EXHIBIT 99.1
ELASTIC VOTING AGREEMENT
THIS ELASTIC VOTING AGREEMENT (this "Agreement") is made and entered
into as of December 27, 2001 by and between Paradyne Networks, Inc., a Delaware
corporation ("Paradyne"), the undersigned stockholder ("Stockholder") of Elastic
Networks Inc., a Delaware corporation ("Elastic"), and, with respect to Section
5 only, Elastic.
RECITALS
A. Concurrently with the execution and delivery hereof, Paradyne,
Phoenix Merger Sub, Inc., a Delaware corporation and a direct wholly owned
subsidiary of Paradyne ("Sub"), and Elastic are entering into an Agreement and
Plan of Merger of even date herewith (the "Merger Agreement"), which provides
for the merger (the "Merger") of Sub with and into Elastic in accordance with
its terms.
B. Stockholder is the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
such number of shares of the outstanding capital stock of Elastic and shares
subject to outstanding options and warrants as is indicated on the signature
page of this Agreement.
C. In consideration of the execution and delivery of the Merger
Agreement by Paradyne and Sub, Stockholder (in his or her capacity as such)
desires to agree to vote the Shares (as defined herein) and other such shares of
capital stock of Elastic over which Stockholder has voting power so as to
facilitate the consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties hereto
hereby agree as follows:
1. Certain Definitions. Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed thereto in the Merger Agreement.
For all purposes of and under this Agreement, the following terms shall have the
following respective meanings:
(a) "Elastic Common Stock" means the common stock, par
value $0.01 per share, of Elastic.
(b) "Expiration Date" means the earlier to occur of (i)
such date and time as the Merger Agreement shall have been validly terminated
pursuant to the terms of Article 10 thereof, or (ii) the Effective Time.
(c) "Person" means any individual, corporation, limited
liability company, general or limited partnership, unincorporated association,
joint venture, or other business enterprise or entity.
(d) "Shares" means (i) all shares of Elastic Common Stock
and other voting securities of Elastic owned, beneficially or of record, by
Stockholder as of the date hereof, and (ii) all additional shares of Elastic
Common Stock and other voting securities of
Elastic acquired by Stockholder, beneficially or of record, during the period
commencing with the execution and delivery of this Agreement and expiring on the
Expiration Date.
(e) "Transfer" means, with respect to any security, to
directly or indirectly (i) sell, pledge, encumber, grant an option with respect
to, transfer or dispose of such security or any interest in such security, or
(ii) enter into an agreement, commitment or other arrangement to sell, pledge,
encumber, grant an option with respect to, transfer or dispose of such security
or any interest therein.
2. Transfer Restrictions.
(a) Transfer of Shares. At all times during the period
commencing with the execution and delivery of this Agreement and expiring on the
Expiration Date, Stockholder shall not, except in connection with the Merger or
as the result of the death of the Stockholder (if the Stockholder is a natural
person), Transfer any of the Shares, or discuss, negotiate, make an offer or
enter into an agreement, commitment or other arrangement with respect thereto,
unless each Person to which any of such Shares, or any interest in any of such
Shares, is or may be Transferred shall have: (i) executed a counterpart of this
Agreement and the Proxy (as defined in Section 4 hereof) (with such
modifications as Paradyne may reasonably request), and (ii) agreed in writing to
hold such Shares (or interest in such Shares) subject to all of the terms and
provisions of this Agreement.
(b) Transfer of Voting Rights. At all times during the
period commencing with the execution and delivery of this Agreement and expiring
on the Expiration Date, Stockholder shall not deposit (or permit the deposit of)
any Shares in a voting trust or grant any proxy or enter into any voting
agreement or similar agreement in contravention of the obligations of
Stockholder under this Agreement with respect to any of the Shares.
3. Agreement to Vote Shares. Prior to the Expiration Date, at
every meeting of the stockholders of Elastic called, and at every adjournment or
postponement thereof, and on every action or approval by written consent of the
stockholders of Elastic, Stockholder (in Stockholder's capacity as such) shall
appear at the meeting or otherwise cause the Shares to be present thereat for
purposes of establishing a quorum, and shall cause the Shares to be voted, to
the extent not voted by the persons appointed as proxies under the Proxy, (i) in
favor of the adoption of the Merger Agreement and in favor of approval of the
Merger, (ii) against the approval or adoption of any proposal made in opposition
to, or in competition with, the Merger Agreement and consummation of the Merger,
and (iii) against any of the following (to the extent unrelated to the Merger
Agreement and the Merger): (A) any merger, consolidation or business combination
involving Elastic; (B) any sale, lease or transfer of any significant portion of
the assets of Elastic or any of its subsidiaries; (C) any reorganization,
recapitalization, dissolution, liquidation or winding up of Elastic or any of
its subsidiaries; (D) any material change in the capitalization of Elastic or
the corporate structure of Elastic; or (E) any other action that is intended, or
could reasonably be expected to, impede, interfere with, delay, postpone,
discourage or adversely affect the consummation of the Merger.
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4. Irrevocable Proxy. Concurrently with the execution and
delivery of this Agreement, Stockholder shall deliver to Paradyne an Irrevocable
Proxy in the form attached hereto as Exhibit A (the "Proxy"), which shall be
irrevocable to the fullest extent permitted by applicable law and coupled with
an interest, with respect to the Shares.
5. Appraisal Rights. The undersigned hereby waives and agrees not
to exercise any rights of appraisal or rights to dissent from the Merger that
the undersigned may have.
6. Representations and Warranties of the Stockholder. Stockholder
hereby represents and warrants to Paradyne as follows: (i) Stockholder is the
beneficial or record owner of the shares of Elastic Common Stock indicated on
the signature page of this Agreement, free and clear of any Liens, (ii)
Stockholder does not beneficially own any securities of Elastic other than the
shares of Elastic Common Stock and options and warrants to purchase shares of
Elastic Common Stock set forth on the signature page of this Agreement, and
(iii) Stockholder has full power and authority to make, enter into and carry out
the terms of this Agreement and the Proxy.
7. Additional Documents. Stockholder (in Stockholder's capacity
as such) hereby covenants and agrees to execute and deliver any additional
documents necessary or desirable, in the reasonable opinion of Paradyne, to
carry out the intent of this Agreement.
8. Termination. This Agreement shall terminate and be of no
further force or effect whatsoever as of the Expiration Date.
9. Severability. If any term or other provision of this Agreement
is held invalid, illegal or incapable of being enforced by any court of
competent jurisdiction, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
10. Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, including, without
limitation, upon the death of the Stockholder (if the Stockholder is a natural
person), his estate, provided, however, that except as otherwise specifically
provided herein, neither this Agreement nor any of the rights, interests or
obligations of the parties hereto may be assigned by either of the parties
hereto without prior written consent of the other party hereto.
11. Amendments and Modification. This Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by each of the parties hereto; provided
that any provision of this Agreement may be waived, or the time for its
performance may be extended, by the party or
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parties entitled to the benefit thereof by a writing signed by such party or an
authorized representative thereof.
12. Specific Performance; Injunctive Relief. The parties hereto
acknowledge that Paradyne shall be irreparably harmed and that there shall be no
adequate remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth in this Agreement. Therefore, Stockholder hereby agrees
that, in addition to any other remedies that may be available to Paradyne upon
any such violation, Paradyne shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to Paradyne at law or in equity.
13. Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Paradyne: Paradyne Networks, Inc.
0000 000xx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile (000) 000-0000
and to: Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx, Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Stockholder: To the address for notice set forth on
the signature page hereof.
and to: Elastic Networks Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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and to: Xxxxxx & Xxxxxxxx
Xxxx xx Xxxxxxx Xxxxx, Xxxxx 0000
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: W. Tinley Xxxxxxxx, III
Xxxxxxx X. Xxxxxx, III
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(a) Governing Law. This Agreement shall be governed by
the laws of the State of Delaware, without reference to principles of conflicts
of law.
(b) Entire Agreement. This Agreement and the Proxy,
together with the documents expressly referred to herein, contain the entire
understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
(c) Officers and Directors. To the extent that
Stockholder is or becomes (during the term hereof) a director or officer of
Elastic, he or she makes no agreement or understanding herein in his or her
capacity as such director or officer, and nothing herein shall limit or affect,
or give rise to any liability to Stockholder by virtue of, any actions taken by
Stockholder in his or her capacity as an officer or director of Elastic in
exercising its rights under the Merger Agreement.
(d) Effect of Headings. The section headings are
for convenience only and shall not affect the construction or interpretation of
this Agreement.
(e) Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the date first above written.
PARADYNE NETWORKS, INC. STOCKHOLDER:
By: By:
------------------------------ --------------------------------------
Name:
----------------------------
Title:
---------------------------
Address:
---------------------------------
-----------------------------------------
-----------------------------------------
Telephone:
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Shares Beneficially Owned:
__________ shares of Elastic Common Stock
__________ shares of Elastic Common Stock
issuable upon the exercise of outstanding
options or warrants
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ELASTIC NETWORKS INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
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EXHIBIT A
IRREVOCABLE PROXY
The undersigned stockholder of Elastic Networks Inc., a Delaware
corporation ("Elastic"), does hereby irrevocably (to the fullest extent
permitted by law) appoint Paradyne Networks, Inc. ("Paradyne") and each of its
officers, and any of them, as the sole and exclusive attorneys and proxies of
the undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights (to the full extent that the undersigned
is entitled to do so) with respect to all of the shares of capital stock and any
other voting securities of Elastic that now are or hereafter may be beneficially
owned by the undersigned, and any and all other shares of capital stock or other
voting securities of Elastic issued or issuable in respect thereof on or after
the date hereof (collectively, the "Shares") in accordance with the terms of
this Irrevocable Proxy. The Shares beneficially owned by the undersigned
stockholder of Elastic as of the date of this Irrevocable Proxy are listed on
the final page of this Irrevocable Proxy. Upon the undersigned's execution of
this Irrevocable Proxy, any and all prior proxies given by the undersigned with
respect to any Shares are hereby revoked and the undersigned agrees not to grant
any subsequent proxies with respect to the Shares until after the Expiration
Date (as defined below).
This Irrevocable Proxy is irrevocable (to the fullest extent permitted
by applicable law), is coupled with an interest and is granted pursuant to that
certain Elastic Voting Agreement of even date herewith by and among Paradyne and
the undersigned stockholder (the "Voting Agreement"), and is granted in
consideration of Paradyne entering into that certain Agreement and Plan of
Merger (the "Merger Agreement"), by and among Paradyne, Phoenix Merger Sub,
Inc., a Delaware corporation and a direct wholly owned subsidiary of Paradyne
("Sub") and Elastic. The Merger Agreement provides for the merger (the "Merger")
of Sub with and into Elastic in accordance with its terms. As used herein, the
term "Expiration Date" shall mean the earlier to occur of (i) such date and time
as the Merger Agreement shall have been validly terminated by either Paradyne or
Elastic pursuant to Article 10 thereof, and (ii) such date and time as the
Merger shall become effective in accordance with the terms and provisions of the
Merger Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting, consent and similar rights of the undersigned with respect
to the Shares (including, without limitation, the power to execute and deliver
written consents) at every annual, special, postponed or adjourned meeting of
stockholders of Elastic, and in every written consent in lieu of such meeting,
as and to the extent provided in Section 3 of the Voting Agreement.
The attorneys and proxies named above may not exercise this Irrevocable
Proxy on any other matter except as provided above. The undersigned stockholder
may vote the Shares on all other matters.
A-1
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned. The undersigned is executing this
Irrevocable Proxy only in its capacity as a stockholder. Such signature in no
way affects its obligations as an officer or director of Elastic.
This Irrevocable Proxy is coupled with an interest and is irrevocable
(to the fullest extent permitted by applicable law). This Irrevocable Proxy
shall terminate, and be of no further force and effect, automatically upon the
Expiration Date.
Dated: December ____, 2001
By:
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Stockholder
Shares Beneficially Owned:
__________ shares of Elastic Common Stock
__________ shares of Elastic Common Stock
issuable upon the exercise of outstanding
options or warrants
A-2
ANNEX A -- SIGNATORIES
Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxx Elop
Xxx Xxxx
Xxxxxxx Xxxxxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxx
