and used reasonable commercial efforts to preserve
intact the organization of its business and the goodwill of its
customers, suppliers, and others having business relations with
CRC.
(j) Undisclosed Liabilities. There are no debts,
-----------------------------
liabilities, or obligations with respect to CRC or to which the
assets of CRC or its business, property or assets are subject,
whether liquidated, unliquidated, accrued, absolute, contingent
or otherwise, that are not identified in the Disclosure Letter or
reflected in the Financial Statements, except for liabilities and
obligations arising subsequent to December 31, 1996 from the
operations of the business of CRC in the ordinary course
consistent with prior practices (including borrowings under CRC's
revolving credit agreement) and borrowings from P-Com, which are
individually less than $20,000 and are less than $50,000 in the
aggregate.
(k) Inventory. Schedule 3.1(k) lists all inventory
--------------------------------
owned by CRC as of December 31, 1996, including goods supplied to
CRC by suppliers, goods on consignment, and all other goods custo
xxxxxx sold by CRC (whether located on the premises of CRC, in
transit to or from such premises, in other storage facilities, or
otherwise), and identifies whether such inventory is owned by CRC
or held on consignment (collectively, the "Inventory"). The
Inventory is valued at cost (determined on a first-in first-out
basis) or market, whichever is lower, with allowances for excess
and obsolete materials and materials below standard quality
determined in accordance with GAAP consistently applied. The
quality and quantity of the Inventory is such that the Inventory
is, in all material respects, readily usable and saleable in the
ordinary course of the business of CRC, except such amounts as
are reserved in accordance with GAAP consistently applied. All
Inventory materially in excess of reasonable estimated
requirements for CRC based on current operations for the nine (9)
months from the date hereof is set forth in Schedule 3.1(k).
Except as disclosed in Schedule 3.1(k), CRC holds no Inventory
manufactured to customer specifications effectively rendering the
Inventory saleable only to that customer. CRC has continued to
replenish the Inventory in a normal and customary manner
consistent with past practices.
(l) Taxes.
-----------
(i) For purposes of this Agreement, the following
terms have the following meanings: "Tax" (and, with correlative
meaning, "Taxes" and "Taxable") means any and all taxes or
obligations with respect thereto, including, without limitation,
(i) any income, profits, alternative or add-on minimum tax, gross
receipts, sales, use, value-added, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, net worth, premium,
property, environmental or windfall profit tax, custom, duty or
other tax, governmental fee or assessment or charge of any kind
whatsoever, together with any interest or any penalty, addition
to tax or additional amount imposed by any Governmental Entity
responsible for the imposition of any such tax (domestic or
foreign) (a "Taxing Authority"); (ii) any liability for the
payment of any amounts of the type described in clause (i) above
as a result of being a member of an affiliated, consolidated,
combined or unitary group for any Taxable period or as the result
of being a transferee or successor thereof; and (iii) any
liability for the payment of any amounts of the type described in
clause (i) or (ii) above as a result of any express or implied
obligation to indemnify any other person.
(ii) All Tax returns, statements, reports and
forms (including estimated Tax returns and reports and
information returns and reports) required to be filed with any
Taxing Authority with respect to any Taxable period ending on or
before the Effective Time of the Merger, by or on behalf of CRC
(collectively, the "CRC Returns"), have been or will be completed
and filed in correct form when due (including any extensions of
such due date), and all amounts shown to be due thereon on or
before the Effective Time of the Merger have been or will be paid
on or before such date; the CRC Financial Statements fully accrue
all actual and contingent liabilities for Taxes with respect to
all periods through the dates thereof in accordance with GAAP;
the December 31, 1996 balance sheet (i) fully accrues all actual
and contingent liabilities for Taxes with respect to all periods
through December 31, 1996 and CRC has not and will not incur any
Tax liability in excess of the amount reflected on the December
31, 1996 balance sheet with respect to such periods less any
amount thereof that represents a reserve for deferred taxes
established to reflect any differences between book and tax
income, and (ii) properly accrues in accordance with GAAP all
liabilities for Taxes payable after December 31, 1996 with
respect to all transactions and events occurring on or prior to
such date; no Tax liability of CRC has been incurred since
December 31, 1996, other than in the ordinary course of business;
and all information set forth in the notes to the CRC Audited
Financial Statements relating to Tax matters is presented in
accordance with GAAP and is true and accurate in all material
respects. Neither CRC nor any member of any affiliated or
combined group of which CRC has been a member has granted any
extension or waiver of the limitation period applicable to any
CRC Returns.
(iii) With respect to all amounts in respect of
Taxes imposed upon CRC or for which CRC is or will be liable,
whether to taxing authorities (as, for example, under law) or to
other persons or entities (as, for example, under tax allocation
agreements), with respect to all Taxable periods or portions of
periods ending on or before the date of Closing, all applicable
tax laws and agreements have been or will be fully complied with,
and all such amounts required to be paid by CRC to Taxing
authorities or others on or before the date of this Agreement
have been paid. Except for current periods with respect to which
Taxes are not yet due, CRC does not owe any Taxes on compensation
paid to any of its employees.
(iv) There is no claim, audit, action, suit,
proceeding or investigation now pending or threatened against or
with respect to CRC in respect of any Tax or assessment. There
are no liabilities for Taxes with respect to any notice of
deficiency or similar document of any Tax Authority received by
CRC which have not been satisfied in full (including liabilities
for interest, additions to Tax and penalties thereon and related
expenses). Neither CRC nor any person on behalf of CRC has
entered into or will enter into any agreement or consent pursuant
to Section 341(f) of the Code. There are no liens for Taxes upon
the assets of CRC, except liens for current Taxes not yet due.
Except as may be required as a result of the Merger, CRC has not
been and will not be required to include any adjustment in
Taxable income for any Tax period (or portion thereof) pursuant
to Section 481 or 263A of the Code or any comparable provision
under state or foreign Tax laws as a result of transactions,
events or accounting methods employed prior to the Closing.
(v) There is no contract, agreement, plan or
arrangement, including, without limitation, the provisions of
this Agreement, covering any current or former service provider
of CRC that, individually or collectively, could give rise to the
payment of any amount that would not be deductible pursuant to
Section 280G or Section 162 of the Code (as determined without
regard to Section 280G(b)(4)); CRC is not a party to or bound by
(or will prior to the Effective Date become a party to or bound
by) any tax indemnity, tax sharing or tax allocation agreement
(whether written, unwritten or arising under operation of federal
law as a result of being a member of a group filing consolidated
tax returns, under operation of certain state laws as a result of
being a member of a unitary group, or under comparable laws of
other states or foreign jurisdictions) which includes a party
other than CRC; none of the assets of CRC (i) is property that
CRC is required to treat as owned by any other person pursuant to
the so-called "safe harbor lease" provisions of former
Section 168(f)(8) of the Code, (ii) directly or indirectly
secures any debt the interest on which is tax exempt under
Section 103(a) of the Code, or (iii) is "tax exempt use property"
within the meaning of Section 168(h) of the Code; CRC has not
participated in (and prior to the Effective Date CRC will not
participate in) an international boycott within the meaning of
Section 999 of the Code; CRC has previously provided or made
available to P-Com true and correct copies of all CRC Returns,
and, as reasonably requested by P-Com, prior to or following the
date hereof, presently existing information statements, reports,
work papers, Tax opinions and memoranda and other Tax data and
documents.
(vi) Schedule 3.1(1) lists (i) any foreign Tax
------------------------
holidays that CRC has in any jurisdiction, including the nature,
amount and lengths of such Tax holiday, (ii) any intercompany
transfer pricing agreements or other arrangements that have been
established by CRC in any foreign jurisdiction and (iii) any
expatriate tax programs or policies affecting CRC. CRC is not,
and has not been, a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during
the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.
(vii) No stockholder of CRC is other than a United
States person within the meaning of the Code, except as indicated
on Schedule 3.1(b).
---------------
(viii) CRC does not have and has not had a permanent
establishment in any foreign country, as defined in any
applicable Tax treaty or convention between the United States of
America and such foreign country and CRC has not engaged in a
trade or business within any foreign country.
(ix) CRC is not party to any joint venture,
partnership, or other arrangement or contract which could be
treated as a partnership for federal income tax purposes.
(x) CRC's basis, and excess loss account, if any,
in each subsidiary of CRC, if applicable, is set forth in
Schedule 3.1(l). The earnings and profits (and any adjustment
required by Section 1503(e) of the Code) for each subsidiary are
set forth in Schedule 3.1(l).
(xi) All material elections with respect to Taxes
affecting CRC as of the date of this Agreement are set forth in
Schedule 3.1(l). No material election with respect to Taxes will
be made without the prior written consent of CRC.
(xii) CRC is not currently and never has been
subject to the reporting requirements of Section 6038A of the
Code.
(m) Employee Matters.
---------------------
(i) The hours worked by and payments made to CRC
employees have not been in violation of the Fair Labor Standards
Act or any other applicable federal, foreign, state or local laws
dealing with such matters except where such violations, would not
be material to the Business Condition of CRC.
(ii) All payments due from CRC on account of
employee health and welfare insurance have been paid.
(iii) All severance and similar payments by CRC
which are or were due under the terms of any agreement or
otherwise have been paid in full.
(n) Compliance With Law. Schedule 3.1(n) sets forth
------------------------------------------
all of CRC's franchises, licenses, permits, use permits,
consents, authorizations and approvals of any federal, foreign,
state or local regulatory, administrative, or other governmental
or zoning agency or body (collectively referred to herein as
"Governmental Permits"). CRC has, in all material respects,
complied and is in compliance with all applicable federal,
foreign, state, local laws, statutes, licensing requirements,
rules, and regulations, and judicial or administrative or zoning
decisions. CRC has been granted all licenses, permits (temporary
and otherwise), authorizations, and approvals from federal,
foreign, state, and local government regulatory or zoning bodies
necessary to carry on its business and operations and maintain
the assets of CRC, all of which are currently valid and in full
force and effect except where the failure to obtain such
licenses, permits, authorizations and approvals will not have a
material adverse effect on the Business Condition. All such
licenses, permits, authorizations and approvals shall as of the
Effective Date of the Merger be valid and in full force and
effect as to the Surviving Corporation to the same extent that
they were prior to the Effective Time of the Merger. There is no
order, injunction, decree, stipulation or award (whether rendered
by a court or administrative agency or by arbitration) issued
against CRC or any of its properties or businesses. There is no
investigation or proceeding, pending or threatened, or notice
served with respect to any violation of any law, ordinance,
order, writ, decree, rule or regulation issued by any federal,
state, local, or foreign court or governmental agency or
instrumentality applicable to CRC. CRC has valid use permits for
its business and operations.
(o) Intellectual Property Rights.
---------------------------------
(i) CRC owns, or is licensed or otherwise
entitled to exercise, without restriction (other than pursuant to
applicable law and the terms of each such license) all rights to
all patents, trademarks, trade names, service marks, copyrights,
trade secret rights and other intellectual property rights, and
any applications or registrations therefor, and all net lists,
schematics, technology, source code, know-how, computer software
programs and all other tangible and intangible information or
material used or usable by CRC in its business (collectively, the
"Intellectual Property Rights") without any conflict or
infringement of the rights of others. All of such Intellectual
Property Rights are set forth in Schedule 3.1(o).
(ii) Schedule 3.1(o) also lists (i) all
--------------------
patents and all registered copyrights, trade dress, trade names,
trademarks, service marks and other company, product or service
identifiers and mask work rights included in the Intellectual
Property Rights, and specifies the jurisdictions in which each
such Intellectual Property Right has been registered, including
the respective registration numbers; (ii) all licenses,
sublicenses and other agreements as to which CRC is a party and
pursuant to which CRC or any other person is authorized to use
any Intellectual Property Right except for licenses for software
which is generally available; and (iii) if applicable, all
parties to whom CRC has delivered copies of CRC source code,
whether pursuant to an escrow arrangement or otherwise, or
parties who have the right to receive such source code. Copies
of all such licenses, sublicenses, and other agreements
identified pursuant to clause (ii) above have been delivered by
CRC to P-Com.
(iii) CRC is not, or as a result of the
execution and delivery of this Agreement or the performance of
CRC's obligations hereunder will not be, in violation of, or lose
or in any way impair any material rights pursuant to any license,
sublicense or agreement described in Schedule 3.1(o).
(iv) CRC is the absolute owner or licensee
of, with all necessary right, title and interest in and to (free
and clear of any liens, encumbrances or security interests), the
Intellectual Property Rights and has rights to the use, sale,
license or disposal thereof or the material covered thereby in
connection with the services or products in respect of which the
Intellectual Property Rights are being used, sold, licensed or
disposed of. Except as described in the Disclosure Letter, CRC
has taken all commercially reasonable actions and made all
applicable applications and filings pursuant to applicable laws
to perfect or protect its interests in such Intellectual Property
Rights.
(v) No claims with respect to the
Intellectual Property Rights have been asserted or are threatened
by any person, and there are no claims (i) to the effect that the
manufacture, marketing, license, sale or use of any product as
now used or offered or proposed for use or sale by CRC infringes
any copyright, patent, trade secret or other intellectual
property right of any third party or violates any license or
agreement with any third party; (ii) contesting the right of CRC
to use, sell, license or dispose of any Intellectual Property
Rights; or (iii) challenging the ownership, validity or
effectiveness of any of the Intellectual Property Rights.
[(vi) Intentionally Omitted]
(vii) There has not been and there is
not now any unauthorized use, infringement or misappropriation of
any of the Intellectual Property Rights by any third party,
including, without limitation, any service provider of CRC; CRC
has not been sued or charged as a defendant in any claim, suit,
action or proceeding which involves a claim of infringement of
any patents, trademarks, service marks, copyrights or other
intellectual property rights and which has not been finally
terminated prior to the date hereof; there are no such charges or
claims outstanding; and CRC does not have any infringement
liability with respect to any patent, trademark, service xxxx,
copyright or other intellectual property right of another.
(viii) No Intellectual Property Right is
subject to any outstanding order, judgment, decree, or, except as
provided for in the terms of the relevant license, stipulation or
agreement restricting in any manner the licensing thereof by CRC.
CRC has not entered into any agreement granting any third party
the right to bring infringement actions with respect to, or
otherwise to enforce rights with respect to, any Intellectual
Property Right owned by CRC. CRC has the exclusive right to
file, prosecute and maintain all applications and registrations
with respect to the Intellectual Property Rights owned by CRC.
(p) Restrictive Documents or Orders. None of CRC nor
-------------------------------------
any Securityholder is a party to or bound under any agreement,
contract, order, judgment, or decree, or any similar restriction
not of general application which adversely affects, or reasonably
could be expected to adversely affect (i) the continued operation
by P-Com of CRC after the Effective Date of the Merger on
substantially the same basis as said business was theretofore
operated or (ii) the consummation of the transactions
contemplated by this Agreement.
(q) Contracts and Commitments.
-------------------------------
(i) There is set forth on Schedule 3.1(q) a list
of all material outstanding agreements, contracts, contract
rights, licenses, purchase and sale orders, quotations and other
executory commitments (collectively, the "Contracts"), whether or
not in writing, to which CRC or either of the Key Securityholders
is a party that relate to any aspect of the business, assets,
services or properties of CRC.
(ii) CRC and each Key Securityholder, as the case
may be, has performed all of its obligations under the terms of
each Contract and is not in default thereunder. No event or
omission has occurred which but for the giving of notice or lapse
of time or both would constitute a default by any party thereto
under any such Contract; and each such Contract is valid and
binding on all parties thereto and in full force and effect. CRC
has received no written or unwritten notice of default,
cancellation, or termination in connection with any such
Contract.
(iii) There has not been any notice (written or
unwritten) from any of CRC's material suppliers that any such
supplier will not continue to supply the current level and type
of goods currently being provided by such supplier to CRC on the
same terms and conditions.
(iv) Schedule 3.1(q) also lists all material sole
or limited source supply agreements.
(r) Title to the Property. CRC has good and
---------------------------
marketable title to all of its properties, all of which, to the
extent owned by CRC on December 31, 1996, are reflected in the
CRC Financial Statements, in each case free and clear of all
liabilities, mortgages, pledges, liens, charges, conditional sale
or other title retention agreements, assessments, easements,
covenants, restrictions, reservations, commitments, obligations
or other encumbrances of any nature whatsoever, except as set
forth on Schedule 3.1(r). Schedule 3.1(r) hereto also lists all
leases of property to which CRC is a party; all leases of
property are valid, binding and in full force and effect, and
there exists no default thereunder; there exists no restriction
on the use of leased property in connection with the business now
conducted by CRC or any other matter which prevents or impairs
the use of such leased property for the purpose now used; and
CRC has all easements and rights necessary to conduct the
business it now conducts.
(i) All buildings, offices and other
structures occupied by CRC and all machinery, equipment, tools,
fixtures, motor vehicles and other properties owned or used by
CRC are in normal operating condition and repair in accordance
with generally accepted standards except for such property which
has been removed from service and which is not reflected on the
Financial Statements.
(ii) Neither the whole nor any portion of any
property owned or occupied by CRC has been condemned or otherwise
taken by any public authority, nor does CRC believe that any such
condemnation or taking is threatened.
(iii) All of the properties owned or used by
CRC conform in all material respects to all zoning, building,
health, safety laws, regulations and/or ordinances relating to
such property, whether already in effect or whether enacted by
the appropriate legislative bodies but not yet in effect. No
notices of violation relating to any such laws, regulations
and/or ordinances or calling attention to the need for any work,
repairs, constructions, alterations or installations have been
received by CRC, nor has there been any action, inaction or state
of facts which, with or without the passage of time, may
reasonably give rise to any such violation or need for any such
work, repairs, constructions, alterations or installments.
(s) Litigation. None of (i) CRC, (ii) the
----------------
Securityholders nor (iii) any of CRC's officers or directors is
engaged in, or has received any threat of, any litigation, arbi
tration, investigation, claim or other proceeding relating to CRC
or its officers, directors, employees, benefit plans, properties,
Intellectual Property Rights, the business, properties or assets
of CRC, licenses, permits or goodwill, or against or affecting
the actions taken or contemplated in connection therewith, nor is
there any basis therefor. There is no action, suit, proceeding,
or investigation pending or threatened against CRC, or the Key
Securityholders, or the officers or directors of CRC, that
questions the validity of this Agreement, the Related Agreements,
or the right of CRC or the Key Securityholders to enter into this
Agreement, the Related Agreements, or to consummate the
transactions contemplated hereby or thereby, or which might
reasonably be expected to result in any material adverse change
in the business, condition or properties of CRC. There is no
action, suit, proceeding, or investigation by CRC or the Key
Securityholders currently pending or which any of them currently
intends to initiate. None of CRC, the Key Securityholders, nor
any of CRC's officers or directors is bound by any judgment,
decree, injunction, ruling or order of any court, governmental,
regulatory or administrative department, commission, agency or
instrumentality, arbitrator or any other person which would or
could have a material adverse effect on the Business Condition.
(t) Labor Relations/Personnel.
-------------------------------
(i) CRC has not failed to comply in any material
respect with Title VII of the Civil Rights Act of 1964, as
amended, the Fair Labor Standards Act, as amended, the
Occupational Safety and Health Act of 1970, as amended, all appli
cable, foreign, federal, state, and local laws, rules, and
regulations relating to employment, and all applicable laws,
rules and regulations governing payment of minimum wages and
overtime rates and the withholding and payment of taxes from
compensation of employees.
(ii) There are no material labor controversies
pending or threatened between CRC and any of its employees or any
labor union or other collective bargaining unit representing any
of the employees.
(iii) There are no service providers whose
annual base salary exceeds $50,000 who have indicated to CRC a
present intention to resign or retire, except as set forth on
Schedule 3.1(t).
(iv) CRC has never entered into a collective
bargaining agreement or other labor union contract applicable to
its employees.
(v) Except as set forth on Schedule 3.1(t), there
are no written employment or separation agreements, or oral
employment or separation agreements other than those establishing
an "at-will" employment relationship between CRC and any of its
employees. CRC does not have any obligation (a) to provide any
particular form or period of notice prior to termination except
such obligations as are imposed by law generally or (b) to pay
any of such employees any severance benefits in connection with
their termination of employment service. In addition, no
severance pay will become due to any CRC employees or other
service providers in connection with the Merger, as a result of
any CRC agreement, plan or program.
(vi) Attached hereto as Schedule 3.1(t) is a list
of all current directors, officers and employees of CRC setting
forth the job title and salary (including bonuses and
commissions) payable to each such person. Schedule 3.1(t) also
includes independent contractors and consultants of CRC, none of
which receive hourly wages or possess job titles.
(u) Employee Plans. All plans, programs, policies,
--------------------
commitments or other arrangements (whether or not set forth in a
written document) maintained by or on behalf of CRC that provide
deferred or incentive compensation, stock options or other stock
purchase rights, severance or termination pay, medical, dental,
life, disability or accident benefits (whether or not insured),
collective bargaining agreements, benefits described in
Sections 125 or 129 of the Code, or pension, profit sharing or
retirement benefits to, or for the benefit of, any active, former
or retired service provider of CRC or their spouses or dependents
are set forth in Schedule 3.1(u) (collectively, the "Plans").
Any Plan intended to be qualified under Section 401(a) of the
Code has either obtained a favorable determination letter as to
its qualified status from the Internal Revenue Service ("IRS") or
still has a remaining period of time under applicable Treasury
Regulations or IRS pronouncements in which to apply for such
determination letter and to make any amendments necessary to
obtain a favorable determination. To the extent any Plan with an
existing determination letter from the IRS must be amended to
comply with the applicable requirements of the Tax Reform Act of
1986 and subsequent legislation, the time period for effecting
such amendments will not expire prior to the Merger. CRC has
furnished to P-Com copies of the Plans and related Plan documents
(including trust documents, insurance policies or contracts,
employee booklets, summary plan descriptions and other
authorizing documents, and to the extent still in its possession
any material employee communications relating thereto) and, where
applicable, will provide, as soon as practicable hereafter,
copies of the most recent IRS determination letters and
Forms 5500 with respect to any such Plan. No Plan is covered by
Title IV of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 412 of the Code. Neither CRC
nor any officer or director of CRC, or trustee or administrator
of a CRC Plan is subject to any liability or penalty under
Sections 4975 through 4980 of the Code or Title I of ERISA in
connection with any Plan. CRC has not violated any of the health
care continuation coverage requirements of the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") applicable to
its employees. Each Plan has been maintained and administered in
all respects in compliance with its terms and with the
requirements prescribed by all statutes, orders, rules and
regulations, including but not limited to ERISA and the Code,
which are applicable to such Plan, except to the extent
noncompliance would not have a material and adverse effect on the
operation of such Plan. No suit, administrative proceeding,
action or other litigation has been brought or is threatened
against or with respect to any such Plan, including any audit or
inquiry by the IRS or United States Department of Labor. All
contributions, reserves or premium payments required to be made
or accrued as of the date hereof to the Plans have been made or
accrued.
(v) Brokers' and Finders' Fees/Contractual Limitations.
--------------------------------------------------------
Neither CRC nor any Securityholder is obligated to pay
any fees or expenses of any broker or finder in connection with
the origin, negotiation, or execution of this Agreement or in
connection with any transactions contemplated hereby. Neither
CRC nor any officer, director, employee, Securityholder, agent,
or representative of CRC (collectively "Agent/Representatives"),
are or have been subject to any agreement, letter of intent or
understanding of any kind which prohibits, limits, or restricts
CRC or Agent/Representatives from negotiating, entering into and
consummating this Agreement, the Related Agreements and the
transactions contemplated hereby and thereby.
(w) Interested Party Relationships. Except as set
------------------------------------
forth on Schedule 3.1(w), neither CRC nor any officer, director
nor 10% Securityholder of CRC (collectively, the "Interested
Parties") (nor any family member of any Interested Party or any
corporation, partnership or other entity which, directly or
indirectly, alone or together with others, controls, is
controlled by, or is in common control with any Interested Party,
CRC or any such family member) have any material financial
interest, direct or indirect, in any material supplier or
customer, any party to any contract which is material to CRC or
any competitor of CRC.
(x) Products Liability. There are no claims against
------------------------
CRC, fixed or contingent, asserting (a) any damage, loss or
injury caused by any product or (b) any breach of any express or
implied product warranty or any other similar claim with respect
to any product other than standard warranty obligations (to
replace, repair or refund) made by CRC in the ordinary course of
business, except for those claims that, if adversely determined
against CRC, would not have a material adverse effect on the
Business Condition of CRC. As used herein, "product" shall mean
any products manufactured, designed, developed, distributed,
sold, re-sold, customized or serviced by CRC.
(y) Product Warranties. CRC has provided to P-Com
------------------------
copies or descriptions of its warranty policies and all out
standing oral and written warranties or guarantees relating to
any of CRC's products, if any, other than warranties or
guarantees implied by law.
(z) Customers. Except as indicated on Schedule 3.1(z)
---------------
attached hereto, no single customer of CRC accounted for more
than 2% of the net sales of CRC during the twelve-month period
ended December 31, 1996. CRC has furnished P-Com with complete
and accurate copies or descriptions of all current agreements
(written or unwritten) with such customers. There is no
complaint, event, happening or fact which would lead CRC to
believe that any relationship with any of such customers has
deteriorated or that any of such customers intends to cancel any
orders in backlog.
(aa) Suppliers. Schedule 3.1(aa) hereto lists all
---------------------------------
suppliers of goods to CRC during the prior two (2) years and the
value of goods supplied to CRC in each such year where such value
exceeds $10,000 per annum. There has not been any event,
happening or fact which would lead CRC to believe any of such
suppliers will not continue to supply the current level and type
of goods currently being provided to CRC on similar terms and
conditions.
(bb) Books and Records. The books and records of CRC
-----------------------
to which P-Com and its accountants and attorneys have been given
access are the true books and records of CRC and truly and fairly
reflect the underlying facts and transactions in all material
respects.
(cc) Bank Accounts and Powers of Attorney. Set forth
------------------------------------------
in Schedule (ac) is an accurate and complete list showing (a) the
name and address of each bank in which CRC has an account or safe
deposit box, the number of any such account or any such box, and
the names of all persons authorized to draw thereon or to have
access thereto and (b) the names of all persons, if any, holding
powers of attorney from CRC and a summary statement of the terms
thereof.
(dd) Complete Disclosure. No representation or
-------------------------
warranty made by CRC or any Key Securityholder in this Agreement,
nor any document, written information, statement (oral or
written), financial statement, certificate, schedule or exhibit
prepared and furnished, or to be prepared and furnished by CRC or
any Key Securityholder or its respective representatives pursuant
hereto or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which
they were furnished which has not been corrected in subsequent
documents, written information, written statements, financial
statements or by certificates, schedules or exhibits, as the case
may be, and provided to P-Com. All schedules and exhibits pre
pared by CRC and the Key Securityholders shall be updated as of
the Closing in a form reasonably acceptable to P-Com. There is
no event, fact or condition that has resulted in, or could reason
ably be expected to result in any event, change or effect that is
materially adverse to the Business Condition of CRC taken as a
whole that has not been set forth in this Agreement or in the
Disclosure Letter.
(ee) Insurance. Schedule 3.1(ae) lists all insurance
---------------------------------
policies and fidelity bonds covering the assets, business,
equipment, properties, operations, employees, officers and
directors of CRC, the amounts of coverage under each such policy
and bond of CRC. CRC has not been refused any requested coverage
and no material claim made by CRC has been denied by the
underwriters of such policies or bonds. All premiums due under
all such policies and bonds have been paid and CRC is otherwise
in full compliance with the terms of such policies and bonds (or
other policies and bonds providing substantially similar
insurance coverage). CRC does not know of any threatened
termination of, the invalidation of any coverage of or material
premium increase with respect to, any of such policies.
(ff) Environmental Matters.
---------------------------
(i) For purposes of this Section 3.1(af), the
following terms shall have the following meanings:
"Court Order" shall mean any judgment, order,
award or decree of any foreign, federal, state, local or other
court or tribunal, or any governmental entity, and any award in
any arbitration proceeding.
"Disposal Site" shall mean landfill, disposal
agent, waste hauler or recycler of Hazardous Materials.
"Environmental Encumbrance" shall mean any lien,
claim, charge, security interest, mortgage, pledge, easement,
conditional sale or other title retention agreement, defect in
title, covenant or other restrictions of any kind in favor of any
governmental entity for (i) any liability under any Environmental
Law or (ii) damages arising from, or costs incurred by such
governmental entity in response to, a Release or threatened
Release of a Hazardous Material into the environment.
"Environmental Laws" shall mean all Requirements
of Laws which relate to any Hazardous Material or the use,
handling, transportation, production, spill, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, Release,
threatened Release, migration, emission, sale or storage of, or
the exposure of any person to, a Hazardous Material.
"Governmental Permits" shall mean all licenses,
franchises, permits, privileges, immunities, approvals and other
authorizations from a governmental entity.
"Hazardous Material" shall mean any material or
substance that is prohibited or regulated by any Requirement of
Law or that is designated by any governmental entity to be
radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment.
"Hazardous Materials Activities" shall mean the
use, handling, transportation, distribution, sale, Release or
threatened Release of, or Remedial Action concerning any
Hazardous Material, performed in connection with the Real
Property.
"Real Property" shall mean real property now or at
any time in the past owned or leased by CRC or any predecessors
or affiliates.
"Release" shall mean release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration of a Hazardous Material in, on,
under or through the Real Property or the air, soil, surface
water, ground water or improvements thereof.
"Remedial Action" shall mean any reporting,
investigation, characterization, feasibility study, health
assessment, risk assessment, remediation, treatment, recycling,
removal, transport, monitoring, maintenance or any other activity
incident to the Release, threatened Release, investigation,
remediation or removal of a Hazardous Material existing on the
Real Property or in, on, under or through the air, soil, ground
water, surface water or improvements thereof.
"Requirements of Laws" shall mean any foreign,
federal, state and local laws, statutes, regulations, rules,
guidelines, codes, ordinances, judgments, injunctions, decrees,
orders, permits, approvals, treaties or protocols enacted,
adopted, issued or promulgated by any governmental entity
(including, without limitation, those pertaining to electrical,
building, zoning, environmental and occupational safety and
health requirements) or common law in effect on the date hereof.
(ii) Except as set forth in Schedule 3.1(af),
(A) CRC complies in all material respects
with all applicable Environmental Laws;
(B) CRC has obtained all environmental,
health and safety Governmental Permits necessary for its
operation or required by any Environmental Laws, all such
Governmental Permits are in good standing, and CRC is in
compliance in all material respects with all terms and conditions
of such permits;
(C) none of CRC nor any of the Real Property
or present or past CRC operations is subject to any pending or
ongoing investigation by, notice or order from or agreement with
any person (including, without limitation, any prior owner or
operator of the Real Property) with respect to (A) any claim of
Environmental Law, (B) any Remedial Action, or (C) any claim of
losses and expenses arising from the Release or threatened
Release of a Hazardous Material;
(D) CRC is not subject to any pending
judicial or administrative proceeding, Court Order or settlement
alleging or addressing a violation of or liability under any
Environmental Law;
(E) CRC has not filed, and CRC does not
intend to file any notice or report under any Environmental Law
reporting an existing or previous violation of any Environmental
Law;
(F) there was not, at the time it was
occupied by CRC, in any CRC Real Property (A) any underground
storage tank or surface impoundment; (B) any landfill or waste
pile which either is or was used in the frequent manner to
dispose or store any Hazardous Material or contains or contained
a substantial volume of Hazardous Material; or (C) any
polychlorinated biphenyls;
(G) CRC has not received any notice of claim
to the effect that it is or may be liable to any person as a
result of the Release or threatened Release of a Hazardous
Material into the environment from or on any Real Property;
(H) There is not any Environmental
Encumbrance on any Real Property;
(I) any asbestos-containing material which
is on or part of any Real Property presently occupied by CRC is
in good repair according to the current standards and practices
governing such material, and its presence or condition does not
violate any currently applicable Environmental Law;
(J) none of the products CRC manufactures,
distributes or sells or has manufactured, distributed or sold in
the past, contains substantial amounts of asbestos-containing
material;
(K) other than Hazardous Materials
reasonably necessary for the conduct of CRC's operations which
are properly stored in accordance with applicable Environmental
Laws, no Hazardous Material (other than Hazardous Material which
is commonly used and not commonly stored, including, by way of
example and without limitation, cigarettes and alcoholic
beverages) is present on Real Property presently occupied by CRC;
(L) Hazardous Materials Activities conducted
by CRC (A) have been conducted in compliance with applicable
Environmental Laws and (B) have not resulted in the exposure of
any person to a Hazardous Material in a manner which has or will
cause an adverse health effect to such person; provided, however,
that no representation or warranty is provided by the Key
Securityholders with respect to Section 3.1(af)(ii)(L)(B);
(M) no court order, action, proceeding,
liability or claim exists or is threatened, against any Disposal
Site or against CRC with respect to any transfer or release of
Hazardous Materials by CRC to a Disposal Site, and there is no
valid basis for such claim;
(N) There is not any fact or circumstance
which is reasonably expected to involve CRC in any environmental
litigation or impose upon CRC any environmental liability which
would have a material and adverse effect on the business
condition of CRC; and
(O) CRC has no records pertaining to
environmental audits or environmental assessments of any Real
Property.
(gg) Backlog. Schedule 3.1(ag) hereto sets forth as of
-------------------------------
a date not earlier than 10 days prior to the date hereof, the
backlog of orders that CRC is to ship and contract work to be
performed by CRC. CRC either possesses sufficient inventory of
parts, materials and personnel to produce the same within their
scheduled delivery dates or such parts or materials have lead
times such that, absent the occurrence of a force majeure event,
CRC can acquire such parts and materials in time to produce and
ship such backlog in accordance with its scheduled shipping date.
(hh) Accounts Receivable. The amount of all accounts
-------------------------
receivable of CRC will be good and collectible in full in the
ordinary course of business within 90 days of Closing; all
accounts receivable arise from bona fide transactions in the
ordinary course of business; no contest with respect to the
amount or validity of any amount is pending; and none of such
accounts receivable is or will on the Closing be subject to any
counterclaim, rights of return, refusals to pay or setoff except
to the extent of the allowance therefor recorded in accordance
with GAAP. The value at which accounts receivable are carried
reflect the accounts receivable valuation policy of CRC. As of
December 31, 1996 and as of the Closing, except as set forth in
Schedule 3.1(ah), there is and will be (i) no account debtor or
note debtor delinquent in its payment by more than 30 days, (ii)
no account debtor or note debtor that has refused (or threatened
to refuse) to pay its obligation for any reason, (iii) no account
debtor or note debtor that is insolvent or bankrupt and (iv) no
account receivable or note receivable which is pledged to any
third party by CRC, except as set forth on Schedule 3.1(ah). CRC
holds no deposits from customers and has received no prepaid
service contract revenue or other prepaid revenue.
(ii) Service Provider Agreements. No service provider
---------------------------------
of CRC is in violation of any term of any employment agreement
(whether written or verbal), patent or trademark disclosure
agreement, or any other contract or agreement relating to the
relationship of any such service provider with CRC or any other
party (including prior employers), or any term of any judgment,
decree or order, because of the nature of, and resulting in a
material adverse effect upon, the Business Condition or future
prospects of CRC. Except as set forth in Schedule 3.1(ai), each
current service provider of CRC has executed a proprietary
information and inventions agreement (or similar agreement) with
CRC in the form then being used by CRC, which forms have been pre
viously delivered to P-Com by CRC. No former service provider of
CRC has executed such an agreement but, CRC has the rights to any
and all Intellectual Property Rights developed by each such
person while providing services to CRC. Except as set forth on
Schedule 3.1(ai), each employee or consultant-inventor has
executed a written agreement validly assigning his or her rights
to CRC on all inventions, pending patent applications, all
patents issued, and all other intellectual property rights
developed by such service provider while working for or on behalf
of CRC to the extent that the failure to obtain such written
agreements is material to the Business Condition or future pros
pects of CRC. To the extent CRC has ever utilized consultants or
independent contractors, each consultant or independent
contractor has executed a written agreement, validly assigning to
CRC his or her rights in and to all copyrights and works of
authorship relating to products, services or technology designed,
developed, manufactured, licensed, sold, marketed or serviced by
CRC and its business to the extent that the failure to obtain
such written agreements is material to the Business Condition or
future prospects of CRC. None of CRC's service providers is in
violation thereof. None of CRC's service providers is obligated
under any contract (including licenses, covenants or commitments
of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would
interfere with the use of his or her best efforts to promote the
interests of CRC or that would materially conflict with CRC's
business as conducted or as proposed to be conducted or that
would prevent any such service provider from assigning inventions
to CRC. It is not now and CRC is not aware that it will be
necessary for CRC to utilize any inventions material to the Busi
ness Condition or future prospects of CRC of any of its service
providers (or people it currently intends to hire) made prior to
their employment by or relationship with CRC, that are material
to the Business Condition or future prospects of CRC.
(jj) Subsidiaries. CRC does not own or control,
------------------
directly or indirectly, any corporation, partnership, business,
trust or other entity.
(kk) Exports to Certain Countries. For the five years
----------------------------------
preceding the date hereof, CRC has made no sales to entities
located or residing or domiciled in, directly or indirectly,
Cuba, North Korea, Libya, Iraq, Iran or any other countries
prohibited by U.S. export control laws.
(ll) Foreign Corrupt Practices Act. None of the
-----------------------------------
activities or types of conduct below have been or may have been
engaged in by CRC, either directly or indirectly:
(i) Any bribes or kickbacks to government
officials or their relatives, or any other payments to such
persons, whether or not legal, to obtain or retain business or to
receive favorable treatment with regard to business; or
(ii) Any bribes or kickbacks to persons other
than government officials, or to relatives of such persons, or
any other payments to such persons or their relatives, whether or
not legal, to obtain or retain business or to receive favorable
treatment with regard to business; or
(iii) Any illegal contributions made to any
political party, political candidate or holder of governmental
office; or
(iv) Any bank accounts, funds or pools of
funds created or maintained without being reflected on the
corporate books of account, or as to which the receipts and
disbursements therefrom have not been reflected on such books; or
(v) Any receipts or disbursements, the
actual nature of which has been "disguised" or intentionally
misrecorded on the corporate books of account; or
(vi) Fees paid to consultants or commercial
agents which exceeded the reasonable value of the services
purported to have been rendered; or
(vii) Any payments or reimbursements made to
personnel of the Company for the purposes of enabling them to
expend time or to make contributions or payments of the kind or
for the purpose referred to in subparagraphs (i)-(vi) above. In
addition, CRC has not violated the United States Corrupt Foreign
Practices Act or any other similar laws, statute, rule or
regulation of any country.
(mm) Pooling of Interests. None of CRC nor any of its
--------------------------
subsidiaries and no other "affiliate" of CRC has taken or failed
to take, any action which would prevent CRC or P-Com from
accounting for the Merger for financial accounting and reporting
purposes as a pooling of interests in accordance with generally
accepted accounting principles and the pronouncements of the SEC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF P-COM AND SUB
IV.1 Representations and Warranties of P-Com and Sub.
-----------------------------------------------------
Except as set forth or referred to in any of P-Com's press
releases or filings with the Securities and Exchange Commission
or the National Association of Securities Dealers, Inc.
(collectively, the "SEC Reports and Releases"), copies of which
have been delivered or made available to CRC and the Key
Securityholders, or as set forth in a letter delivered to CRC and
the Key Securityholders, P-Com and Sub represent and warrant that
the representations and warranties set forth below shall be true
and correct as of the date hereof and as of the Closing.
As used in this Article IV only, "Business Condition"
with respect to P-Com shall refer to P-Com's and its
subsidiaries' collective financial or other condition, property,
results of operations and assets (taken as a whole) and its
business as presently conducted.
(a) Organization. Each of P-Com and Sub is a
------------------
corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware and has all
corporate power and authority to lease, own and operate its
properties and carry on its business and operations in the
jurisdictions where its business is now being conducted and to
directly own, lease and operate its business. To the knowledge
of P-Com and Sub, P-Com is duly qualified or licensed to do
business as a corporation and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business
or the ownership of its properties makes such qualification
necessary, except where the failure to qualify would not have a
material adverse effect on its Business Condition. Each of P-Com
and Sub has made available to CRC complete and accurate copies of
its Certificate of Incorporation and Bylaws and all amendments
thereto, and minutes and actions of all of its Board of Directors
and its securityholders. No corporate actions have been approved
or taken by P-Com's or Sub's Board of Directors or
securityholders that are not reflected in such minutes and
actions.
(b) Brokers' and Finders' Fees/Contractual Limitations.
--------------------------------------------------------
Neither P-Com nor Sub is obligated to pay any fees
or expenses of any broker or finder in connection with the
origin, negotiation, or execution of this Agreement, the Related
Agreements, or in connection with any transactions contemplated
hereby that either would be required or obligated to make or pay.
To the knowledge of P-Com and Sub, Neither P-Com, Sub nor any
officer, director, employee, agent or representative of P-Com or
Sub (collectively, "P-Com's Representatives") is or has been
subject to any agreement, letter of intent or understanding of
any kind which prohibits, limits or restricts P-Com, Sub or P-
Com's Representatives from negotiating, entering into and
consummating this Agreement, the Escrow Agreement and the
transactions contemplated hereby and thereby.
(c) Capital Structure.
-----------------------
(i) The authorized capital stock of P-Com
consists of 2,000,000 shares of preferred stock, none of which
are outstanding, and 30,000,000 shares of P-Com Common Stock,
19,852,911 of which were outstanding as of March 11, 1997. As of
such date there were 1,858,192 shares or P-Com Common Stock
reserved for issuance upon the exercise of all outstanding
options, warrants, contracts or other rights to purchase, or
shares convertible into, P-Com Common Stock.
(ii) the authorized capital stock of Sub
consists of 10,000 shares of Common Stock, par value $.0001 per
share of which 10,000 are outstanding. There are no outstanding
rights, warrants or options to purchase capital stock of Sub.
(iii) P-Com is not a party or subject to any
agreement or understanding, and to P-Com's knowledge there is no
agreement or understanding between or among any persons that
affects or relates to the voting or giving of written consent
with respect to any outstanding security of P-Com.
(iv) all outstanding shares of capital stock of
each of P-Com and Sub are, and the shares of P-Com Common Stock,
when issued and delivered to the Securityholders of CRC in
accordance with the terms of the Merger will be, duly and validly
authorized, validly issued, fully paid and nonassessable, and
based on representations of the CRC Securityholders, issued in
compliance with all applicable federal and state securities laws
and not issued in violation of any preemptive rights set forth in
any statute or written agreement of P-Com.
(d) Authorization of P-Com and Sub. Each of P-Com and
------------------------------------
Sub has the corporate power and authority to enter into this
Agreement and the Related Agreements, to perform its respective
obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Related Agreements by P-Com
and Sub, the performance by each of P-Com and Sub of their
respective obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by their respective Boards
of Directors and P-Com, as the sole stockholder of common stock
of Sub. Each of P-Com and Sub has taken all necessary corporate
action with respect to the execution and delivery of this
Agreement and the Related Agreements. Each of this Agreement and
the Related Agreements constitutes legal, valid and binding
obligations of each of P-Com and Sub, enforceable in accordance
with their respective terms, except as limited by applicable
bankruptcy, insolvency, moratorium, reorganization or other laws
affecting creditors' rights and remedies generally.
(e) Conflicts. To the knowledge of P-Com and Sub, the
---------------
execution and delivery by P-Com and Sub of this Agreement and the
Related Agreements do not and, subject to satisfaction of the
conditions set forth in Article VI hereto, the performance and
consummation of the transactions contemplated hereby and thereby
will not, conflict with or result in any conflict with, breach or
violation of any material statute, law, rule, regulation,
judgment, order, decree or ordinance applicable to P-Com or Sub,
or their properties or assets, or conflict with or result in any
conflict with, breach or violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to
a right of termination, cancellation, forfeiture or acceleration
of any obligation or the loss of a benefit under, or result in
the creation of a lien or encumbrance on any of the properties or
assets of each of P-Com and Sub pursuant to (i) any provision of
the Certificate of Incorporation or Bylaws of each of P-Com and
Sub or (ii) any material agreement, contract, note, mortgage,
indenture, lease, instrument, permit, concession, franchise or
license to which either P-Com or Sub is a party or by which P-Com
or Sub or any of its respective property or assets may be bound
or affected.
(f) Consents. To the knowledge of P-Com and Sub, no
--------------
consent, approval, order or authorization of, or registration,
declaration of, or qualification or filing with, a Governmental
Entity, is required by or with respect to each of P-Com or Sub in
connection with the execution and delivery of this Agreement and
the Related Agreements by P-Com or Sub or the consummation of
each of P-Com and Sub of the transactions contemplated hereby or
thereby, except for (i) the filing of the Agreement of Merger
pursuant to Section 251(c) of the DCL and appropriate documents
with the relevant authorities of other states in which CRC is
qualified to do business, or (ii) such consents, approvals,
authorizations, registrations or qualifications as may be
required under federal or state securities or Blue Sky laws in
connection with the Merger.
(g) SEC Reports. P-Com has furnished or will furnish
-----------------
to CRC for inclusion in the proxy statement for the special
meeting of stockholders of CRC to approve the Merger, (a) copies
of P-Com's 1996 Annual Report on Form 10-K, as filed with the
SEC, which includes its consolidated balance sheets as at
December 31, 1996 and December 31, 1995, and its consolidated
statements of income, changes in financial position and
stockholders' equity for the years ended 1996, 1995 and 1994,
with appended notes thereto, certified by Price Waterhouse LLP,
independent public accountants ("10-K"), (b) the proxy statement
of P-Com in connection with its annual meeting of stockholders to
be held on May 20, 1996, (c) P-Com's Form 8-Ks covering its
acquisition of Technosystem S.p.A. and Columbia Spectrum
Management, L.P., and (d) the registration statement on Form S-3
declared effective by the SEC on May 16, 1996. The financial
statements included in the 10-K fairly present the financial
condition of P-Com as of the dates indicated and the results of
its operations for the periods therein indicated and were
prepared in accordance with generally accepted accounting
principles consistently applied. There has not been any material
adverse change in the business, properties, results of operations
or financial condition of P-Com since December 31, 1996.
(h) Litigation. Except as set forth in the SEC
----------------
Reports and Releases, to the knowledge of P-Com and Sub, there
are no actions, suits, investigations, arbitrations or other
similar proceedings pending or, to the best of each of P-Com's
and Sub's knowledge, threatened against or involving P-Com or any
of its subsidiaries or any of its or their assets, which, if
determined adversely to P-Com, would have a material adverse
effect on the Business Condition of P-Com. Except as set forth
in the SEC Reports and Releases, there are no orders, judgments,
injunctions or decrees of any court or governmental agency with
respect to which P-Com or any of its stockholders, directors or
officers (in such capacity) have been named or are parties, or to
which any of their assets are subject that would result in a
material adverse change in the Business Condition of P-Com.
(i) SEC Reports and Financial Statements. P-Com has
------------------------------------------
filed, in a timely manner, with the SEC all filings,
registrations, reports and proxy statements that it has been
required to file pursuant to the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
P-Com has furnished or made available to CRC complete copies of
all of the SEC Reports and Releases. As of their respective
filing dates or release dates, the SEC Reports (i) were prepared
in all material respects in accordance with the requirements of
the Securities Act, the Exchange Act, and the respective rules
and regulations thereunder and (ii) did not contain any untrue
statement of a material fact or did not omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except
to the extent corrected by a document subsequently filed with the
SEC or publicly disseminated.
(j) No Violations or Defaults. P-Com nor Sub is in
-------------------------------
violation of its respective Certificates of Incorporation or
Bylaws.
(k) Pooling of Interest. None of P-Com's or any of
-------------------------
its subsidiaries has, and no other "affiliate" of P-Com or Sub
has, taken or failed to take any action which would prevent P-Com
from accounting for the Merger for financial accounting and
reporting purposes as a pooling of interests in accordance with
generally accepted accounting principles and the pronouncements
of the SEC.
(l) Tax Matters. To the knowledge of P-Com and Sub,
-----------------
each of P-Com and Sub has filed all Federal, state and local
income tax returns required to be filed and all state and local
sales tax returns which each of them believes to be required
where failure to file would be material to the Business Condition
of P-Com, and all taxes shown by such returns to be due and
payable have been paid. All such returns are true and correct in
all material respects. The accruals for taxes reflected on the
Form 10-K for December 31, 1996 were determined in accordance
with generally accepted accounting principles to account for all
Federal, state or local tax liabilities due or which will become
due for any period commencing prior to January 1, 1997.
ARTICLE V
CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE
TIME; ADDITIONAL AGREEMENTS AND COVENANTS
V.1 Conduct of Business of CRC. During the period from the
--------------------------------
date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time of the
Merger, CRC shall carry on its business in the usual, regular and
ordinary course in substantially the same manner as conducted
prior to the date of this Agreement and, to the extent consistent
with such business, use reasonable efforts to preserve intact its
present business organizations, keep available the services of
its present service providers, and preserve its relationships
with customers, suppliers, distributors, licensors, licensees and
others having business dealings with it, to the end that its
goodwill and ongoing businesses shall be unimpaired at the
Effective Time of the Merger. CRC shall promptly notify P-Com of
any event or occurrence not in the ordinary course of business of
CRC and any event which could have a material and adverse effect
on the Business Condition of CRC. Except as expressly
contemplated by this Agreement, CRC, without the prior written
consent of P-Com or Sub (which consent shall not be unreasonably
withheld), shall not:
(a) Accelerate, amend or change the period of
exercisability of options, warrants, stock or purchase rights or
authorize cash payments in exchange therefor or perform any
actions that would prohibit the pooling of interests accounting
treatment;
(b) (i) Enter into any commitment or transaction not
in the ordinary course of business to be performed over a period
longer than six (6) months in duration, or, except as in
accordance with its existing capital budget previously disclosed
to P-Com, to purchase fixed assets with an aggregate purchase
price exceeding $50,000;
(c) Grant any severance or termination pay to any
service provider;
(d) Transfer to any person or entity any rights to the
CRC Intellectual Property Rights, except licenses of Intellectual
Property Rights in connection with the sale of CRC products in
the ordinary course of business consistent with past practice;
(e) Enter into or amend any agreements pursuant to
which any other party is granted marketing or other similar
rights of any type or scope with respect to any products of CRC;
(f) Except in the ordinary course of business with
prior notice to P-Com, violate, amend or otherwise modify the
terms of any material contract;
(g) Except with prior consultation with P-Com,
commence a lawsuit other than for the routine collection of
bills;
(h) Declare or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of
any CRC common stock, or split, combine or reclassify any of its
common stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for
shares of CRC common stock, or repurchase or otherwise acquire,
directly or indirectly, any shares of CRC common stock except
repurchases of Common Stock at cost from former service providers
in accordance with the terms of agreements providing for the
repurchase of shares in connection with any termination of
service to CRC;
(i) Issue, deliver or sell or authorize or propose the
issuance, delivery or sale of, or authorization of, the purchase
of any shares of CRC capital stock or securities convertible
into, or subscriptions, rights, warrants or options to acquire,
or other agreements or commitments of any character obligating it
to issue any such shares or other convertible securities, other
than the issuance of shares of CRC Common Stock upon the exercise
of CRC Options;
(j) Cause or permit any amendments to CRC's
Certificate of Incorporation or Bylaws;
(k) Acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any
corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree
to acquire any assets which are material, individually or in the
aggregate, to the Business Condition of CRC;
(l) Sell, lease, license or otherwise dispose of any
of its properties or assets except in the ordinary course of
business;
(m) Incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt
securities or guarantee any debt securities of others, except for
borrowings by and among P-Com and CRC, borrowings not to exceed
$1,500,000 under existing credit agreements of CRC, and failing a
loan by P-Com, borrowings from a third party, provided that such
loan or loans are not senior in priority or preference to the
existing indebtedness to P-Com, are at market rates, the proceeds
therefrom are used solely for working capital purposes by CRC at
any time and the total outstanding indebtedness of CRC does not
exceed $4,000,000;
(n) Adopt or amend any Plan, or enter into any
employment contract, pay any special bonus or special
remuneration to any service provider, or increase the salaries or
wage rates of its employees other than pursuant to scheduled
employee reviews under CRC's normal employee review cycle or
pursuant to CRC's existing bonus plans, as the case may be, or in
connection with the hiring of employees other than officers in
the ordinary course of business, in all cases consistent with
past practice, or otherwise increase or modify the compensation
or benefits payable or to become payable by CRC to any of its
service providers, except for changes pursuant to employment
agreements in effect as of the date hereof or changes in
position;
(o) Revalue any of its assets, including, without
limitation, writing down the value of inventory or accounts
receivable;
(p) Pay, discharge or satisfy in an amount in excess
of $25,000 in any one case any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business consistent with past practice of
liabilities reflected or reserved against in CRC's Financial
Statements or incurred subsequent to September 30, 1996 in the
ordinary course of business;
(q) Make any material Tax election other than in the
ordinary course of business and consistent with past practice,
change any material tax election, adopt any material Tax
accounting method other than in the ordinary course of business
and consistent with past practice, change any material Tax
accounting method, file any material Tax return (other than any
estimated tax returns, payroll tax returns or sales tax returns)
or any amendment to a material Tax return, enter into any closing
agreement, settle any Tax claim or assessment or consent to any
Tax claim or assessment;
(r) Engage in any activities or transactions that are
outside the ordinary course of its business consistent with past
practice;
(s) Fail to pay or otherwise satisfy its material
monetary obligations as they become due or consistent with past
practice, except such as are being contested in good faith;
(t) Waive or commit to waive any rights of substantial
value;
(u) Cancel, amend or, other than in the ordinary
course upon expiration of a policy term, renew any material
insurance policy;
(v) Alter, or enter into any commitment to materially
alter, its interest in any corporation, association, joint
venture, partnership or business entity in which CRC directly or
indirectly holds any interest on the date hereof; or
(w) Take, or agree (in writing or otherwise) to take,
any of the actions described in this Section 5.1 or any action
which would make any of the representations or warranties or
covenants of CRC and the Key Securityholders, contained in this
Agreement materially untrue or incorrect.
V.2 Access to Information; Provision of Interim
------------------------------------------------
Financial Statements.
---------------------
(a) CRC shall afford P-Com and its accountants,
counsel and other representatives, reasonable access during
normal business hours during the period from the date of this
Agreement until the earlier of the Effective Time of the Merger
or the termination of this Agreement to (i) all properties,
books, contracts, commitments and records and (ii) all other
information concerning the business, properties and personnel of
CRC as may reasonably be requested, provided that any information
furnished pursuant hereto or any investigation by each party
hereto shall not affect such party's right to rely on the
representations, warranties, agreements and covenants made by the
other parties herein. CRC shall cause CRC's accountants to
cooperate with P-Com in auditing the financial statements of
CRC's business, including but not limited to, executing any and
all representation or other letters or agreements reasonably
required by P-Com's accountants. CRC shall cause CRC's
accountants to consent in writing or agree to consent in writing
on a timely basis to the inclusion of CRC's financial statements
in any registration statement or in any report to be filed with
the SEC by P-Com.
(b) CRC shall provide P-Com with an internally
prepared unaudited monthly balance sheet, income statement and
statement of cash flows within twenty-five (25) days of each
month-end prior to the Effective Time of the Merger as well as
copies of such other internal financial statements as may be
reasonably requested by P-Com. Such financial statements shall
constitute "CRC Financial Statements" for all purposes of this
Agreement except for the absence of footnotes and provided
further that the parties agree that no physical inventory
evaluation shall be required in preparing such statements.
(c) CRC shall provide P-Com with all information
necessary for the preparation of any documents or filings
prepared by P-Com to be filed with the SEC and any applicable
state securities or blue sky commissions.
(d) Each party shall use its respective best efforts
to not take any actions that would hinder P-Com from being able
to account for the Merger on a pooling of interests basis.
V.3 Debts and Obligations. CRC has paid, or will pay, all
---------------------------
debts and performed or will perform all material obligations
required as of the Effective Date of the Merger under the terms
of all Contracts.
V.4 CRC Securityholders' Consent. CRC shall solicit the
----------------------------------
vote of its Securityholders as promptly as practicable after the
date hereof for the purpose of obtaining the Securityholders'
approval required in connection with the transactions
contemplated hereby and shall use its reasonable efforts to
obtain such approval.
V.5 Exclusivity; Acquisition Proposals. Until the earlier
----------------------------------------
of (i) the Effective Time of the Merger or (ii) the termination
of this Agreement:
(a) CRC shall not knowingly, and shall not knowingly
cause or permit, directly or indirectly, through any officer,
director, agent or representative (including, without limitation,
investment bankers, attorneys, accountants and consultants), or
otherwise:
(i) solicit, initiate or further the
submission of proposals or offers from, or enter into any
agreement with, any firm, corporation, partnership, association,
group (as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or other person or
entity, individually or collectively (including, without
limitation, any managers or other employees of CRC or any
affiliates), other than P-Com and Sub (a "Third Party"), relating
to any acquisition or purchase of all or any substantial portion
of the assets of, or any equity interest in, CRC or any merger,
consolidation or business combination with CRC;
(ii) participate in any discussions or
negotiations regarding, or furnish to any Third Party any
confidential information with respect to CRC or P-Com in
connection with any acquisition or purchase of all or any
substantial portion of the assets of, or any equity interest in,
CRC or any merger, consolidation or business combination with
CRC; or
(iii) Otherwise knowingly to cooperate in
any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any Third Party to undertake
or seek to undertake any acquisition or purchase of all or any
substantial portion of the assets of, or any equity interest in,
CRC or any merger, consolidation or business combination with
CRC.
(b)In the event CRC receives prior to termination of
this Agreement any offer or indication of interest from any Third
Party relating to any acquisition or purchase of all or any
substantial portion of the assets of, or any equity interest in,
CRC or any merger, consolidation or business combination with
CRC, CRC shall promptly notify P-Com and Sub in writing, and
shall in any such notice, set forth in reasonable detail the
identity of the Third Party, the terms and conditions of any
proposal and any other information requested of it by the Third
Party or in connection therewith.
(c)CRC shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations
with any Third Party conducted prior to the date of this
Agreement with respect to any of the foregoing.
V.6 Breach of Representations, Warranties, Agreements and
----------------------------------------------------------
Covenants. Each of P-Com, Sub, CRC and the Key Securityholders
----------
shall not take, or fail to take, any reasonable action which from
the date hereof through the Effective Time of the Merger would
cause or constitute a breach of any of its respective
representations, warranties, agreements and covenants set forth
in this Agreement. In the event of, and promptly after becoming
aware of, the actual, pending or threatened occurrence of any
event which would cause or constitute such a breach or
inaccuracy, P-Com, Sub or CRC, as applicable, shall give detailed
written notice thereof to the other parties and shall use its
reasonable efforts to prevent or promptly remedy such breach or
inaccuracy.
V.7 Consents. Each of P-Com and CRC shall promptly apply
--------------
for or otherwise seek, and use its reasonable efforts to obtain,
all consents and approvals required to be obtained by it for the
consummation of the Merger, and CRC shall use its reasonable
efforts to obtain all necessary consents, waivers and approvals
under any of CRC's agreements, contracts, licenses or leases in
connection with the Merger, except such consents and approvals as
P-Com and CRC agree CRC shall not seek to obtain.
V.8 HSR Act Filings. If applicable, each of P-Com and CRC
---------------------
shall promptly make its respective filings under the HSR Act, and
thereafter shall make any required submissions under the HSR Act
with respect to the Merger, and shall cooperate with each other
with respect to the foregoing. CRC and P-Com shall give each
other prior notice and consult with each other prior to any
meeting with the United States Federal Trade Commission or
Department of Justice with respect to their respective filings
under the HSR Act or any review by either of the foregoing
agencies. Each of P-Com and CRC shall take all reasonable
actions necessary to cause the expiration of the waiting periods
under the HSR Act as promptly as possible.
V.9 Reasonable Efforts. If applicable, each of P-Com and
------------------------
CRC shall use reasonable efforts to effectuate the transactions
contemplated hereby and to fulfill and cause to be fulfilled the
conditions to closing under this Agreement.
V.10 Legal Conditions to the Merger.
------------------------------------
(a) CRC shall take, and shall cause to be taken, all
reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on CRC with respect to the
Merger and will promptly cooperate with and furnish information
to P-Com in connection with any such requirements imposed upon P-
Com or Sub in connection with the Merger. CRC shall take, and
shall cause to take, all reasonable actions to obtain (and to co
operate with P-Com and Sub in obtaining) any consent,
authorization, order or approval of, or any exemption by, any
Governmental Entity required to be obtained or made by CRC (or by
P-Com or Sub) in connection with the Merger or the taking of any
action contemplated thereby or by this Agreement, and to defend
such lawsuits or other legal proceedings challenging this
Agreement or the consummation of the transactions contemplated
hereby as CRC deems advisable in good faith, to lift or rescind
any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the
transactions contemplated hereby as CRC deems advisable in good
faith, and to effect all necessary registrations and filings and
submissions of information as CRC deems advisable in good faith
required by any Governmental Entity, and to fulfill all
conditions to this Agreement.
(b) Each of P-Com and Sub shall take all reasonable
actions necessary to comply promptly with all legal requirements
which may be imposed on them with respect to the Merger and will
promptly cooperate with and furnish information to CRC in
connection with any such requirement imposed upon CRC or any
subsidiary of CRC in connection with the Merger. P-Com and Sub
shall take all reasonable actions to obtain (and to cooperate
with CRC in obtaining) any consent, authorization, order or
approval of, or exemption by, any Governmental Entity required to
be obtained or made by P-Com or Sub (or by CRC or any of its
subsidiaries) in connection with the Merger or the taking of any
action contemplated thereby or by this Agreement, and to defend
such lawsuits or other legal proceedings challenging this
Agreement or the consummation of the transactions contemplated
hereby as P-Com and Sub deem advisable in good faith, to lift or
rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the
transactions contemplated hereby as P-Com and Sub deem advisable
in good faith, and to effect all necessary registrations and
filings and submissions of information as P-Com and Sub deem
advisable in good faith, required by any Governmental Entity, and
to fulfill all conditions to this Agreement.
V.11 Public Announcements. P-Com and CRC will make joint
--------------------------
announcements to employees and the public after the execution of
this Agreement. Each party will consult in advance with the
other concerning the timing and content of any announcements,
press releases or public statements concerning the Merger and
will not make any such announcement, release or statement without
the other's consent; provided, however, that P-Com may make any
public statement concerning the Merger without CRC's consent,
after it has used reasonable efforts to obtain CRC's consent if,
in the opinion of counsel for P-Com, such statement or
announcement is required or advisable to comply with applicable
law.
V.12 Securityholder Agreements. CRC shall obtain written
-------------------------------
statements from each of its Securityholders ("Securityholder
Agreements") substantially in the form of Exhibit 5.12 hereto.
V.13 Expenses. P-Com and Sub shall bear their own costs and
--------------
expenses incurred in connection with this Agreement and the
Related Agreements and the transactions contemplated hereby and
thereby (including fees of any finders or brokers or investment
bankers, attorneys and accountants retained by P-Com and Sub) and
the Securityholders shall bear their own and CRC's costs and
expenses accrued in connection with this Agreement and the
Related Agreements and the transactions contemplated hereby and
thereby (including fees of any finders or brokers or investment
bankers, attorneys and accountants retained by the
Securityholders and CRC); provided, however, that,
notwithstanding anything in this Agreement or in any of CRC's
Financial Statements or in any exhibit or certificate, P-Com and
CRC and its subsidiaries shall pay (i) all legal fees and
expenses accrued by CRC and the Securityholders for the period
from January 1, 1997 to the Closing (whether or not related to
the Merger and the transactions contemplated by this Agreement
and the Related Agreements) not to exceed $65,000 in the aggre
gate and (ii) all accounting fees and expenses accrued by CRC and
the Securityholders for the period from January 1, 1997 to the
Closing (whether or not related to the Merger and the
transactions contemplated by this Agreement and the Related
Agreements) not to exceed $20,000 in the aggregate.
V.14 Information to be Supplied. Each of CRC and the Key
--------------------------------
Securityholders covenants and agrees that any solicitation
materials relating to the Merger (other than the SEC Reports and
other material furnished by P-Com in writing specifically for
inclusion therein) shall not contain any untrue statement of
material fact and shall not omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made,
not misleading.
V.15 Registration Rights. P-Com hereby agrees to grant to
-------------------------
the holders of P-Com Common Stock and Assumed Options issued
pursuant to the Merger registration rights as set forth in the
Registration Rights Agreement attached hereto as Exhibit 2.1(e)
(the "Registration Rights Agreement").
V.16 Pooling of Interests Transaction. P-Com and CRC shall
--------------------------------------
use their reasonable best efforts to cause P-Com's accounting
firm, Price Waterhouse LLP, and CRC's accounting firm, KMPG Peat
Marwick LLP, to deliver to P-Com upon the execution of this
Agreement, an opinion, as to the respective firms' concurrence
with the respective companies' management regarding the
appropriateness of pooling of interests accounting for the merger
under the Accounting Principles Board opinion No. 16 were the
Merger to close as of the date hereof and as of the Closing.
V.17 NASDAQ Qualification. P-Com covenants and agrees to
--------------------------
take all reasonable action (including the payment of listing
fees) to cause the shares of P-Com Common Stock to be issued upon
the Merger to be listed for trading on the National Association
of Securities Dealers Automated Quotation System National Market
(the "Nasdaq NMS").
V.18 No Further Exports To Certain Countries. CRC agrees
---------------------------------------------
that from and after the date hereof CRC shall not enter into any
new contracts for the supply of products to entities located,
domiciled or residing in, directly or indirectly, Libya, Iraq,
Iran, Cuba, North Korea or any other countries prohibited by U.S.
export control laws.
V.19 Indemnification Provisions. P-Com covenants and agrees
--------------------------------
that it shall take no action, directly or indirectly, to amend
the current Certificate of Incorporation or Bylaws of CRC in any
manner that would reduce or eliminate the indemnification
provisions provided therein to the directors and officers of CRC
for actions occurring prior to the Closing. Notwithstanding any
provision of this Agreement or any statute of limitation to the
contrary, the provisions of this Section 5.19 shall survive the
Closing.
V.20 The Existing Credit Agreement of CRC. P-Com covenants
------------------------------------------
and agrees that it shall upon the closing either (i) pay off any
amounts owing in compliance with the terms of this Agreement
under the existing credit agreement of CRC, or (ii) assume the
guarantee of Xx. X'Xxxx relating to such existing credit
agreement in a manner that fully discharges the obligations of
Xx. X'Xxxx thereunder.
ARTICLE VI
CONDITIONS PRECEDENT
VI.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 prior to the Closing
of the following conditions:
(a) Approvals. All authorizations, consents, orders
---------------
or approvals of, or declarations or filings with, or expiration
of waiting periods imposed by, any Governmental Entity necessary
for the consummation of the transactions contemplated by this
Agreement shall have been filed, occurred or been obtained.
(b) Legal Action. No temporary restraining order,
------------------
preliminary injunction, or permanent injunction or other order
preventing the consummation of the Merger shall have been issued
by any Governmental Entity and remain in effect, and no
litigation shall be pending the ultimate resolution of which is
likely (i) in P-Com's opinion to result in the issuance of such
an order or injunction, or the imposition against CRC or P-Com of
substantial damages if the Merger is consummated or (ii) in the
opinion of P-Com or CRC to render P-Com, Sub or CRC unable to
consummate the Merger. In the event any such order or injunction
shall have been issued, each party agrees to use its reasonable
efforts to have any such injunction lifted.
(c) Statutes. No action shall have been taken, and no
--------------
statute, rule, regulation or order shall have been enacted,
promulgated, or issued or deemed applicable to the Merger by any
Governmental Entity which would (i) make the consummation of the
Merger illegal or (ii) render P-Com, Sub or CRC unable to
consummate the Merger, except for any waiting period provisions.
(d) Escrow Agreement. The Escrow Agreement shall be
----------------------
executed by all appropriate parties.
(e) Tax Free Reorganization. P-Com, CRC and the board
-----------------------------
of directors of CRC shall have received an opinion from KMPG Peat
Marwick LLP, in form and substance satisfactory to the addresses
thereof, to the effect that the Merger constitutes a
reorganization within the meaning of Section 368(a) of the Code
and that the shareholders of CRC shall not realize any gain or
loss by reason of the Merger.
VI.2 Conditions of Obligations of P-Com and Sub. The
------------------------------------------------
obligations of P-Com and Sub to effect the Merger are also
subject to the satisfaction of the following conditions, unless
waived by P-Com and Sub:
(a) Representations and Warranties. The
------------------------------------
representations and warranties of CRC and the Key Securityholders
set forth in this Agreement shall be true and correct as of the
date of the Closing based upon an updated Disclosure Letter as of
the Closing Date, if necessary, reasonably acceptable to P-Com,
which letter shall reflect changes in such representations and
warranties arising (but shall not include any changes reflecting
matters that could or should have been reflected in the
Disclosure Letter as of the date of this Agreement) from the
operation of the business of CRC in the ordinary course of
business after the date of this Agreement but prior to the
Closing Date in compliance with the terms of this Agreement;
provided further that CRC and the Key Securityholders provide
such Disclosure Letter to P-Com and its counsel at least seven
(7) days prior to the Closing.
(b) No Material Adverse Change. There shall have been
--------------------------------
no material adverse change in the Business Condition (either
actual or as such condition has been represented pursuant to
Article III hereof) of CRC taken as a whole on or before the
Closing, and P-Com shall have received a certificate signed by
the chief executive officer, chief operating officer and the
comptroller of CRC to such effect.
(c) Performance of Obligations of CRC. CRC and the
---------------------------------------
Key Securityholders shall have performed all obligations and
covenants required to be performed by them under this Agreement
prior to the Closing Date, and P-Com shall have received a
certificate signed by the chief executive officer, chief
operating officer and the comptroller of CRC to such effect.
(d) Securityholder Agreements. P-Com shall have
-------------------------------
received from each Securityholder a Securityholder Agreement
substantially in the form attached hereto as Exhibit 5.12.
(e) Opinion of Counsel to CRC and Securityholders. P-
---------------------------------------------------
Com shall have received an opinion dated the Closing Date of
Cadwalader, Xxxxxxxxxx & Xxxx, counsel to CRC and the
Securityholders, in a form mutually agreed to by the parties
hereto.
(f) FIRPTA. P-Com shall have received a properly
------------
executed Foreign Investment and Real Property Tax Act of 1980
("FIRPTA") Notification Letter, in form and substance
satisfactory to P-Com, which states that shares of capital stock
of CRC do not constitute "United States real property interests"
under Section 897(c) of the Code, for purposes of satisfying P-
Com's obligations under Treasury Regulation
Section 1.1445-2(c)(3).
(g) Securityholder Approval. This Agreement and the
-----------------------------
Agreement of Merger shall have been approved and adopted by the
affirmative vote of the holders of at least a majority of the
then outstanding shares of CRC's Common Stock and the holders of
not more than 9.9% of the CRC Common Stock shall have exercised
their appraisal rights pursuant to Section 262 of the Delaware
General Corporation Law.
(h) Consents. P-Com shall have received duly executed
--------------
copies of all third-party consents and approvals contemplated by
this Agreement or the CRC Schedules in form and substance
reasonably satisfactory to P-Com.
(i) Pooling of Interests Transaction. P-Com shall
--------------------------------------
have received opinions from Price Waterhouse, LLP and CRC's
accountants as to the respective firms' concurrence with the
respective companies' management regarding the appropriateness of
pooling of interests accounting for the merger under the
Accounting Principles Board opinion No. 16.
(j) Proprietary Agreements. All CRC service providers
----------------------------
as of the Closing Date shall have entered into P-Com's standard
proprietary information and inventions agreement in the form
attached hereto as Exhibit 6.2(j).
(k) Management Certificates. P-Com shall have
-----------------------------
received certificates (in the form attached hereto as Exhibit
6.2(k)(1)) from the individuals listed on the attached Exhibit
6.2(k)(2) in their role as officer and/or key employee of CRC
with respect to the representations and warranties of CRC set
forth in Article III hereof.
VI.3 Conditions of Obligation of CRC. The obligation of CRC
-------------------------------------
to effect the Merger is also subject to the satisfaction of the
following conditions unless waived by CRC:
(a) Representations and Warranties. The
representations and warranties of P-Com and Sub set forth in this
Agreement shall be true and correct in all material respects as
of the Closing Date.
(b) No Material Adverse Change. There shall have
--------------------------------
been, in the reasonable opinion of CRC and the Key
Securityholders, no material adverse change in the financial
condition or results of operations of P-Com and its subsidiaries
taken as a whole (but not including a change in the value of P-
Com's Common Stock as quoted on the Nasdaq NMS or as a result of
any acquisition by P-Com of another business) on or before the
Closing, and CRC and its Board of Directors shall have received a
certificate signed by the Chief Executive Officer and Chief
Financial Officer of P-Com to such effect.
(c) Performance of Obligations of P-Com and Sub. P-
-------------------------------------------------
Com and Sub shall have performed all obligations and covenants
required to be performed by them under this Agreement and the
Agreement of Merger prior to the Closing Date, and CRC and its
board of directors shall have received a certificate signed by
the chief executive officer and the chief financial officer of P-
Com to such effect.
(d) Opinion of Counsel to P-Com. CRC shall have
---------------------------------
received an opinion dated the Closing Date of Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, counsel to P-Com, in a form mutually agreed to by
the parties hereto.
(e) Evidence of Nasdaq NMS Listing. CRC shall have
------------------------------------
received evidence reasonable satisfactory to them that the shares
of P-Com Common Stock to be issued in the Merger have been listed
for trading on the Nasdaq NMS.
(f) Employment Arrangements. P-Com shall have
-----------------------------
delivered employment agreements or offer letters to all key
employees of CRC designated by P-Com and CRC prior to or on the
Closing Date.
(g) Registration Rights Agreement. Each CRC
-----------------------------------
Securityholder shall have received a copy of the Registration
Rights Agreement executed by P-Com.
ARTICLE VII
INDEMNITY
VII.1 Survival of Representations, Warranties, Covenants
------------------------------------------------------------
and Agreements.
---------------
(a) Notwithstanding any investigation conducted at any
time with regard thereto by or on behalf of any party to this
Agreement, all representations, warranties, covenants, and
agreements of CRC and the Securityholders, and P-Com and its Sub
shall survive the execution, delivery and performance of this
Agreement in accordance with Section 7.4 of this Agreement. No
investigation made by or on behalf of P-Com or Sub with respect
to CRC and the Key Securityholders shall be deemed to affect P-
Com's or Sub's reliance on the representations, warranties,
covenants and agreements made by CRC and the Key Securityholders
contained in this Agreement and shall not be a waiver of P-Com's
or Sub's rights to indemnity as herein provided for the breach or
inaccuracy of, or failure to perform or comply with, any of CRC's
or the Securityholders' representations, warranties, covenants or
agreements under this Agreement or the Escrow Agreement. No
investigation made by or on behalf of CRC or the Key
Securityholders with respect to P-Com or Sub shall be deemed to
affect CRC's or the Key Securityholders' reliance on the
representations, warranties, covenants and agreements made by P-
Com or Sub contained in this Agreement and shall not be a waiver
of CRC's or the Key Securityholder's rights to indemnity as
herein provided for the breach or inaccuracy of, or failure to
perform or comply with, any of P-Com's or Sub's representations,
warranties, covenants or agreements under this Agreement or the
Escrow Agreement. All representations and warranties of each
party set forth in this Agreement shall be deemed to have been
made again by such party at and as of the Closing. No
performance or execution of this Agreement in whole or in part by
any party hereto, no course of dealing between or among the
parties hereto or any delay or failure on the part of any party
in exercising any rights hereunder or at law or in equity, and no
investigation by any party hereto shall operate as a waiver of
any rights of such party.
(b) As used in this Article VII, any reference to a
representation, warranty, agreement or covenant contained in any
section of this Agreement shall not give effect to any of the
disclosures or qualifications set forth (either as of the date
hereof or as of the Closing) in any accompanying schedule,
exhibit, certificate or the Disclosure Letter.
(c) Nothing in this Agreement shall be construed as
limiting in any way the remedies that may be available to a party
in the event of fraud relating to the representations,
warranties, agreements or covenants made by any other party in
this Agreement.
(d) The Securityholders and P-Com and Sub shall have
liabilities and obligations for Damages (as defined herein) under
this Article VII only with respect to claims submitted or notice
of claims provided during the time period of survivability of the
specific representation, warranty, covenant or agreement as set
forth herein. Notwithstanding the expiration date of the
representations, warranties, covenants and agreements set forth
herein, if P-Com or CRC shall notify the Securityholders or if
the Securityholders shall notify P-Com or Sub with respect to the
submission of a claim during the time period of survivability of
such representation, warranty, covenant or agreement in
conformity with the terms of the Escrow Agreement, each party's
liability or obligation for Damages shall continue in full force
and effect until those claims timely made are finally settled.
VII.2 Indemnification; Escrow Deposit of P-Com Common Stock.
----------------------------------------------------------------
(a) Assuming there are no specified liabilities
identified during the due diligence process, each of the
Securityholders (regardless of the party making the
representation, warranty, covenant or agreement) shall, to the
extent of the Escrow Shares, indemnify, reimburse, defend and
hold harmless P-Com, CRC and Sub and each of their respective
affiliates (other than the Securityholders) against any and all
losses, liabilities, damages, demands, claims, suits, actions,
judgments, and causes of action, assessments, costs, and
expenses, including, without limitation, interest, penalties,
attorneys' fees, any and all expenses incurred in investigating,
preparing, and defending against any litigation, commenced or
threatened, and any claim whatsoever, and any and all amounts
paid in settlement of any claim or litigation (collectively,
"Damages"), asserted against, resulting from, imposed upon, or
incurred or suffered, directly or indirectly, by P-Com, CRC or
Sub and each of their respective affiliates (other than the
Securityholders), directly or indirectly, as a result of or
arising from or in connection with any inaccuracy in, or breach
or nonfulfillment of, or noncompliance with any of the representa
tions, warranties, covenants, or agreements made by CRC or the
Key Securityholders in this Agreement (such inaccuracy, breach,
nonfulfillment or noncompliance shall be determined without
giving effect to any disclosure, qualification or limitation set
forth in any disclosure letter or schedule or related document or
other instrument referred to herein or attached hereto) or the
Escrow Agreement or any facts or circumstances constituting such
an inaccuracy, breach, nonfulfillment or noncompliance (all of
which shall also be referred to as "Identifiable Claims").
(b) P-Com shall use the Escrow Shares as its sole and
exclusive recourse for the Securityholders' obligations pursuant
to this Agreement and the Escrow Agreement and, absent fraud, for
the Key Securityholders' obligations pursuant to this Agreement
and the Escrow Agreement.
(c) P-Com shall indemnify, reimburse, defend and hold
harmless each Securityholder against any Damages asserted
against, resulting from, imposed upon, or incurred or suffered
directly or indirectly, by such Securityholder as a result of or
arising from or in connection with any inaccuracy in or breach or
nonfulfillment of or non-compliance with any of the
representations, warranties, covenants or agreements made by P-
Com in this Agreement or the Escrow Agreement, or any facts or
circumstances constituting such inaccuracy, breach,
nonfulfillment or noncompliance; provided that the maximum
aggregate liability of P-Com to the Securityholders shall be
limited to the value of the Escrow Shares then held in escrow,
based upon the per share price used in calculating the final
Aggregate Merger Consideration.
(d) The parties agree that the indemnification
provided for in this Article VII of this Agreement shall be
subject to and effected in accordance with the provisions set
forth in the Escrow Agreement.
VII.3 Limitation on Indemnification. Notwithstanding
----------------------------------------
any provision of this Article VII, P-Com, CRC and Sub and each of
their respective affiliates on the one hand and the Security
holders on the other hand shall each be entitled to
indemnification under this Article VII, and all other rights,
claims, actions and causes of action in respect of the
representations, warranties, covenants and agreements herein
contained, only when the aggregate amount of all entitlements to
indemnification hereunder exceeds $100,000, at which point such
indemnified parties shall be entitled to the full amount pursuant
to this Article VII including such liability cushion.
VII.4 Termination of Indemnity and Representations and Warranties.
----------------------------------------------------------------------
The indemnity obligations of the Securityholders and
P-Com and Sub pursuant to this Article VII (and the
representations, warranties, covenants and other agreements of
CRC and the Key Securityholders and P-Com and Sub set forth in
this Agreement, except otherwise set forth herein) for a breach
or inaccuracy of, or a failure to perform or comply with, any or
all of CRC's or the Key Securityholders' or P-Com's or Sub's
respective representations, warranties, covenants and agreements
and all other rights, claims, actions and causes of action at law
or in equity in respect of such representations, warranties,
covenants and agreements shall terminate upon the final date of
the auditor's report for P-Com that includes the audited results
for CRC for the fiscal year ended December 31, 1997; provided,
however that the indemnity obligations of the Securityholders
with respect to representations and warranties contained in
Sections 3.1(k) and 3.1(j) shall terminate upon the date one (1)
year after the Effective Time of the Merger. For purposes of the
indemnifications set forth herein, the fair market value of one
share of P-Com Common Stock shall equal the per share price used
in calculating the final Aggregate Merger Consideration.
ARTICLE VIII
TERMINATION
VIII.1 Termination.
----------------------
(a) This Agreement may be terminated at any time prior
to the Effective Time of the Merger, whether before or after
approval of the Merger by the Securityholders of CRC:
(i) if the Merger is not consummated by May
30, 1997;
(ii) by mutual agreement of the Boards of
Directors of P-Com and CRC;
(iii) by P-Com, if there has been a material
breach by CRC or any of the Key Securityholders of any
representation, warranty, covenant or agreement set forth in this
Agreement and CRC or any Key Securityholder fails to cure within
five (5) business days after notice thereof is given by P-Com
(except that no cure period shall be provided for a breach by CRC
or the Key Securityholders which by its nature cannot be cured);
(iv) by CRC, if there has been a material
breach by P-Com or Sub of any P-Com or Sub representation,
warranty, covenant or agreement set forth in this Agreement and
which P-Com or Sub, as the case may be, fails to cure within five
(5) business days after notice thereof is given by CRC (except
that no cure period shall be provided for a breach by P-Com which
by its nature cannot be cured);
(v) by CRC or P-Com, if any permanent
injunction or other order of a court preventing the Merger shall
have become final and nonappealable or shall render unlikely
within a reasonable period of time the consummation of the Merger
on the terms contemplated hereby; or
(vi) by CRC or P-Com, if any Governmental
Entity shall have issued a temporary restraining order,
preliminary injunction or permanent injunction or other order
preventing the consummation of the Merger or any litigation shall
be pending, the ultimate resolution of which is likely (i) in P-
Com's opinion to result in the issuance of such an order or
injunction, or the imposition against the Surviving Corporation
or P-Com of substantial damages if the Merger is consummated, or
(ii) in P-Com's or CRC's opinion to render P-Com, Sub or CRC
unable to consummate the Merger.
(b) Where action is taken to terminate this Agreement
pursuant to this Section 8.1, it shall be sufficient
authorization for such action to be authorized by the Board of
Directors of the party taking such action.
(c) In the event of termination of this Agreement as
provided in this Section 8.1 or a failure to meet all of the
closing conditions, this Agreement shall forthwith terminate
without liability of any party to any other party; provided,
however, that the agreements contained or referred to in Sections
5.11 and 5.13 shall survive and be legally enforceable.
ARTICLE IX
GENERAL PROVISIONS
IX.1 Survival of Representations, Warranties, Covenants and Agreements.
-----------------------------------------------------------------------
Except as set forth in this Agreement, all
representations, warranties, covenants and agreements in this
Agreement delivered pursuant to this Agreement (each as modified
by the schedules attached hereto) shall terminate at the Closing.
IX.2 Amendment. This Agreement may be amended by the
---------------
parties hereto at any time before or after approval of the Merger
by the Securityholders of CRC; provided, however, that following
approval of the Merger by the Securityholders of CRC, no
amendment shall be made which by law requires the further
approval of such Securityholders without obtaining such further
approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties
hereto.
IX.3 Extension; Waiver. At any time prior to the Effective
-----------------------
Time, each of CRC and P-Com, to the extent legally allowed,
(a) may mutually extend the time for the performance of any of
the obligations or other acts of the other, (b) may mutually
waive any inaccuracies in the representations and warranties made
to it contained herein or in any document delivered pursuant
hereto, and (c) may mutually waive compliance with any of the
agreements or conditions for the benefit of it contained herein.
Any agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
IX.4 Appointment and Indemnity of Escrow Committee.
---------------------------------------------------
(a) By approval of this Agreement (by written consent
or at a duly authorized securityholders' meeting), the
Securityholders shall appoint Xxxxx X'Xxxx and Xxxxxx Xxxxxxx as
committee members pursuant to the Escrow Agreement. Such
committee (the "Escrow Committee") shall have all of the
authority granted pursuant to the Escrow Agreement.
(b) The members of the Escrow Committee shall not be
liable to anyone whatsoever by reason of any error or judgment or
of any act done or step taken or omitted by him in good faith or
for any mistake of fact or law as is provided in the Escrow
Agreement.
IX.5 Notices. All notices and other communications
-------------
hereunder shall be in writing and shall be deemed given (a) on
the same day if delivered personally, (b) three (3) business days
after being mailed by registered or certified mail (return
receipt requested), or (c) on the same day if sent by telecopy,
confirmation received, to the parties at the following addresses
and telecopy numbers (or at such other address or number for a
party as shall be specified by like notice):
(w) If to P-Com or Sub, to:
P-Com, Inc.
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Sophie
Telecopy No.: (000) 000-0000
with copy to:
(x) Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(y) if to CRC, to:
Control Resources Corporation
00-00 Xxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Attn: President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
IX.6 Interpretation. When a reference is made in this
--------------------
Agreement to Sections, Exhibits or Schedules, such references
shall be to a Section, Exhibit or Schedule to this Agreement
unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The word "herein"
refers to this Agreement unless expressly limited to an Article,
Section or paragraph. The Article and Section headings in this
Agreement are inserted for convenience of reference only and
shall not affect the interpretation of this Agreement.
IX.7 Counterparts. This Agreement may be executed in one or
------------------
more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and
delivered to the other party.
IX.8 Entire Agreement. This Agreement and the documents and
----------------------
instruments and other agreements among the parties delivered
pursuant hereto constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof except for the
mutual non-disclosure agreement.
IX.9 No Transfer. This Agreement and the rights and
-----------------
obligations set forth herein may not be transferred or assigned
by operation of law or otherwise without the consent of each
party hereto. This Agreement is binding upon and will inure to
the benefit of the parties hereto and their respective successors
and permitted assigns.
IX.10 Severability. If any provision of this Agreement,
-----------------------
or the application thereof, will for any reason and to any extent
be invalid or unenforceable, the remainder of this Agreement and
application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible,
the economic, business and other purposes of the void or
unenforceable provision.
IX.11 Other Remedies. Except as expressly provided
-------------------------
herein or in the Escrow Agreement, any and all remedies set forth
in this Agreement and in the Closing Documents expressly
conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby or by law or
equity on such party; and the exercise of any one remedy will not
preclude the exercise of any other.
IX.12 Further Assurances. Each party agrees to
-----------------------------
cooperate fully with the other parties and to execute such
further instruments, documents and agreements and to give such
further written assurances as may be reasonably requested by any
other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the
intents and purposes of this Agreement.
IX.13 Absence of Third-Party Beneficiary Rights. No
----------------------------------------------------
provision of this Agreement is intended, or will be interpreted,
to provide to or create any third-party beneficiary rights or any
other rights of any kind in any client, customer, affiliate,
stockholder, employee, partner of any party hereto or any other
person or entity, and all provisions hereof will be personal
solely between the parties to this Agreement.
IX.14 Governing Law. This Agreement shall be governed
------------------------
in all respects, including validity, interpretation and effect,
by the laws of the State of Delaware (without giving effect to
its choice of law principles). The venue for determination of
any disputes related to this Agreement and the Related Agreements
shall be determined as follows: (i) in the event of any claims
initiated by CRC and/or the Securityholders, the venue shall be
the courts of the State of New York and (ii) in the event of any
claims initiated by P-Com or Sub, the venue shall be the courts
of the State of California; provided, however that the venue for
any counterclaims of the parties shall be the same as the venue
for the underlying claim out of which such counterclaim arises.
IX.15 Mutual Drafting. This Agreement is the joint
--------------------------
product of P-Com, CRC and the Key Securityholders, and each
provision hereof has been subject to the mutual consultation,
negotiation and agreement of P-Com, CRC and the Key
Securityholders, and their respective counsel, and shall not be
construed for or against any party hereto.
IX.16 Attorneys Fees. If any action at law or in equity
-------------------------
is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled; provided, however,
with respect to any claim commenced after the Effective Time of
the Merger, P-Com, CRC and Sub, on the one hand, and the
Securityholders, on the other hand, shall be limited to the
Escrow Shares or their value, as the case may be, in any action
pursuant to this Agreement or the transactions herein
contemplated against the Securityholders or the Key
Securityholders on the one hand, or P-Com or Sub, on the other
hand, absent a final determination, by a court having
jurisdiction over the matter, of fraud by the Key Securityholders
on the one hand, or P-Com or Sub, on the other hand; provided
further, however, that in any litigation consisting of a claim
for fraud brought by P-Com or Sub on the one hand, against Xxxxxx
Xxxxx, on the other hand, the limitation to the Escrow Shares or
their value shall not apply.
IN WITNESS WHEREOF, P-Com, Sub, CRC and the Key Securityholders have
caused this Agreement to be signed all as of the date first written above.
P-COM, INC.
By: /s/ Xxxxxxx X. Sophie
----------------------------------------
Xxxxxxx X. Sophie, Vice President,
Finance and Administration and Chief
Financial Officer
P-COM MERGER SUBSIDIARY, INC.
By: /s/ Xxxxxxx X. Sophie
---------------------------------------
Xxxxxxx X. Sophie, Chief
Financial Officer and Treasurer
CONTROL RESOURCES CORPORATION
By: /s/ Xxxxx X'Xxxx
--------------------------------------
Xxxxx X'Xxxx, Chief Executive
Officer
KEY SECURITYHOLDERS OF CRC
/s/ Xxxxx X'Xxxx
--------------------------------------
Xxxxx X'Xxxx
/s/ Xxxxxx Xxxxx
--------------------------------------
Xxxxxx Xxxxx
EXHIBIT 1.5
ESCROW AGREEMENT
(will be furnished upon request)
EXHIBIT 2.1(d)(iii)
OPTION ASSUMPTION AGREEMENT
(will be furnished upon request)
EXHIBIT 3.1(g)
PROJECTIONS OF CRC
(will be furnished upon request)
EXHIBIT 5.12
SECURITYHOLDER AGREEMENTS
(will be furnished upon request)
EXHIBIT 6.2(j)
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
(will be furnished upon request)
EXHIBIT 6.2(k)(1)
MANAGEMENT CERTIFICATES
(will be furnished upon request)
EXHIBIT 6.2(k)(2)
LIST OF CERTAIN OFFICERS AND KEY EMPLOYEES
(will be furnished upon request)
SCHEDULE 2.1(d)
CRC OPTION HOLDERS
(will be furnished upon request)
SCHEDULE 2.1(f)
CRC RESTRICTED STOCK HOLDERS
(will be furnished upon request)
SCHEDULE 2.2(b)
RECORD DATE CRC COMMON STOCK HOLDERS
(will be furnished upon request)
SCHEDULE 3.1(b)
CRC COMMON STOCK HOLDERS
(will be furnished upon request)
SCHEDULE 3.1(k)
INVENTORY
(will be furnished upon request)
SCHEDULE 3.1(l)
TAX MATTERS
(will be furnished upon request)
SCHEDULE 3.1(n)
GOVERNMENT PERMITS
(will be furnished upon request)
SCHEDULE 3.1(o)
INTELLECTUAL PROPERTY RIGHTS
(will be furnished upon request)
SCHEDULE 3.1(q)
CONTRACTS
(will be furnished upon request)
SCHEDULE 3.1(r)
LEASES
(will be furnished upon request)
SCHEDULE 3.1(t)
EMPLOYEE LIST
(will be furnished upon request)
SCHEDULE 3.1(u)
EMPLOYEE BENEFIT PLANS
(will be furnished upon request)
SCHEDULE 3.1(w)
INTERESTED PARTY RELATIONSHIPS
(will be furnished upon request)
SCHEDULE 3.1(z)
CUSTOMERS
(will be furnished upon request)
SCHEDULE 3.1(aa)
SUPPLIERS
(will be furnished upon request)
SCHEDULE 3.1(ae)
INSURANCE
(will be furnished upon request)
SCHEDULE 3.1(af)
ENVIRONMENTAL MATTERS
(will be furnished upon request)
SCHEDULE 3.1(ag)
BACKLOG
(will be furnished upon request)
SCHEDULE 3.1(ah)
DEBTS
(will be furnished upon request)
SCHEDULE 3.1(ai)
SERVICE PROVIDERS
(will be furnished upon request)
