EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LARSCOM INCORPORATED,
LONDON ACQUISITION CORP.
AND
VINA TECHNOLOGIES, INC.
DATED AS OF MARCH 17, 2003
TABLE OF CONTENTS
PAGE
----
ARTICLE I THE MERGER............................................................................................ 2
1.1 The Mergers................................................................................... 2
1.2 The Closing................................................................................... 2
1.3 Effective Time................................................................................ 3
1.4 Certificate of Incorporation and Bylaws of the Initial Surviving Corporation.................. 3
1.5 Certificate of Incorporation and Bylaws of Larscom and Surviving Corporation.................. 3
1.6 Directors and Officers of the Initial Surviving Corporation................................... 4
1.7 Directors and Officers of the Surviving Corporation........................................... 4
1.8 Tax Consequences.............................................................................. 5
ARTICLE II CONVERSION OF SECURITIES............................................................................. 5
2.1 Conversion of Capital Stock................................................................... 5
2.2 Exchange of Certificates...................................................................... 6
2.3 VINA Stock Plans and VINA Warrants............................................................ 9
2.4 Taking Necessary and Further Action........................................................... 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF VINA.............................................................. 10
3.1 Organization, Standing and Power.............................................................. 11
3.2 Charter Documents............................................................................. 11
3.3 Capitalization................................................................................ 11
3.4 Subsidiaries.................................................................................. 14
3.5 Authority; No Conflict; Required Filings and Consents......................................... 15
3.6 SEC Filings; Financial Statements; Information Provided....................................... 16
3.7 No Undisclosed Liabilities.................................................................... 18
3.8 Absence of Certain Changes or Events.......................................................... 18
3.9 Taxes......................................................................................... 18
3.10 Owned and Leased Real Properties.............................................................. 19
3.11 Intellectual Property......................................................................... 20
3.12 Agreements, Contracts and Commitments......................................................... 23
3.13 Litigation.................................................................................... 24
3.14 Environmental Matters......................................................................... 24
3.15 Employees..................................................................................... 25
3.16 Employee Benefit Plans........................................................................ 26
3.17 Compliance With Laws.......................................................................... 29
3.18 Permits....................................................................................... 29
3.19 Insurance..................................................................................... 30
3.20 Title to Assets............................................................................... 30
3.21 Equipment and Leaseholds...................................................................... 30
3.22 Receivables; Customers; Inventory............................................................. 30
3.23 Certain Business Practices.................................................................... 31
- i -
3.24 Opinion of Financial Advisor.................................................................. 31
3.25 Rights Plan Amendment......................................................................... 31
3.26 Section 203 of the DGCL Not Applicable........................................................ 31
3.27 Brokers....................................................................................... 31
3.28 Loans to Executive Officers................................................................... 31
3.29 Financial Controls............................................................................ 32
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LARSCOM AND THE TRANSITORY SUBSIDIARY.............................. 32
4.1 Organization, Standing and Power.............................................................. 32
4.2 Charter Documents............................................................................. 33
4.3 Capitalization................................................................................ 33
4.4 Subsidiaries.................................................................................. 35
4.5 Authority; No Conflict; Required Filings and Consents......................................... 36
4.6 SEC Filings; Financial Statements; Information Provided....................................... 38
4.7 No Undisclosed Liabilities.................................................................... 38
4.8 Absence of Certain Changes or Events.......................................................... 39
4.9 Taxes......................................................................................... 39
4.10 Owned and Leased Real Properties.............................................................. 40
4.11 Intellectual Property......................................................................... 41
4.12 Agreements, Contracts and Commitments......................................................... 43
4.13 Litigation.................................................................................... 44
4.14 Environmental Matters......................................................................... 44
4.15 Employees..................................................................................... 45
4.16 Employee Benefit Plans........................................................................ 46
4.17 Compliance With Laws.......................................................................... 49
4.18 Permits....................................................................................... 49
4.19 Insurance..................................................................................... 49
4.20 Title to Assets............................................................................... 49
4.21 Equipment and Leaseholds...................................................................... 50
4.22 Receivables; Customers; Inventory............................................................. 50
4.23 Certain Business Practices.................................................................... 50
4.24 Opinion of Financial Advisor.................................................................. 50
4.25 Brokers....................................................................................... 51
4.26 Operations of the Transitory Subsidiary....................................................... 51
4.27 Section 203 of the DGCL Not Applicable........................................................ 51
4.28 Loans to Executive Officers................................................................... 51
4.29 Financial Controls............................................................................ 51
ARTICLE V CONDUCT OF BUSINESS................................................................................... 51
5.1 Covenants of VINA............................................................................. 51
5.2 Covenants of Larscom.......................................................................... 55
5.3 Confidentiality............................................................................... 58
- ii -
ARTICLE VI ADDITIONAL AGREEMENTS................................................................................ 58
6.1 No Solicitation............................................................................... 58
6.2 Joint Proxy Statement/Prospectus and Registration Statement................................... 61
6.3 Larscom Affiliate Agreements.................................................................. 63
6.4 Access to Information......................................................................... 63
6.5 Stockholders Meetings......................................................................... 64
6.6 Legal Conditions to Merger.................................................................... 64
6.7 Public Disclosure............................................................................. 66
6.8 Section 368(a) Reorganization................................................................. 66
6.9 Affiliate Legends............................................................................. 66
6.10 Nasdaq Stock Market Listing................................................................... 66
6.11 Stockholder Litigation........................................................................ 67
6.12 Indemnification............................................................................... 67
6.13 Notification of Certain Matters............................................................... 68
6.14 Exemption from Liability Under Section 16(b).................................................. 68
6.15 Restated Certificate.......................................................................... 69
6.16 Employee Benefits............................................................................. 69
6.17 Termination of Pension Plan................................................................... 70
6.18 Tax Matters................................................................................... 70
6.19 Registration Rights Agreement................................................................. 70
ARTICLE VII CONDITIONS TO MERGER................................................................................ 71
7.1 Conditions to Each Party's Obligation To Effect the First Merger.............................. 71
7.2 Additional Conditions to the Obligations of VINA.............................................. 72
7.3 Additional Conditions to the Obligations of Larscom and Transitory Subsidiary................. 72
ARTICLE VIII TERMINATION AND AMENDMENT.......................................................................... 73
8.1 Termination................................................................................... 73
8.2 Effect of Termination......................................................................... 76
8.3 Fees and Expenses............................................................................. 76
8.4 Amendment..................................................................................... 77
8.5 Extension; Waiver............................................................................. 77
ARTICLE IX MISCELLANEOUS........................................................................................ 77
9.1 Nonsurvival of Representations and Warranties................................................. 77
9.2 Notices....................................................................................... 78
9.3 Entire Agreement.............................................................................. 79
9.4 No Third Party Beneficiaries.................................................................. 79
9.5 Assignment.................................................................................... 79
9.6 Severability.................................................................................. 79
9.7 Counterparts and Signature.................................................................... 79
9.8 Interpretation................................................................................ 79
9.9 Governing Law................................................................................. 80
- iii -
9.10 Remedies...................................................................................... 80
9.11 Waiver of Jury Trial.......................................................................... 80
Exhibits
--------
Exhibit A Form of VINA Voting Agreement
Exhibit B Form of Larscom Voting Agreement
Exhibit C Form of Restated Certificate of Incorporation of Larscom
Exhibit D Form of Registration Rights Agreement
- iv -
TABLES OF DEFINED TERMS
Cross Reference
TERMS in Agreement
--------------------------------------------- ------------------------------
Acquisition Proposal Section 6.1(f)
Acquisition Transaction Section 8.3(d)
Affiliate Section 3.3(e)
Agreement Preamble
Antitrust Law Section 6.6(b)
Antitrust Order Section 6.6(b)
Bankruptcy and Equity Exception Section 3.5(a)
Blue Sky Laws Section 3.5(c)
Certificate of Merger Section 1.1
Certificate of Ownership and Merger Section 1.1(b)
Certificates Section 2.2(a)
Closing Section 1.2(a)
Closing Date Section 1.2(a)
Code Preamble
Confidentiality Agreement Section 5.3
Continuing Employees Section 6.16
DGCL Preamble
DOL Section 3.16(c)
Effective Time Section 1.1
Employee Benefit Plan Section 3.16(a)
Environmental Laws Section 3.14
Environmental Permits Section 3.14
ERISA Section 3.16(a)
ERISA Affiliate Section 3.16(a)
Exchange Act Section 3.5(c)
Exchange Agent Section 2.2(a)
Exchange Fund Section 2.2(a)
Exchange Ratio Section 2.1(b)
First Merger Preamble
GAAP Section 3.6(b)
Government Bid Section 3.12(e)
Government Contract Section 3.12(e)
Governmental Entity Section 3.5(c)
Hazardous Materials Section 3.14
Hazardous Materials Activity Section 3.14
HSR Act Section 3.5(c)
HSR Approval Section 3.5(c)
Indemnified Parties Section 6.12(a)
Initial Surviving Corporation Section 1.1(a)
Intellectual Property Section 3.11(a)
IRS Section 3.16(b)
- i -
Cross Reference
TERMS in Agreement
--------------------------------------------- ------------------------------
Joint Proxy Statement/Prospectus Section 6.2(a)
Liens Section 3.5(b)
Larscom Preamble
Larscom Balance Sheet Section 4.6(b)
Larscom Board Preamble
Larscom Business Facility Section 4.14
Larscom Charter Documents Section 4.2
Larscom Class A Common Stock Section 4.3(a)
Larscom Class B Common Stock Section 4.3(a)
Larscom Class Common Stock Section 4.3(a)
Larscom Common Stock Section 2.1(a)
Larscom Disclosure Schedule Article IV
Larscom Employee Plans Section 4.16(a)
Larscom Insurance Policies Section 4.19
Larscom Intellectual Property Section 4.11(b)
Larscom International Employee Plan Section 4.16(j)
Larscom Leased Property Section 4.10(b)
Larscom Leases Section 4.10(b)
Larscom Material Adverse Effect Section 4.1
Larscom Material Contracts Section 4.12(a)
Larscom Material Inbound Licenses Section 4.11(b)
Larscom Material Licenses Section 4.11(c)
Larscom Material Outbound Licenses Section 4.11(c)
Larscom Meeting Section 4.5(d)
Larscom Permits Section 4.18
Larscom Preferred Stock Section 4.3(a)
Larscom SEC Reports Section 4.6(a)
Larscom Software Section 4.11(g)
Larscom Stock Option Section 4.3(c)
Larscom Stock Plans Section 2.3(a)
Larscom Stockholder Approval Section 3.5(a)
Larscom Voting Agreement Preamble
Larscom Voting Proposal Section 4.5(a)
Merger Section 1.1
Ordinary Course of Business Section 3.7
Outside Date Section 8.1(b)
Parent Agreements Section 6.3
Registration Statement Section 6.2(a)
Regulation M-A Filing Section 6.2(b)
Restated Certificate Section 1.5(a)
Representatives Section 6.1(a)
Returns Section 3.9(b)
Reverse Stock Split Section 4.5(a)
- ii -
Cross Reference
TERMS in Agreement
--------------------------------------------- ------------------------------
Rule 145 Affiliates Section 6.9
SEC Section 3.6(a)
Second Merger Preambles
Section 16 Information Section 6.14(b)
Securities Act Section 3.3(e)
Specified Time Section 6.1(a)
Subsidiary Section 3.4(a)
Superior Proposal Section 6.1(f)
Surviving Corporation Section 1.1
Tax Section 3.9(a)
Taxes Section 3.9(a)
Transitory Subsidiary Preamble
VINA Preamble
VINA Balance Sheet Section 3.6(b)
VINA Board Preamble
VINA Business Facility Section 3.14
VINA Charter Documents Section 3.2
VINA Common Stock Section 2.1(a)
VINA Disclosure Schedule Article III
VINA Employee Plans Section 3.16(a)
VINA ESPP Section 2.3(e)
VINA Insiders Section 6.14(c)
VINA Insurance Policies Section 3.19
VINA Intellectual Property Section 3.11(b)
VINA International Employee Plan Section 3.16(g)
VINA Leased Property Section 3.10(b)
VINA Leases Section 3.10(b)
VINA Material Adverse Effect Section 3.1
VINA Material Contracts Section 3.12(a)
VINA Material Inbound Licenses Section 3.11(b)
VINA Material Licenses Section 3.11(c)
VINA Material Outbound Licenses Section 3.11(c)
VINA Meeting Section 3.5(d)
VINA Options Section 3.3(c)
VINA Permits Section 3.18
VINA Preferred Stock Section 3.3(a)
VINA Rights Section 2.1(c)
VINA Rights Plan Section 3.25
VINA Rights Plan Amendment Section 3.25
VINA SEC Reports Section 3.6(a)
VINA Software Section 3.11(g)
VINA Stock Option Section 2.3(a)
VINA Stock Plans Section 3.3(a)
-iii-
Cross Reference
TERMS in Agreement
--------------------------------------------- ------------------------------
VINA Stockholder Approval Section 3.5(a)
VINA Terminating Plan(s) Section 6.17
VINA Third Party Intellectual Property Section 3.11(b)
VINA Voting Agreement Preamble
VINA Voting Proposal Section 3.5(a)
VINA Warrants Section 3.3(a)
VINA 1996 Plan Section 2.3(a)
VINA 1998 Plan Section 2.3(a)
VINA 2000 Plan Section 2.3(a)
Woodwind Section 2.3(a)
Woodwind 1999 Plan Section 2.3(a)
Woodwind 2000 Plan Section 2.3(a)
- iv -
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of March
17, 2003, is by and among Larscom, a Delaware corporation, ("LARSCOM"), London
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Larscom (the "TRANSITORY SUBSIDIARY"), and VINA Technologies, Inc., a Delaware
corporation ("VINA").
WHEREAS, the board of directors of VINA (the "VINA BOARD") and the
board of directors of Larscom ("LARSCOM BOARD") each deems it advisable and in
the best interests of their respective corporation and its stockholders that
VINA and Larscom combine in order to advance the long-term business interests of
VINA and Larscom;
WHEREAS, the combination of Larscom and VINA shall be effected through
a merger of the Transitory Subsidiary with and into VINA (the "FIRST MERGER")
with VINA as the surviving corporation, followed by the merger of VINA with and
into Larscom (the "SECOND MERGER" and collectively with the First Merger, the
"MERGER") in accordance with the terms of this Agreement and the General
Corporation Law of the State of Delaware (the "DGCL");
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to VINA's willingness to enter into this
Agreement, the majority stockholder of Larscom will be entering into the Larscom
Voting Agreement, dated as of the date of this Agreement, in the form attached
hereto as Exhibit A (the "LARSCOM VOTING AGREEMENT"), pursuant to which each
such stockholder will, among other things, agree to give VINA a proxy to vote
all of the shares of capital stock of Larscom that such stockholder owns in
order to consummate the transactions contemplated hereby;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Larscom's willingness to enter into this
Agreement, certain stockholders of VINA will be entering into the VINA Voting
Agreement, dated as of the date of this Agreement, in the form attached hereto
as Exhibit B (the "VINA VOTING AGREEMENT"), pursuant to which such stockholders
will, among other things, agree to give Larscom a proxy to vote all of the
shares of capital stock of VINA that such stockholder owns, subject to certain
restrictions, in order to consummate the transactions contemplated hereby;
WHEREAS, for United States federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "CODE"), and the
rules and regulations promulgated thereunder; and that each of Larscom, the
Transitory Subsidiary and VINA are a party to a reorganization within the
meaning of Section 368(a) of the Code;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, Larscom,
the Transitory Subsidiary and VINA agree as follows:
- 1 -
ARTICLE I
THE MERGER
1.1 The Mergers.
(a) First Merger. Upon and subject to the terms and
conditions of this Agreement, the Transitory Subsidiary shall merge with and
into VINA at the Effective Time. From and after the Effective Time, the separate
corporate existence of the Transitory Subsidiary shall cease, and VINA shall
continue as the surviving corporation in the First Merger. VINA following the
First Merger is sometimes referred to herein as the "INITIAL SURVIVING
CORPORATION." The First Merger shall be effected by filing a certificate of
merger (the "CERTIFICATE OF MERGER") in a form mutually acceptable to Larscom
and VINA and executed by the Initial Surviving Corporation in accordance with
Section 251(c) of the DGCL. The Merger shall have the effects set forth in
Section 259 of the DGCL.
(b) Second Merger. Upon the terms and subject to the
conditions set forth in this Agreement, following the First Merger, the Initial
Surviving Corporation shall be merged, in accordance with Section 253 of the
DGCL, with and into Larscom, and Larscom shall continue as the surviving
corporation in the Second Merger. Larscom following the Second Merger is
sometimes referred to herein as the "SURVIVING CORPORATION." The Second Merger
shall be effected by filing a certificate of ownership and merger (the
"CERTIFICATE OF OWNERSHIP AND MERGER") with the Secretary of State of the State
of Delaware in accordance with Section 253 of the DGCL.
1.2 The Closing.
(a) Unless this Agreement is earlier terminated pursuant
to Article VIII, the closing of the Merger (the "CLOSING") shall take place at
9:00 a.m., eastern time, on a date to be specified by VINA and Larscom (the
"CLOSING DATE"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VII (other than
delivery of items to be delivered at the Closing and other than satisfaction of
those conditions that by their nature are to be satisfied at the Closing, it
being understood that the occurrence of the Closing shall remain subject to the
delivery of such items and the satisfaction or waiver of such conditions at the
Closing), at the offices of Pillsbury Winthrop LLP, 00 Xxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, unless another date, place or time is agreed to in
writing by VINA and Larscom.
(b) At the Closing:
(i) Larscom shall deliver to VINA the various
certificates, instruments and documents referred to in Section 7.2;
(ii) VINA shall deliver to Larscom the various
certificates, instruments and documents referred to in Section 7.3;
(iii) Larscom shall file, immediately prior to the
Effective Time, the Restated Certificate with the Secretary of State of
the State of Delaware; and
- 2 -
(iv) VINA, on behalf of the Initial Surviving
Corporation, shall file the Certificate of Merger with the Secretary of
State of the State of Delaware.
1.3 Effective Time.
(a) Subject to the provisions of this Agreement, the
parties shall cause the First Merger contemplated by this Agreement to be
consummated by the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware. The First Merger shall become effective at such
time as the Certificate of Merger has been duly filed with the Secretary of
State of the State of Delaware, or at such subsequent date or time as the
parties shall mutually agree upon (the time the First Merger becomes effective
referred to herein as the "EFFECTIVE TIME").
(b) Following the Effective Time, Larscom and the Initial
Surviving Corporation shall cause the Second Merger contemplated by this
Agreement to be consummated by the filing of the Certificate of Ownership and
Merger with the Secretary of State of the State of Delaware executed in
accordance with the relevant provisions of the DGCL, and Larscom and the Initial
Surviving Corporation shall make all other filings or recordings required under
the DGCL. The Second Merger shall become effective at such time of the filing of
the Certificate of Ownership and Merger with the Secretary of State of the State
of Delaware, or at such subsequent date or time as the parties shall agree and
specify in such filings.
1.4 Certificate of Incorporation and Bylaws of the Initial
Surviving Corporation.
(a) The Certificate of Incorporation of VINA shall be
amended and restated, by means of the Certificate of Merger, to substantially
conform to the Certificate of Incorporation of the Transitory Subsidiary as in
effect immediately prior to the Effective Time (except that the name of the
Surviving Corporation shall be "VINA" or such other name as is mutually agreed
to by Larscom and VINA) and, as so amended, such Certificate of Incorporation
shall be the Certificate of Incorporation of the Initial Surviving Corporation,
until further amended in accordance with the DGCL and such Certificate of
Incorporation.
(b) As of the Effective Time, by virtue of the First
Merger and without any action on the part of the Transitory Subsidiary and
Larscom, the Bylaws of Initial Surviving Corporation shall be amended and
restated to read the same as the Bylaws of VINA, as in effect immediately
prior to the Effective Time, until thereafter amended in accordance with the
DGCL, the Certificate of Incorporation of the Initial Surviving Corporation and
such Bylaws; provided, however, that all references in such Bylaws to VINA shall
be amended to refer to such name as is mutually agreed to by VINA and Larscom.
1.5 Certificate of Incorporation and Bylaws of Larscom and
Surviving Corporation.
(a) At the Effective Time, the certificate of
incorporation of Larscom shall be amended and restated to read in its entirety
in the form attached hereto as Exhibit C (the "RESTATED CERTIFICATE") and, as so
amended, such Restated Certificate shall be the Certificate of Incorporation of
Larscom and, upon the effective time of the Second Merger, the Surviving
Corporation, until further amended in accordance with the DGCL and such Restated
Certificate.
- 3 -
(b) The Bylaws of Larscom, as in effect immediately prior
to the Second Merger, shall be the Bylaws of the Surviving Corporation, until
thereafter amended in accordance with the DGCL and such Bylaws.
1.6 Directors and Officers of the Initial Surviving Corporation.
(a) The directors of the Transitory Subsidiary
immediately prior to the Effective Time shall be the initial directors of the
Initial Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Initial Surviving Corporation.
(b) The officers of the Transitory Subsidiary immediately
prior to the Effective Time shall be the initial officers of the Initial
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Initial Surviving Corporation.
1.7 Directors and Officers of the Surviving Corporation.
(a) Board of Directors of Larscom. Prior to the Effective
Time, Larscom shall take all necessary action to cause the Larscom Board to
consist, as of the Effective Time of nine (9) directors, (a) five (5) of whom
shall be persons designated by Larscom prior to the mailing of the Joint Proxy
Statement/Prospectus (one of who shall be Xxxxxxx Xxxxxxxx as the non-executive
Chairman of the Larscom Board commencing as of the Effective Time) and (b) four
(4) of whom shall be persons designated by VINA prior to the mailing of the
Joint Proxy Statement/Prospectus. If any such person is not able to serve as a
director of Larscom as of the Effective Time, the party who originally
designated such director shall select a replacement.
(b) Larscom shall take all necessary action to cause
Xxxxxx X. Xxxxxxx to remain as the President and Chief Executive Officer of
Larscom immediately after the Effective Time, and such other persons as have
been mutually agreed upon by VINA and Larscom as of the date hereof and prior to
the Effective Time shall be appointed as officers of Larscom commencing
immediately after the Effective Time, and such officers shall hold office until
their respective successors are duly appointed and qualified, or their earlier
death, resignation or removal.
- 4 -
1.8 Tax Consequences. The parties hereto intend that the Merger
shall constitute a reorganization within the meaning of Section 368(a) of the
Code. The parties hereto adopt this Agreement as a "plan of reorganization"
within the meaning of Section 1.368-3(a) of the U.S. Income Tax Regulations.
ARTICLE II
CONVERSION OF SECURITIES
2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the Transitory
Subsidiary, VINA or the holder of any shares of the capital stock of VINA or the
Transitory Subsidiary:
(a) Capital Stock of the Transitory Subsidiary. Each
share of the common stock of the Transitory Subsidiary issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
fully paid and nonassessable share of common stock, $0.0001 par value per share,
of the Initial Surviving Corporation. From and after the Effective Time, all
certificates representing the common stock of the Transitory Subsidiary shall be
deemed for all purposes to represent the number of shares of common stock of the
Initial Surviving Corporation into which they were converted in accordance with
this Section 2.1(a).
(b) Exchange Ratio for VINA Common Stock. Subject to this
Section 2.1 and Section 2.2 hereof, each share of common stock of VINA,
$0.0001 par value (the "VINA COMMON STOCK") issued and outstanding immediately
prior to the Effective Time, other than shares to be cancelled in accordance
with Section 2.1(c) hereof, shall be automatically converted into the right to
receive 0.2659 (the "EXCHANGE RATIO") of a validly issued, fully paid and
nonassessable share of Common Stock, $0.01 par value per share, of Larscom
("LARSCOM COMMON STOCK"). As of the Effective Time, all such shares of VINA
Common Stock shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares of VINA Common Stock shall cease to have any rights
with respect thereto, except the right to receive the Larscom Common Stock
pursuant to this Section 2.1(b) and any cash in lieu of fractional shares of
Larscom Common Stock to be issued or paid in consideration therefor upon the
surrender of such certificate in accordance with Section 2.2, without interest.
(c) Cancellation of Treasury Stock and Larscom-Owned
Stock. All shares of VINA Common Stock (together with the associated VINA Rights
(as defined in the Preamble of the VINA Rights Plan (the "VINA RIGHTS") that are
owned by VINA as treasury stock and any shares of VINA Common Stock owned by
Larscom or the Transitory Subsidiary immediately prior to the Effective Time
shall be cancelled and shall cease to exist and no shares of Larscom or other
consideration shall be delivered in exchange therefor.
(d) Adjustments to Exchange Ratio. The Exchange Ratio
shall be adjusted to reflect fully the effect of any reclassification, share or
stock split, reverse split (including the Reverse Stock Split contemplated under
this Agreement), share or stock dividend (including any dividend or distribution
of securities convertible into Larscom Common Stock or VINA Common Stock),
reorganization, recapitalization or other like change with respect to Larscom
- 5 -
Common Stock or VINA Common Stock occurring (or for which a record date is
established) after the date hereof and prior to the Effective Time.
(e) Unvested Stock. If any shares of VINA Common Stock
outstanding immediately prior to the Effective Time are unvested or are subject
to a repurchase option, risk of forfeiture or other condition under any
applicable restricted stock purchase agreement or other agreement with VINA,
then the shares of Larscom Common Stock issued in exchange for such shares of
VINA Common Stock will also be unvested or subject to the same repurchase
option, risk of forfeiture or other condition, and the certificates representing
such shares of Larscom Common Stock will accordingly be marked with appropriate
legends. All outstanding rights which VINA may hold immediately prior to the
Effective Time to repurchase unvested shares of VINA Common Stock or to exercise
any other right with respect to shares of VINA Common Stock that are restricted
shall be automatically assigned to Larscom in the Merger at the Effective Time
and shall thereafter be exercisable by Larscom upon the same terms and
conditions (including, without limitation, any provision for acceleration) in
effect immediately prior to the Effective Time, except that the shares
purchasable pursuant to such rights and the purchase price payable per share
shall be appropriately adjusted to reflect the Exchange Ratio. VINA shall take
all reasonable steps necessary to cause the foregoing provisions of this Section
2.1(e) to occur.
2.2 Exchange of Certificates. The procedures for exchanging
outstanding shares of VINA Common Stock for Larscom Common Stock pursuant to the
Merger are as follows:
(a) Exchange Agent. At or promptly following the
Effective Time, Larscom shall deposit, or cause to be deposited, with Larscom's
transfer agent or another bank or trust company designated by Larscom and
reasonably acceptable to VINA (the "EXCHANGE AGENT"), for the benefit of the
holders of shares of VINA Common Stock, for exchange, in accordance with this
Section 2.2: (i) Larscom Common Stock issuable pursuant to Section 2.1 in
exchange for outstanding shares of VINA Common Stock, (ii) cash in an amount
sufficient to make payments for fractional shares required pursuant to Section
2.2(c), and (iii) any dividends or distributions to which holders of
certificates which immediately prior to the Effective Time represented
outstanding shares of VINA Common Stock (the "CERTIFICATES") may be entitled
pursuant to Section 2.2(d) (such Larscom Common Stock, together with the amount
of any dividends or other distributions payable with respect thereto and any
cash in lieu of fractional shares, being collectively hereinafter referred to as
the "EXCHANGE FUND").
(b) Exchange Procedures. Promptly following the Effective
Time, the Exchange Agent shall mail to each holder of record of a Certificate or
Certificates whose shares were converted pursuant to Section 2.1 into the right
to receive shares of Larscom Common Stock (i) a letter of transmittal in
customary form, reasonably satisfactory to VINA (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
contain such other provisions as Larscom may reasonably require) and (ii)
instructions for effecting the surrender of the Certificates in exchange for
Larscom Common Stock (plus cash in lieu of fractional shares of Larscom Common
Stock, if any, and any dividends or distributions as provided below). Upon
surrender of a Certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by Larscom, together with such letter
of transmittal, duly executed, and
- 6 -
such other documents as may reasonably be required by the Exchange Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Larscom Common Stock
which such holder has the right to receive pursuant to the provisions of Section
2.1 plus cash in lieu of fractional shares pursuant to Section 2.2(c) and any
dividends or distributions pursuant to Section 2.2(d), and the Certificate so
surrendered shall immediately be cancelled. In the event of a valid transfer of
ownership of VINA Common Stock which is not registered in the transfer records
of VINA, a certificate representing the proper number of shares of Larscom
Common Stock plus cash in lieu of fractional shares pursuant to Section 2.2(c)
and any dividends or distributions pursuant to Section 2.2(d) may be issued or
paid to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate is presented to the Exchange
Agent, accompanied by all documents reasonably required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have been
paid or are not payable. Until surrendered as contemplated by this Section 2.2,
each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Larscom Common Stock
issued in consideration therefor plus cash in lieu of fractional shares pursuant
to Section 2.2(c) and any dividends or distributions pursuant to Section 2.2(d)
as contemplated by this Section 2.2.
(c) No Fractional Shares. No fraction of a share of
Larscom Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests shall not entitle the owner
thereof to vote or to any other rights of a stockholder of Larscom.
Notwithstanding any other provision of this Agreement, each holder of shares of
Larscom Common Stock converted pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of Larscom Common Stock (after
taking into account all Certificates delivered by such holder and the aggregate
number of shares of VINA Common Stock represented thereby) shall receive, in
lieu thereof, cash (without interest) in an amount equal to such fractional part
of a share of Larscom Common Stock multiplied by the last reported sale price of
a share of Larscom Common Stock at the 4:00 p.m. Eastern time, end of regular
trading hours on The Nasdaq Stock Market, on the last trading day prior to the
Effective Time (or if the Larscom Common Stock shall not be traded on The Nasdaq
Stock Market at such time, the last reported sale price on such day as reported
on the OTC Bulletin Board, if so reported, or the average of the high and low
bid prices in the over-the-counter market on such day if not so reported).
(d) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time with
respect to Larscom Common Stock with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate until the holder of
record of such Certificate shall surrender such Certificate. Subject to the
effect of applicable laws, promptly following surrender of any such Certificate,
the Exchange Agent shall deliver to the record holder thereof, without interest,
(i) the amount of dividends or other distributions with a record date after the
Effective Time previously paid with respect to such whole shares of Larscom
Common Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions payable with respect to such whole shares of Larscom
Common Stock having a record date after the Effective Time but prior to the date
of such surrender and a payment date subsequent to the date of such surrender.
- 7 -
(e) No Further Ownership Rights in Larscom Common Stock.
All shares of Larscom Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms hereof (including any cash or
dividends or other distributions paid pursuant to Section 2.2(c) or 2.2(d))
shall be deemed to have been issued (and paid) in full satisfaction of all
rights pertaining to such shares of VINA Common Stock, and from and after the
Effective Time there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of VINA Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or the
Exchange Agent for any reason, they shall be cancelled and exchanged for the
consideration provided for, and in accordance with the procedures set forth, in
this Article II.
(f) Termination of Exchange Fund/Limitation of Liability.
Any portion of the Exchange Fund (including the proceeds of any investments
thereof and any Larscom Common Stock) that remains unclaimed by the stockholders
of VINA for six (6) months after the Effective Time shall be paid to Larscom.
Any stockholders of VINA who have not theretofore complied with this Article II
shall thereafter look only to Larscom for payment of their shares of Larscom
Common Stock and any cash, dividends and other distributions in respect of
Larscom Common Stock payable and/or issuable pursuant to Section 2.1, 2.2(c) and
2.2(d) upon due surrender of the Certificates (or affidavits of loss in lieu
thereof and, if required, the posting of a bond), in each case, without any
interest thereon. To the extent permitted by applicable law, none of Larscom,
the Transitory Subsidiary, VINA, the Surviving Corporation or the Exchange
Agent shall be liable to any holder of shares of Larscom Common Stock or VINA
Common Stock, as the case may be, for such shares (or dividends or distributions
with respect thereto) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(g) Withholding Rights. Each of the Exchange Agent,
Larscom and the Surviving Corporation shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Article II to any
holder of shares of VINA Common Stock such amounts as it reasonably determines
that it is required to deduct and withhold with respect to the making of such
payment under the Code, or any other applicable provision of state, local or
foreign tax law or any other applicable legal requirement. To the extent that
amounts are so deducted or withheld by the Exchange Agent, the Surviving
Corporation or Larscom, as the case may be, such deducted or withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of VINA Common Stock in respect of which such deduction and
withholding was made by the Exchange Agent, the Surviving Corporation or
Larscom, as the case may be.
(h) Lost Certificates. In the event that any Certificate
shall have been lost, stolen or destroyed, the Exchange Agent may require the
stockholder of such lost, stolen or destroyed Certificate, in exchange for such
lost, stolen or destroyed Certificate, to make and deliver an affidavit of that
fact and provide such other documentation and pay such fees, or post such bonds,
as is the customary practice of the Exchange Agent to require, prior to
delivering the certificates representing the shares of Larscom Common Stock into
which the shares of VINA Common Stock represented by such lost, stolen or
destroyed Certificate was converted pursuant to Section 2.1 and cash for
fractional shares, if any, as may be required pursuant to Section 2.2(c) and any
dividends or distributions payable pursuant to Section 2.2(d), in each case
without any
- 8 -
interest thereon; provided, however, that Larscom may, in its discretion and as
a condition precedent to the issuance of such certificates representing shares
of Larscom Common Stock and other distributions, require the owner of such lost,
stolen or destroyed Certificate to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Larscom, the Surviving Corporation, or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed; provided, further,
that in no event shall Larscom be required to pay any fee or post any bond
referred to in this Section 2.2(h).
2.3 VINA Stock Plans and VINA Warrants.
(a) At the Effective Time, each outstanding option to
purchase VINA Common Stock under any of VINA's 1996 Stock Plan (the "VINA 1996
PLAN"), VINA's Amended and Restated 1998 Stock Plan (the "VINA 1998 PLAN"),
VINA's 2000 Stock Incentive Plan (the "VINA 2000 PLAN"), the Woodwind
Communications Systems, Inc. ("WOODWIND") 1999 Stock Option Plan (the "WOODWIND
1999 PLAN") and the Woodwind 2000 Stock Option Plan (the "WOODWIND 2000 PLAN")
(collectively, the "VINA STOCK PLANS"), whether vested or unvested and whether
exercisable or unexercisable (each a "VINA STOCK OPTION") and each VINA Warrant
shall be assumed by Larscom and shall thereafter be exercisable, on the same
terms and conditions as were applicable under such VINA Stock Option or VINA
Warrant, as the case may be, prior to the Effective Time (in accordance with the
past practices of VINA with respect to the interpretation and application of
such terms and conditions), except that (i) each VINA Stock Option and VINA
Warrant shall be exercisable (or shall become exercisable in accordance with its
terms) for that number of whole shares of Larscom Common Stock equal to the
product obtained by multiplying (x) the number of shares of VINA Common Stock
that were issuable upon exercise of such VINA Stock Option or VINA Warrant
immediately prior to the Effective Time; by (y) the Exchange Ratio, rounded, in
the case of a VINA Warrant, up, and, in the case of any VINA Stock Option, down,
to the nearest whole number of shares of VINA Common Stock, and (ii) the per
share exercise price for the shares of VINA Common Stock issuable upon exercise
of such assumed VINA Stock Option or VINA Warrant shall be equal to the quotient
determined by dividing (x) the exercise price per share of VINA Common Stock at
which such VINA Stock Option or VINA Warrant was exercisable immediately prior
to the Effective Time, by (y) the Exchange Ratio, rounded up to the nearest
whole cent.
(b) The parties intend that, to the extent that any VINA
Stock Option constituted an incentive stock option immediately prior to the
Effective Time, such option continues to qualify as an incentive stock option to
the maximum extent permitted by Section 422 of the Code, and the assumption of
the VINA Stock Option provided in Section 2.3(a) satisfy the conditions of
Section 424(a) of the Code. Holders of VINA Stock Options or VINA Warrants will
not be entitled to acquire shares of VINA Common Stock after the Merger. In
addition, prior to the Effective Time, VINA will make any amendments to the
terms of such VINA Stock Plans or arrangements that are necessary to give effect
to the transactions contemplated by this Section 2.3.
(c) As soon as practicable after the Effective Time,
Larscom shall deliver to the participants in the VINA Stock Plans and holders of
VINA Warrants an appropriate notice evidencing the foregoing assumption of such
VINA Stock Options or VINA Warrants, as the
- 9 -
case may be, and setting forth such participants' rights in the VINA Stock
Options and VINA Warrants, as provided in this Section 2.3.
(d) Larscom shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Larscom Common Stock for
delivery upon exercise of VINA Stock Options and VINA Warrants assumed in
accordance with this Section 2.3. Within ten (10) business days after the
Effective Time, Larscom shall file one or more registration statements on Form
S-8 (or any successor form) with respect to the shares of Larscom Common Stock
subject to such VINA Stock Options (to the extent a Form S-8 is available for
such options) and shall maintain the effectiveness of such registration
statement or registrations statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such VINA Stock
Options remain outstanding.
(e) The rights of participants in the VINA 2000 Employee
Stock Purchase Plan (the "VINA ESPP") with respect to any offering then underway
under the VINA ESPP shall be determined by treating the last business day prior
to the Effective Time as the last day of such offering and by making such other
pro rata adjustments as may be necessary to reflect the shortened offering but
otherwise treating such shortened offering as a fully effective and completed
offering for all purposes under the VINA ESPP. Outstanding rights to purchase
shares of VINA Common Stock shall be exercised in accordance with Section 8 of
the VINA ESPP, and each share of VINA Common Stock purchased pursuant to such
exercise shall by virtue of the Merger, and without any action on the part of
the holder thereof, be converted into the right to receive a number of shares of
Larscom Common Stock in accordance with Section 2.1(b) hereof without issuance
of certificates representing issued and outstanding shares of VINA Common Stock
to participants under the VINA ESPP. As of the Effective Time, the VINA ESPP
shall be terminated. Prior to the Effective Time, VINA shall (i) provide Larscom
with evidence that the VINA ESPP has been terminated pursuant to resolutions of
VINA's Board; the form and substance of such resolutions shall be subject to
prior review and approval of Larscom (the approval of which shall not be
unreasonably withheld) and (ii) take such other actions (including, but not
limited to, if appropriate, amending the VINA ESPP) that are necessary to give
effect to the transaction contemplated by this Section 2.3(e).
2.4 Taking Necessary and Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purpose of this Agreement and to vest the Surviving Corporation with the full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of VINA and the Transitory Subsidiary, the officers and directors
of VINA and the Transitory Subsidiary will take all such reasonable, lawful and
necessary action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXX
XXXX represents and warrants to Larscom and the Transitory Subsidiary
that the statements contained in this Article III are true and correct, except
as expressly set forth herein or in the disclosure schedule delivered by VINA to
Larscom on the date of this Agreement (the "VINA DISCLOSURE SCHEDULE").
- 10 -
3.1 Organization, Standing and Power. VINA is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as presently proposed to be conducted,
and is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the character of the properties it owns,
operates or leases or the nature of its activities makes such qualification
necessary, except for such failures to be so organized, qualified or in good
standing, individually or in the aggregate, which have not had, and are not
reasonably likely to have a VINA Material Adverse Effect. For purposes of this
Agreement, the term "VINA MATERIAL ADVERSE EFFECT" means any material adverse
change, event, circumstance or development with respect to, or material adverse
effect on, the business, assets, liabilities, capitalization, condition
(financial or other), or results of operations of VINA and its Subsidiaries,
taken as a whole; provided, however, that none of the following shall, in and of
itself, be taken into account when determining whether there has been, or will
be, a VINA Material Adverse Effect: (i) any failure by VINA to meet or exceed
analysts' published revenues or earnings predictions or any change in VINA's
stock price or trading volume, (ii) with respect to the use of the term "VINA
MATERIAL ADVERSE EFFECT" in the representations and warranties contained in
Section 3.8, any effect resulting from the announcement or pendency of this
Agreement or the Merger, or (iii) other than with respect to the use of the term
"VINA Material Adverse Effect" in the representations and warranties contained
in Section 3.7, any effect that results from changes affecting generally the
industry or industries in which VINA or any of its Subsidiaries participates,
the U.S. economy as a whole or foreign economies in any locations where VINA or
any of its Subsidiaries has material operations, or sales or customers unless
such condition shall disproportionately adversely affect VINA or any of its
Subsidiaries.
3.2 Charter Documents. VINA has previously furnished or made
available to Larscom a complete and correct copy of its (i) Certificate of
Incorporation and Bylaws as amended to date (together, the "VINA CHARTER
DOCUMENTS") and (ii) Subsidiaries' Certificate of Incorporation, or equivalent
organizational documents, and Bylaws, or equivalent organizational documents.
Such VINA Charter Documents and equivalent organizational documents of each of
its Subsidiaries are in full force and effect. VINA is not in violation of any
of the provisions of the VINA Charter Documents, and no Subsidiary of VINA is in
violation of its equivalent organizational documents.
3.3 Capitalization.
(a) The authorized capital stock of VINA consists of
125,000,000 shares of VINA Common Stock, $0.0001 par value per share, of which
there were 62,189,930 shares issued and outstanding as of the close of business
on March 14, 2003, and 5,000,000 shares of preferred stock, $0.0001 par value
per share ("VINA PREFERRED STOCK"), of which no shares were outstanding. As of
the close of business on March 14, 2003, (i) 200,000 shares of VINA Preferred
Stock, designated Series A Junior Participating Preferred Stock, were reserved
for future issuance upon exercise of the VINA Rights pursuant to the VINA Rights
Plan; (ii) no shares of VINA Common Stock were held in the treasury for VINA;
(iii) 282,400 shares of VINA Common Stock were reserved for future issuance
pursuant to the VINA 1996 Stock Plan and 282,400 shares were subject to
outstanding options; (iii) 1,395,626 shares of VINA Common Stock were reserved
for future issuance pursuant to the VINA 1998 Stock Plan and
- 11 -
1,395,626 shares were subject to outstanding options; (iv) 14,782,286 shares of
VINA Common Stock were reserved for future issuance pursuant to the VINA 2000
Plan and 5,075,039 shares were subject to outstanding options; (v) 648,250
shares of VINA Common Stock were reserved for future issuance pursuant to the
VINA ESPP and 513,029 shares were subject to outstanding purchase rights; (vi)
no shares of VINA Common Stock were reserved for future issuance pursuant to the
Woodwind 1999 Plan and no shares were subject to outstanding options; (vii) no
shares of VINA Common Stock were reserved for future issuance pursuant to the
Woodwind 2000 Plan and no shares were subject to outstanding options; and (viii)
7,090,000 shares of VINA Common Stock were reserved for future issuance upon the
exercise of outstanding warrants (the "VINA WARRANTS").
(b) Section 3.3(b) of the VINA Disclosure Schedule lists
all issued and outstanding shares of VINA Common Stock that constitute
restricted stock or that are otherwise subject to a repurchase or redemption
right or right of first refusal in favor of VINA, indicating the name of the
applicable stockholder, the vesting schedule for any such shares, including the
extent to which any such repurchase or redemption right or right of first
refusal has lapsed as of the date of this Agreement, the price at which such
stock can be repurchased and redeemed and whether (and to what extent) the
vesting will be accelerated in any way by the Merger or by termination of
employment or change in position following consummation of the Merger.
(c) Section 3.3(c) of the VINA Disclosure Schedule sets
forth a complete and accurate list, as of the date of this Agreement, of all
VINA Stock Options, indicating with respect to each such VINA Stock Option the
name of the holder thereof, the VINA Stock Plan under which it was granted, the
number of shares of VINA Common Stock subject to such VINA Stock Option, the
exercise price, the date of grant and expiration, and the vesting schedule,
including the vesting commencement date and whether (and to what extent) the
vesting will be accelerated in any way by the Merger or by termination of
employment or change in position following consummation of the Merger. All VINA
Stock Options have been granted under one of the VINA Stock Plans. VINA has not
granted any VINA Stock Options from and including March 14, 2003 through and
including the date of this Agreement. Except for shares of VINA Common Stock
issued upon exercise of VINA Stock Options and VINA Warrants outstanding as of
Xxxxx 00, 0000, XXXX has not issued any shares of VINA Common Stock or VINA
Preferred Stock from and including March 14, 2003 through and including the date
of this Agreement. VINA has provided or made available to Larscom complete and
accurate copies of all VINA Stock Plans and the forms of all stock option
agreements evidencing VINA Stock Options and VINA Warrants. Except as set forth
in Section 3.3(c) of the VINA Disclosure Schedule, no acceleration of vesting,
exercise, or repurchase of any VINA Stock Option or VINA Warrant will occur as a
result of or in connection with the Merger or by termination of employment or
change in position following consummation of the Merger.
(d) Except as set forth in Section 3.3(d) of the VINA
Disclosure Schedule, there are no equity securities or other similar ownership
interests of any class or series of capital stock of VINA, or any securities
convertible into or exercisable or exchangeable for such equity securities or
other similar ownership interests issued, reserved for issuance or outstanding.
Except for securities VINA owns, directly or indirectly through any of its
Subsidiaries, there are no equity securities, partnership interests or other
similar ownership interests of any class or series of capital stock of any
Subsidiary of VINA, or any securities convertible into or
- 12 -
exercisable or exchangeable for such equity securities, partnership interests or
other similar ownership interests issued, reserved for issuance or outstanding.
There are no options, warrants, equity securities, partnership interests or
other similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any kind or character to which VINA or any of its
Subsidiaries is a party or by which VINA or any of its Subsidiaries is bound
obligating VINA or any of its Subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or
cause the repurchase, redemption or acquisition, of any shares of capital stock
of VINA or any of its Subsidiaries or obligating VINA or any of its Subsidiaries
to grant, extend, accelerate the vesting of or enter into any such option,
warrant, equity security, partnership interest or other similar ownership
interest, call, right, commitment or agreement. There are no outstanding stock
appreciation, phantom stock or similar rights with respect to VINA or any of its
Subsidiaries.
(e) Except for the VINA Rights Plan and except as set
forth in Section 3.3(e) of the VINA Disclosure Schedule, there is no agreement,
written or oral, between VINA or any Affiliate of VINA and any holder of the
securities of VINA relating to the sale or transfer (including agreements
relating to rights of first refusal, co-sale rights or "drag-along" rights),
registration under the Securities Act of 1933, as amended (together with the
rules and regulations promulgated thereunder, the "SECURITIES ACT"), or voting,
of the capital stock of VINA. Except as set forth in Section 3.3(e) of the VINA
Disclosure Schedule, there is no rights agreement, "poison pill" anti-takeover
plan or other agreement or understanding to which VINA is a party or by which it
is bound with respect to any equity security of any class of VINA. For purposes
of this Agreement, the term "AFFILIATE" when used with respect to any party
means any person who is an "affiliate" of that party within the meaning of Rule
405 promulgated under the Securities Act.
(f) All outstanding shares of VINA Common Stock are and
all shares of VINA Common Stock subject to issuance as specified in Section
3.3(a) above will be upon issuance (on the terms and conditions specified in the
instruments pursuant to which they are issuable), duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL, VINA's
Charter Documents or any agreement to which VINA is a party or is otherwise
bound. All outstanding shares of capital stock, the VINA Stock Options, the VINA
Warrants and other securities of VINA and its Subsidiaries have been issued and
granted in compliance on all material respects with all applicable securities
laws and other applicable laws and all requirements set forth in any applicable
contracts.
(g) No consent of the holders of VINA Stock Options is
required in connection with the actions contemplated by Section 2.3.
(h) Except as set forth in Section 3.3(h) of the VINA
Disclosure Schedule, stockholders of VINA are not entitled to dissenters' or
appraisal rights under applicable state law in connection with the Merger.
- 13 -
3.4 Subsidiaries.
(a) Section 3.4 of the VINA Disclosure Schedule sets
forth, for each Subsidiary of VINA: (i) its name; (ii) the number and type of
outstanding equity securities owned of record and beneficially by VINA (as well
as securities exchangeable or exercisable for and convertible into equity
securities thereby) and a list of the holders thereof and the identity of, and
the percentage of outstanding equity securities owned of record and
beneficially, by, any other stockholder of a Subsidiary of VINA; and (iii) the
jurisdiction of organization. For purposes of this Agreement, the term
"SUBSIDIARY" means, with respect to any party, any corporation, partnership,
trust, limited liability company or other non-corporate business enterprise in
which such party (or another Subsidiary of such party) holds stock or other
ownership interests representing (A) more that 50% of the voting power of all
outstanding stock or ownership interests of such entity or (B) the right to
receive more than 50% of the net assets of such entity available for
distribution to the holders of outstanding stock or ownership interests upon a
liquidation or dissolution of such entity.
(b) Each Subsidiary of VINA is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as presently proposed to be conducted,
and is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the character of its properties owned,
operated or leased or the nature of its activities makes such qualification
necessary, except for such failures to be so organized, qualified or in good
standing that, individually or in the aggregate, have not had, and are not
reasonably likely to have, a VINA Material Adverse Effect. All of the
outstanding shares of capital stock and other equity securities or interests of
each Subsidiary of VINA are duly authorized, validly issued, fully paid,
nonassessable and not subject to or were not issued in violation of any purchase
option, call option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of applicable law, such
Subsidiary's charter documents or any agreement to which such Subsidiary is a
party or is otherwise bound, and all such shares are owned, of record and
beneficially, by VINA or another of its Subsidiaries free and clear of all
security interests, liens, claims, pledges, agreements, limitations in VINA's
voting rights, charges or other Liens of any nature. There are no voting trusts,
proxies or other agreements or understandings with respect to the voting of any
capital stock of any Subsidiary of VINA.
(c) VINA does not control directly or indirectly or have
any direct or indirect equity participation or similar interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business association or entity, which is not a Subsidiary of VINA. Except
as set forth in Section 3.4(c) of the VINA Disclosure Schedule, there are no
obligations, contingent or otherwise, of VINA or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of any
Subsidiary of VINA or to provide funds to or make any material investment (in
the form of a loan, capital contribution or otherwise) in any Subsidiary of VINA
or any other entity).
- 14 -
3.5 Authority; No Conflict; Required Filings and Consents.
(a) VINA has all requisite corporate power and authority
to execute and deliver this Agreement, subject only to the adoption of this
Agreement and approval of the Merger (the "VINA VOTING PROPOSAL") by VINA's
stockholders under the DGCL and the rules of The Nasdaq Stock Market, Inc. and
applicable law (the "VINA STOCKHOLDER APPROVAL"), to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, the VINA Board, at a meeting
duly called and held, by the unanimous vote of all directors (i) determined that
the Merger is fair, advisable and in the best interests of VINA and its
stockholders, (ii) adopted and approved this Agreement in accordance with the
provisions of the DGCL and the VINA Charter Documents, (iii) approved the VINA
Voting Agreement and the transactions contemplated thereby, and (iv) directed
that this Agreement and the VINA Voting Proposal be submitted to the
stockholders of VINA for their adoption and approval and resolved to recommend
that the stockholders of VINA vote in favor of the adoption of this Agreement
and the approval of the VINA Voting Proposal. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby by VINA
have been duly authorized by all necessary corporate action on the part of
VINA, subject only to the required receipt of the VINA Stockholder Approval.
This Agreement has been duly executed and delivered by VINA and constitutes the
valid and binding obligation of VINA, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (the "BANKRUPTCY AND EQUITY
EXCEPTION"). No takeover statute or similar statute or regulation applies to the
Merger, this Agreement or any of the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by VINA
do not, and the consummation by VINA of the transactions contemplated by this
Agreement shall not, (i) conflict with, or result in any violation or breach of,
any provision of the Certificate of Incorporation or Bylaws of VINA or of the
charter, bylaws, or other organizational document of any Subsidiary of VINA,
(ii) conflict with, or result in any violation or breach of, or constitute (with
or without notice or lapse of time, or both) a default (or give rise to a right
of termination, cancellation or acceleration of any obligation or loss of any
material benefit) under, or require a consent or waiver under, constitute a
change in control under, require the payment of a penalty under or result in the
imposition of any mortgages, security interests, pledges, liens, charges or
encumbrances of any nature ("LIENS") on VINA's or any of its Subsidiaries'
assets under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, license, contract or other agreement, instrument or
obligation to which VINA or any of its Subsidiaries is a party or by which any
of them or any of their properties or assets may be bound, or (iii) subject to
obtaining the VINA Stockholder Approval and compliance with the requirements
specified in clauses (i) through (vi) of Section 3.5(c), conflict with or
violate any permit, concession, franchise, license, judgment, injunction, order,
decree, statute, law, ordinance, rule or regulation applicable to VINA or any of
its Subsidiaries or any of its or their properties or assets, except in the case
of clauses (ii) and (iii) of this Section 3.5(b), for any such conflicts,
violations, breaches, defaults, terminations, cancellations, accelerations or
losses which, individually or in the aggregate, are not, reasonably likely to
have a VINA Material Adverse Effect. Section 3.5(b) of the VINA Disclosure
Schedule lists all consents, waivers and approvals under any of VINA's or any of
its Subsidiaries' agreements, licenses or leases required
- 15 -
to be obtained in connection with the consummation of the transactions
contemplated hereby, which, if individually or in the aggregate were not
obtained, would result in a material loss of benefits to VINA, Larscom or the
Surviving Corporation as a result of the Merger or a VINA Material Adverse
Effect.
(c) No consent, approval, license, permit, order or
authorization of, or registration, declaration, notice or filing with, any
court, arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority, agency or instrumentality (a "GOVERNMENTAL
ENTITY") is required by or with respect to VINA or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by VINA or the
performance by VINA of the transactions contemplated by this Agreement, except
for (i) applicable requirements, if any, of the Securities Act or the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "EXCHANGE ACT"), (ii) the filing of the Certificate
of Merger and Certificate of Ownership and Merger with the Delaware Secretary of
State and appropriate corresponding documents with the appropriate authorities
of other states in which VINA is qualified as a foreign corporation to transact
business, (iii) the filing of such reports, schedules or materials under Section
13 of or Rule 14a-12 under the Exchange Act and materials under Rule 165 and
Rule 425 of the Securities Act as may be required in connection with this
Agreement and the transactions contemplated hereby, (iv) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws ("BLUE SKY LAWS") and the
laws of any foreign country, (v) the rules and regulations of The Nasdaq Stock
Market, Inc. and (vi) such consents, authorizations, orders, filings, approvals
and registrations which, if not obtained or made, would not be reasonably likely
to have a VINA Material Adverse Effect.
(d) The affirmative vote for adoption of the VINA Voting
Proposal by the holders of a majority of the outstanding shares of VINA Common
Stock on the record date for the meeting of VINA's stockholders to consider the
VINA Voting Proposal (the "VINA MEETING") present or represented by proxy is the
only vote of the holders of any class or series of VINA's capital stock or other
securities necessary to approve the VINA Voting Proposal. There are no bonds,
debentures, notes or other indebtedness of VINA having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of VINA may vote.
3.6 SEC Filings; Financial Statements; Information Provided.
(a) VINA has filed all registration statements, forms,
reports and other documents required to be filed by VINA with the Securities and
Exchange Commission ("SEC") since August 10, 2000 and has made available to
Larscom copies of all registration statements, forms, reports and other
documents (including, without limitation, all certifications and statements
required by Rule 13a-14 or 15d-14 under the Exchange Act or Section 906 of the
Xxxxxxxx-Xxxxx Act of 2002) filed by VINA with or furnished to the SEC since
such date, all of which (other than the certifications pursuant to said Section
906) are available on the SEC's XXXXX system. All such required registration
statements, forms, reports and other documents (including those that VINA may
file after the date hereof until the Closing) are referred to herein as the
"VINA SEC REPORTS." Except as set forth in Section 3.6 of the VINA Disclosure
Schedule, the VINA SEC Reports (i) were or will be filed on a timely basis, (ii)
at the time filed,
- 16 -
were or will be prepared in compliance with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such VINA SEC Reports, and (iii)
did not or will not at the time they were or are filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such VINA SEC Reports or necessary in order to make the statements in
such VINA SEC Reports, in the light of the circumstances under which they were
made, not misleading. No Subsidiary of VINA is subject to the reporting
requirements of Sections 13(a) or 15(d) of the Exchange Act.
(b) Each of the audited consolidated financial statements
(including, in each case, any related notes and schedules) and unaudited interim
consolidated financial statements contained or to be contained in VINA SEC
Reports at the time filed (i) complied or will comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, (ii) were or will be prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes to such financial statements or, in the case of unaudited
interim financial statements, as permitted by the SEC on Form 10-Q under the
Exchange Act) and (iii) fairly presented or will fairly present the consolidated
financial position of VINA and its Subsidiaries as of the dates indicated and
the consolidated results of VINA and its Subsidiaries' operations and cash flows
for the periods indicated, consistent with the books and records of VINA and its
Subsidiaries, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount. The consolidated, audited balance sheet of
VINA as of December 31, 2002 is referred to herein as the "VINA BALANCE SHEET."
(c) VINA has previously furnished to Larscom a complete
and correct copy of any amendments or modifications, which have not yet been
filed with the SEC but which are required to be filed, to agreements, documents
or other instruments which previously had been filed by VINA with the SEC
pursuant to the Securities Act or the Exchange Act.
- 17 -
3.7 No Undisclosed Liabilities. Except as set forth in Section 3.7
of the VINA Disclosure Schedule, and except for normal and recurring liabilities
incurred since the date of the VINA Balance Sheet in the ordinary course of
business consistent with past practice (the "ORDINARY COURSE OF BUSINESS"), VINA
and its Subsidiaries do not have any liabilities, either accrued, contingent or
otherwise (whether or not required to be reflected in financial statements in
accordance with generally accepted accounting principles), and whether due or to
become due, which individually or in the aggregate are reasonably likely to have
a VINA Material Adverse Effect.
3.8 Absence of Certain Changes or Events. Except as set forth in
Section 3.8 of the VINA Disclosure Schedule or in the VINA SEC Reports, since
the date of the VINA Balance Sheet, VINA and its Subsidiaries have conducted
their respective businesses only in the Ordinary Course of Business and, since
such date, (a) there has not been any change, event, circumstance, development
or effect that individually or in the aggregate has had, or is reasonably likely
to have, a VINA Material Adverse Effect, (b) there has not been any material
damage, destruction or other casualty loss with respect to any material asset or
property owned, leased or otherwise used by VINA or any of its Subsidiaries,
whether or not covered by insurance, (c) neither VINA nor any of its
Subsidiaries has declared, accrued, set aside or paid any dividend or made any
other distribution in respect of any shares of capital stock or other similar
ownership interests or repurchased, redeemed or otherwise reacquired any shares
of capital stock or other securities or other similar ownership interests, (d)
neither VINA nor any of its Subsidiaries has changed any of its methods of
accounting or accounting practices in any material respect, (e) neither VINA nor
any of its Subsidiaries has made any material Tax elections and (f) neither VINA
nor any of its Subsidiaries has agreed or committed to take any of the actions
referred to in clauses (c) through (e) above.
3.9 Taxes.
(a) For the purposes of this Agreement, "TAX" or "TAXES"
refers to any and all federal, state, local and foreign taxes, assessments and
other governmental charges, duties, impositions and liabilities relating to
taxes, including, without limitation, taxes based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under any agreements or
arrangements with any other person with respect to such amounts and including
any liability for Taxes as a transferee or successor, by contract or otherwise.
(b) VINA and each of its Subsidiaries have timely filed
all material federal, state, local and foreign returns, estimates, information
statements, reports, elections and all other filings ("RETURNS") relating to
Taxes required to be filed by VINA and each of its Subsidiaries with any Tax
authority. Such Returns are true and correct in all material respects,
accurately reflect the liability for Taxes of VINA and each of its Subsidiaries,
and have been completed in accordance with applicable law, and VINA and each of
its Subsidiaries have paid or withheld and paid to the appropriate governmental
body all Taxes shown to be due on such Returns.
- 18 -
(c) Neither VINA nor any of its Subsidiaries has been
delinquent in the payment of any material Tax nor is there any material Tax
deficiency outstanding, proposed or assessed against VINA or any of its
Subsidiaries, nor has VINA or any of its Subsidiaries executed any unexpired
waiver or extension of any statute of limitations on or extending the period for
the assessment or collection of any Tax, nor has any such waiver or extension
been requested from VINA or any of its Subsidiaries other than an extension
resulting from the filing of a Tax Return after its due date in the Ordinary
Course of Business.
(d) No audit, action, suit or other examination of any
Return of VINA or any of its Subsidiaries by any Tax authority is presently in
progress, nor has VINA or any of its Subsidiaries been notified of any request
for such an audit or other examination.
(e) No adjustment relating to any Returns filed by VINA
or any of its Subsidiaries has been proposed in writing formally or informally
by any Tax authority to VINA or any of its Subsidiaries or any representative
thereof and there is no basis for such a claim for which VINA or any of its
Subsidiaries should be aware.
(f) None of VINA and its Subsidiaries (i) has been a
member of an affiliated group filing a consolidated federal income Tax Return
(other than a group the common parent of which was VINA) or (ii) has any
liability for the Taxes of any person (other than VINA and its Subsidiaries)
under Treasury Regulation 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or otherwise.
(g) Neither VINA nor any of its Subsidiaries has any
liability for any material unpaid Taxes which has not been accrued for or
reserved on VINA balance sheet dated December 31, 2002, (i) in accordance with
GAAP, whether asserted or unasserted, contingent or otherwise, other than any
liability for unpaid Taxes that may have accrued since December 31, 2002 in
connection with the operation of the business of VINA and its Subsidiaries in
the ordinary course or (ii) that would result in a material decrease in the net
worth of VINA or any such Subsidiary.
(h) Neither VINA nor any of its Subsidiaries has, within
the two (2) year period ending on the Effective Time, made a distribution to
which Code Section 355 applies.
(i) No consent under Section 341(f) of the Code has been
filed with respect to VINA or any of its Subsidiaries.
(j) Neither VINA nor any of its Subsidiaries is, or has
been, at any time, 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.
3.10 Owned and Leased Real Properties.
(a) Neither VINA nor any of its Subsidiaries owns or has
ever owned any real property.
(b) Section 3.10 of the VINA Disclosure Schedule sets
forth a complete and correct list of all real property leased, subleased,
licensed or occupied by VINA or any of its
- 19 -
Subsidiaries (collectively the "VINA LEASES") and the location of the premises.
The premises subject to the VINA Leases are hereinafter referred to as "VINA
LEASED PROPERTY." Except as set forth in Section 3.10(b) of the VINA Disclosure
Schedule, neither VINA, nor any of its Subsidiaries nor, to VINA's knowledge,
any other party is in default under any of the VINA Leases (nor does there exist
any condition which, upon the passage of time or the giving of notice or both,
would cause a default). Except as set forth in Section 3.10 of the VINA
Disclosure Schedule, no property subject to a VINA Lease is occupied by a third
party other than VINA, and, to VINA's knowledge, no third party has a right to
occupy such property other than VINA. VINA has provided to Larscom complete and
correct copies of all VINA Leases, including all amendments thereto; no term or
condition of any of the VINA Leases has been modified, amended or waived except
as shown in such copies; and there are no other agreements or arrangements
whatsoever relating to VINA's or its Subsidiaries' use or occupancy of any of
the VINA Leased Property. VINA has not transferred, mortgaged or assigned any
interest in any of the VINA Leases. VINA or its Subsidiaries occupies all of the
VINA Leased Property except as identified in Section 3.10 of the VINA Disclosure
Schedule. To VINA's knowledge, there is no pending or threatened condemnation or
similar proceeding affecting any VINA Leased Property or any portion thereof,
each VINA Leased Property is supplied with utilities and other services
sufficient to operate the business of VINA as presently conducted and neither
the operations of the VINA on the VINA Leased Property, nor the VINA Leased
Property, violate in any material manner any applicable building code, zoning
requirement, or classification or statute relating to the particular property or
such operations. The VINA Leased Property is in good operating condition and
repair and is suitable for the conduct of business as presently conducted
therein.
3.11 Intellectual Property.
(a) VINA and its Subsidiaries own, license or otherwise
possess legally enforceable rights to use all Intellectual Property used in or
necessary to conduct the business of VINA and its Subsidiaries as currently
conducted. For purposes of this Agreement, the term "INTELLECTUAL PROPERTY"
means any or all of the following and all rights in, arising out of, or
associated therewith: (i) all United States, international and foreign patents
and applications therefor and all reissues, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof; (ii) all
inventions (whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know how, technology, technical data and
customer lists, and all documentation relating to any of the foregoing; (iii)
all copyrights, copyrights registrations and applications therefor, and all
other rights corresponding thereto throughout the world; (iv) all industrial
designs and any registrations and applications therefor throughout the world;
(v) all mask works and any registrations and applications therefor throughout
the world (vi) all trade names, logos, URLs, common law trademarks and service
marks, trademark and service xxxx registrations and applications therefor
throughout the world; (vii) all databases and data collections and all rights
therein throughout the world; (viii) all moral and economic rights of authors
and inventors, however denominated, throughout the world, and (ix) any similar
or equivalent rights to any of the foregoing anywhere in the world.
(b) Section 3.11(b) of the VINA Disclosure Schedule
accurately identifies, as of the date of this Agreement, all licenses,
sublicenses, and other agreements pursuant to which VINA or any of its
Subsidiaries is authorized or licensed to use any third party Intellectual
- 20 -
Property (i) for incorporation or embedding into VINA's or any of its
Subsidiaries' products, (ii) in conjunction with, or in the development of,
VINA's or any of its Subsidiaries' products, or (iii) that is otherwise material
to the conduct of the business of VINA or any of its Subsidiaries as currently
conducted (it being understood that (1) shrink wrap or "click and accept"
licenses for "off-the-shelf" software programs, and (2) agreements providing for
future license fees, royalties, or other payment obligations by VINA or any of
its Subsidiaries that do not exceed $10,000 annually per agreement (other than
contingent or unliquidated amounts) will not be considered to be agreements to
which reference is made in clauses (ii) and (iii) of this Section 3.11(b))
(collectively, the "VINA MATERIAL INBOUND LICENSES").
(c) Section 3.11(c) of the VINA Disclosure Schedule
accurately identifies, as of the date of this Agreement, all licenses,
sublicenses, and other agreements pursuant to which (i) any third party has been
granted any exclusive license under, or otherwise has received or acquired any
exclusive right or interest in, any VINA Intellectual Property, or (ii) any
third party has been granted any non-exclusive license under, or otherwise has
received or acquired any non-exclusive right or interest in, any VINA
Intellectual Property and pursuant to which such third party had or has
aggregate license fee or royalty payment obligations (other than contingent or
unliquidated amounts) in excess of $10,000 annually (collectively, the "VINA
MATERIAL OUTBOUND LICENSES" and, together with the VINA Material Inbound
Licenses, the "VINA MATERIAL LICENSES"). As used xxxxxx, "XXXX INTELLECTUAL
PROPERTY" means any Intellectual Property that is owned by, or purported to be
owned by, VINA or any of its Subsidiaries.
(d) Section 3.11(d) of the VINA Disclosure Schedule sets
forth, as of the date of this Agreement, a complete and accurate list of each
patent, patent application, copyright registration or application therefor, and
registered trademark or service xxxx (including, where applicable, the
jurisdiction of issuance or application) of VINA or any of its Subsidiaries. All
issued patents and registered trademarks, service marks, and copyrights, which
are held by, or registered in the name of, VINA or any of its Subsidiaries, are
valid and in full force and effect. VINA and each of its Subsidiaries has, in a
timely manner, taken all reasonable actions (including, without limitation, the
payment of any applicable fees) necessary to ensure that that all applications
filed by or on behalf of VINA or any of its Subsidiaries for any patent,
trademark, service xxxx, copyright, or other form of Intellectual Property
remain in full force and effect. VINA and each of its Subsidiaries has taken
reasonable measures to maintain the confidentiality of and otherwise establish,
protect, and enforce its rights in the VINA Intellectual Property that VINA or
any of its Subsidiaries holds, or purports to hold, as a trade secret.
(e) VINA and its Subsidiaries exclusively own all right,
title, and interest to and in the VINA Intellectual Property free and clear of
all Liens (other than non-exclusive licenses under the VINA Intellectual
Property granted by VINA, its Subsidiaries, or their predecessors in the
Ordinary Course of Business). Without limiting the generality of the foregoing,
except as set forth in Section 3.11(e) of the VINA Disclosure Schedule, each
person who is or was an employee or contractor of VINA or any of its
Subsidiaries and who is or was involved in the creation or development of
Intellectual Property for VINA or any of its Subsidiaries has signed a valid,
enforceable agreement containing an assignment of the Intellectual Property so
created or developed to VINA or one of its Subsidiaries and confidentiality
provisions protecting VINA's or its Subsidiaries' confidential information.
- 21 -
(f) To VINA's knowledge, VINA and each of its
Subsidiaries have never infringed, misappropriated, or otherwise violated any
Intellectual Property of any third party. Without limiting the generality of the
foregoing and solely to VINA's knowledge, neither (i) the products previously or
currently sold or under development by VINA or any of its Subsidiaries, or (ii)
the business or activities previously or currently conducted by VINA or any of
its Subsidiaries, has infringed, violated, or constituted a misappropriation of
any Intellectual Property of any third party. Except as set forth in Section
3.11(f) of the VINA Disclosure Schedule, neither VINA nor any of its
Subsidiaries has received any complaint, claim, or notice alleging any such
infringement, violation, or misappropriation. Except as set forth in Section
3.11(f) of the VINA Disclosure Schedule, neither VINA nor any of its
Subsidiaries has received any requests or demands since January 1, 2000, by
third parties for the licensing of such third party's patents, copyrights,
trademarks or other Intellectual Property or proprietary rights. Except as set
forth in Section 3.11(f) of the VINA Disclosure Schedule, VINA and its
Subsidiaries have never assumed, or agreed to discharge or otherwise take
responsibility for, any existing or potential liability of any third party for
infringement, misappropriation, or violation of any Intellectual Property. To
VINA's knowledge, no other person or entity has infringed, violated, or
misappropriated, and no other person or entity is currently, infringing,
violating, or misappropriating, any material VINA Intellectual Property or any
Intellectual Property that VINA or any of its Subsidiaries is authorized or
licensed to use under any VINA Material Inbound License.
(g) To VINA's knowledge, none of the software (including
firmware and other software embedded in hardware devices) developed (or
currently being developed), distributed, licensed, or sold by VINA or any of its
Subsidiaries (collectively, the "VINA SOFTWARE") contains any bug, defect, or
error that materially and adversely affects the use, functionality, or
performance of such VINA Software or any product or system containing or used in
conjunction with such VINA Software. To VINA's knowledge, no VINA Software
contains any "back door," "drop dead device," "time bomb," "Trojan horse,"
"virus," or "worm" (as such terms are commonly understood in the software
industry) or any other code designed or intended to have, or capable of
performing, any of the following functions: (i) disrupting, disabling, harming,
or otherwise impeding in any manner the operation of, or providing unauthorized
access to, a computer system or network or other device on which such code is
stored or installed; or (ii) damaging or destroying any data or file without the
user's consent. No source code for any VINA Software has been delivered,
licensed, or made available to any escrow agent or other person or entity. To
VINA's knowledge, no event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time) will, or could reasonably
be expected to, result in the delivery, license, or disclosure of the source
code for any VINA Software to any other person.
(h) The execution and delivery of this Agreement and
consummation of the Merger will not result in (i) the breach of, or create on
behalf of any third party the right to terminate or modify, any VINA Material
Inbound License, (ii) a loss of, or Lien on, any VINA Intellectual Property,
(iii) the release, disclosure, or delivery of any VINA Intellectual Property by
or to any escrow agent or other person, (iv) the grant, assignment, or transfer
to any other person of any license or other right or interest under, to, or in
any of the VINA Intellectual Property, (v) either Larscom, the Surviving
Corporation, or any of their Subsidiaries being bound by or subject to, as a
result of VINA's contracts and other legal obligations, any non-compete or
- 22 -
other restriction on the operation or scope of their respective businesses, or
(vi) Larscom, the Surviving Corporation, or any of their Subsidiaries being
obligated to pay any royalties or other amounts to any third party in excess of
those payable by VINA or the Surviving Corporation, respectively, prior to the
Closing.
3.12 Agreements, Contracts and Commitments.
(a) Except as set forth in Section 3.12(a) of the VINA
Disclosure Schedule and other than those material contracts identified on the
Exhibit index of VINA's Annual Report on Form 10-K for the year ended December
31, 2002, there are no contracts or agreements that are material contracts (as
defined in Item 601(b)(10) of Regulation S-K) with respect to VINA and its
Subsidiaries (such contracts or agreements, together with any VINA Material
Licenses, any contracts or agreement listed or required to be listed in Section
3.12(d) of the VINA Disclosure Schedule, any contract or agreement with a
material customer or supplier and any other contract or agreement that is
material to the business of VINA or any of its Subsidiaries (the "VINA MATERIAL
CONTRACTS"). Each VINA Material Contract is in full force and effect and is
enforceable in accordance with its terms, subject to the Bankruptcy and Equity
Exception. Neither VINA nor any of its Subsidiaries nor, to VINA's knowledge,
any other party to any VINA Material Contract is in material violation of or in
material default under any VINA Material Contract, nor, to VINA's knowledge, has
any event occurred or circumstance or condition exists, that (with or without
notice or lapse of time) would reasonably be expected to (i) result in a
material violation of or material default under any VINA Material Contract, (ii)
give any party the right to cancel or terminate or modify any VINA Material
Contract or (iii) give any party the right to seek material damages or other
material remedies.
(b) Section 3.12(b) of the VINA Disclosure Schedule sets
forth a complete and accurate list of each contract or agreement to which VINA
or any of its Subsidiaries is a party or bound by with any Affiliate of VINA
(other than any Subsidiary, which is a direct or indirect wholly owned
subsidiary of VINA). Complete and accurate copies of all the agreements,
contracts and arrangements set forth in Section 3.12(b) of the VINA Disclosure
Schedule have heretofore been furnished or made available to Larscom. Except as
set forth in Section 3.12(b) of the VINA Disclosure Schedule, neither VINA nor
any of its Subsidiaries has entered into any transaction with any Affiliate of
VINA or any of its Subsidiaries or any transaction that would be subject to
proxy statement disclosure pursuant to Item 404 of Regulation S-K.
(c) Except as set forth in Section 3.12(c) of the VINA
Disclosure Schedule, VINA is not a party to any contract, agreement, arrangement
or course of dealing (i) involving future expenditures (whether actual,
potential, fixed or contingent) by VINA or (ii) that requires or may require
VINA to provide services in connection with the sale, upgrade or maintenance of
products to any person after the Closing. Complete and accurate copies of all
contracts listed in Section 3.12(c) of the VINA Disclosure Schedule have been
made available to Larscom.
(d) Except as set forth in Section 3.12(d) of the VINA
Disclosure Schedule, there is no non-competition or other similar agreement,
arrangement, understanding, commitment, judgment, injunction or order to which
VINA or any of its Subsidiaries is a party or to which VINA or any of its
Subsidiaries is subject that has or could reasonably be expected
- 23 -
to have the effect of prohibiting or impairing the conduct of the business of
VINA or any of its Subsidiaries or Larscom or any of its Subsidiaries as
currently conducted and as proposed to be conducted in any material respect.
Neither VINA nor any of its Subsidiaries has entered into (or is otherwise bound
by) any agreement under which it is restricted in any material respect from
selling, licensing or otherwise distributing any of its technology or products,
or providing services to, customers or potential customers or any class of
customers, in any geographic area, during any period of time or any segment of
the market or line of business.
(e) Since January 1, 2000, VINA has not been a party to
any Governmental Contract or Governmental Bid. "GOVERNMENTAL BID" means any
quotation bid or proposal submitted to any Governmental Entity or any proposed
prime contractor or higher-tier subcontractor of any Governmental Entity.
"GOVERNMENT CONTRACT" means any prime contract, subcontract, letter contract,
purchase order or delivery order executed or submitted to or on behalf of any
Governmental Entity or any prime contractor or higher-tier subcontractor, or
under which any Governmental Entity or any such prime contractor or
subcontractor otherwise has or may acquire any right or interest.
3.13 Litigation. Except as set forth in Section 3.13 of the VINA
Disclosure Schedule, there is no action, suit, proceeding, claim, arbitration or
investigation pending or, to the knowledge of VINA, threatened against or
affecting VINA or any of its Subsidiaries or any properties or rights of VINA or
its Subsidiaries, by any person or by or before any Governmental Entity which,
individually or in the aggregate, is reasonably likely to result in material
damages or any injunctive relief against VINA or a Subsidiary. Neither VINA nor
any of its Subsidiaries has commenced any action, suit, proceeding or
arbitration before any Governmental Entity or arbitrator. There are no material
judgments, orders or decrees outstanding against VINA or any of its
Subsidiaries.
3.14 Environmental Matters. VINA and its Subsidiaries (i) have
obtained all permits, licenses and other authorizations that are required under
Environmental Laws ("ENVIRONMENTAL PERMITS") and all such Environmental Permits
are valid and in full force and effect, (ii) are in compliance in all respects
with all terms and conditions of such required Environmental Permits and all
Environmental Laws, (iii) have conducted all Hazardous Material Activities in
compliance with all Environmental Laws, other than, as to each of (i), (ii), and
(iii), such as would not have a VINA Material Adverse Effect. No action,
proceeding, revocation proceeding, amendment procedure, writ, injunction or
claim is pending, or to the knowledge of VINA, threatened, concerning or
relating to any Environmental Permit or any Hazardous Materials Activity of VINA
or any of its Subsidiaries. VINA or any of its Subsidiaries have never received
any notice or other communication (in writing or otherwise) from any
Governmental Body or other Person regarding any actual, alleged, possible or
potential liability arising from or relating to Hazardous Material Activity of
VINA or any of its Subsidiaries. As of the date hereof, except in compliance
with Environmental Laws and in a manner that would not subject VINA or any
Subsidiary of VINA to material liability, to the knowledge of VINA, no
Hazardous Materials are present in, on or under any VINA Business Facility
currently owned, leased, operated or occupied, by VINA or any Subsidiary of VINA
or were present on any other VINA Business Facility at the time it ceased to be
owned, leased, operated or occupied by VINA or any Subsidiary of VINA. VINA or
any of its Subsidiaries have never permitted (knowingly or otherwise) any
Hazardous Material to be generated, manufactured,
- 24 -
produced, used, treated, refined, processed, handled, stored, discharged,
released or disposed of (whether lawfully or unlawfully): (i) on or beneath the
surface of any real property that is, or that has at any time been, owned by,
leased to, controlled by or used by VINA or any Subsidiary of VINA; (ii) in or
into any surface water, groundwater, soil or air associated with or adjacent to
any such real property; or (iii) in or into any well, pit, pond, lagoon,
impoundment, ditch, landfill, building, structure, facility, improvement,
installation, equipment, pipe, pipeline, vehicle or storage container that is or
was located on or beneath the surface of any such real property or that is or
has at any time been owned by, leased to, controlled by or used by VINA or any
Subsidiary of VINA. Each storage tank or other storage container that is or has
been owned by, leased to, controlled by or used by VINA or any of its
Subsidiaries or that is located on or beneath the surface of any real property
owned by, leased to, controlled by or used by VINA or any of its Subsidiaries:
(i) is in sound condition; and (ii) has been demonstrated by accepted testing
methodologies to be free of any corrosion or leaks. For the purposes of this
Section 3.14, "VINA BUSINESS FACILITY" means any property, including the land,
the improvements thereon, the groundwater thereunder and the surface water
thereon, that is or at any time has been owned, operated, occupied, controlled,
used or leased by VINA or any Subsidiary of VINA in connection with the
operation of its business. "ENVIRONMENTAL LAWS" means all applicable Federal,
state, local and foreign laws, regulations, rules and statutes which prohibit,
regulate or control Hazardous Materials or any Hazardous Materials Activity or
which relate to pollution of the environment (including ambient air, surface
water, ground water, land surface or subsurface strata) or the protection of
human health and worker safety. "HAZARDOUS MATERIALS" means any material,
chemical, or substance that is prohibited or regulated by any Environmental Law
or that has been designated by any Governmental Entity to be toxic, radioactive,
hazardous or otherwise a danger to health, reproduction or the environment,
excluding, however, Hazardous Materials contained in products typically used for
office and janitorial purposes properly and safely maintained in accordance with
Environmental Laws. "HAZARDOUS MATERIALS ACTIVITY" is the transportation,
transfer, recycling, storage, use, treatment, manufacture, removal, remediation,
release, exposure of others to, sale, or distribution of any Hazardous Material
or any product containing a Hazardous Material.
3.15 Employees.
(a) To the knowledge of VINA, no employee of VINA or
any Subsidiary of VINA is in violation of any term of any patent disclosure
agreement, non-competition agreement, or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by VINA or
any of its Subsidiaries because of the nature of the business conducted or
presently proposed to be conducted by VINA or any of its Subsidiaries or the
Surviving Corporation following the Effective Time or to the use of trade
secrets or proprietary information of others, the consequences of which,
individually or in the aggregate, are reasonably likely to have a VINA Material
Adverse Effect. Except as set forth in Section 3.15(a) of the VINA Disclosure
Schedule, to the knowledge of VINA, no key employee or group of employees has
any plans to terminate employment with VINA or its Subsidiaries.
(b) Neither VINA nor any of its Subsidiaries is
presently, or has been in the past, bound by or subject to (and none of its
respective assets or properties is bound by or subject to) any arrangement with
any labor union or labor organization. No employees of VINA or any of its
Subsidiaries is represented by any labor union or covered by any collective
bargaining
- 25 -
agreement and, to the knowledge of VINA, there is no pending question
concerning such representation and to the knowledge of VINA there is no campaign
to establish such representation in progress. There is no pending or, to the
knowledge of VINA, threatened labor dispute, walkout, work stoppage, slow-down
or lockout involving VINA or any of its Subsidiaries and any group of its
employees nor has VINA or any of its Subsidiaries experienced any material labor
interruptions over the past three (3) years. VINA and its Subsidiaries are in
compliance in all material respects with all applicable foreign, federal, state
and local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and hours.
3.16 Employee Benefit Plans.
(a) Section 3.16(a) of the VINA Disclosure Schedule sets
forth a complete and accurate list of all Employee Benefit Plans maintained, or
contributed to, or required to be contributed to by VINA, any of VINA's
Subsidiaries or any of their ERISA Affiliates or with respect to which VINA has
or may in the future have any material liability (together, the "VINA EMPLOYEE
PLANS") (excluding any agreements with individual employees that are covered by
Section 3.16(i) and any employment agreements that are terminable "at will").
For purposes of this Agreement, the following terms shall have the following
meanings: (i) "EMPLOYEE BENEFIT PLAN" means any "employee pension benefit plan"
(as defined in Section 3(2) of ERISA), any "employee welfare benefit plan" (as
defined in Section 3(1) of ERISA), and any other written or oral plan, agreement
or arrangement providing for direct or indirect compensation, including
insurance coverage, severance benefits, disability benefits, deferred
compensation, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
compensation and all unexpired severance agreements, written or otherwise, for
the benefit of, or relating to, any current or former employee director, or
consultant of the entity in question or any of its Subsidiaries or ERISA
Affiliates; (ii) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended; and (iii) "ERISA AFFILIATE" means any entity which is, or at
any applicable time was, a member of (1) a controlled group of corporations (as
defined in Section 414(b) of the Code), (2) a group of trades or businesses
under common control (as defined in Section 414(c) of the Code), or (3) an
affiliated service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes or included
the entity in question or any of its Subsidiaries.
(b) VINA has made available to Larscom a complete and
accurate copy of each VINA Employee Plan and, for each such VINA Employee Plan,
(i) the three (3) most recent annual reports (Form 5500) filed with the U.S.
Internal Revenue Service (the "IRS"), if any, required under ERISA or the Code,
(ii) each amendment, trust agreement, group annuity contract, administrative
service agreement, policy pertaining to fiduciary liability insurance covering
the fiduciaries of each VINA Employee Plan, and summary plan description
together with the summaries of material modifications thereto, if any, relating
to such VINA Employee Plan, (iii) the most recent financial statements for each
VINA Employee Plan that is required to be funded, (iv) the three (3) most recent
reports regarding the satisfaction of the nondiscrimination requirements, if
any, applicable to each VINA Employee Plan including those of Sections 410(b),
401(a)(4), 401(k) and 401(m) of the Code, (v) the most recent annual actuarial
valuations, if any, prepared for each VINA Employee Plan; (vi) the most recent
IRS
- 26 -
determination, opinion, notification or advisory letter issued with respect
to each VINA Employee Plan intended to be qualified under Section 401(a) of the
Code; (vii) all communications material to any employee or employees with
respect to any VINA Employee Plan and any proposed VINA Employee Plans, in each
case relating to any amendments, terminations, establishments, increases or
decreases in benefits, acceleration of payments or vesting schedules or other
events which would result in any material liability to VINA; and (viii) all
material correspondence to or from any governmental agency relating to any VINA
Employee Plan.
(c) Each VINA Employee Plan has been established,
maintained and administered in all material respects in accordance with, and
VINA, its Subsidiaries and their ERISA Affiliates have performed in all
material respects all obligations required to be performed by them under, are
not in material default under or violation of, and have no knowledge with
respect to any other party to each VINA Employee Plan of that party's material
default under or violation of ERISA, the Code and all other applicable laws and
the regulations thereunder and the terms of each VINA Employee Plan, and each of
VINA, VINA's Subsidiaries and their ERISA Affiliates has in all material
respects met its obligations with respect to each VINA Employee Plan and has
made all required contributions thereto (or reserved such contributions which
are required but not yet due on the VINA Balance Sheet). All filings and reports
as to each VINA Employee Plan required to have been submitted to the IRS or to
the United States Department of Labor ("DOL") have been timely submitted, except
where failures to timely submit have been cured and are not reasonably likely,
individually or in the aggregate, to cause material harm to VINA. There are no
audits, inquiries or proceedings pending or, to the knowledge of VINA, VINA's
Subsidiaries or their ERISA Affiliates, threatened by the IRS, DOL or any other
governmental entity with respect to any VINA Employee Plan. Neither VINA nor any
of its Subsidiaries or ERISA Affiliates is subject to any material penalty or
tax with respect to any VINA Employee Plan under Section 502(i) of ERISA or
Sections 4975 through 4980 of the Code and no "prohibited transaction," within
the meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and
not otherwise exempt under Section 4975 of the Code or Section 408 of ERISA (or
any administrative class exemption issued thereunder), has occurred with respect
to any VINA Employee Plan which could reasonably be expected to have,
individually or in the aggregate, a VINA Material Adverse Effect. There are no
actions, suits or claims pending, or, to the knowledge of VINA, threatened or
reasonably anticipated (other than routine claims for benefits) against any VINA
Employee Plan or against the assets of any VINA Employee Plan and, to the
knowledge of VINA, no event has occurred, and there exists no condition or set
of circumstances in connection with which VINA or any of its Subsidiaries could
be subject to any liability that is reasonably likely, individually or in the
aggregate, to have a VINA Material Adverse Effect under ERISA, the Code or any
other applicable law.
(d) With respect to each VINA Employee Plan, there are no
benefit obligations for which contributions have not been made or properly
accrued and there are no benefit obligations which have not been accounted for
by reserves, or otherwise properly footnoted in accordance with GAAP, on the
financial statements of VINA, which obligations are reasonably likely,
individually or in the aggregate, to have a VINA Material Adverse Effect.
- 27 -
The assets of each VINA Employee Plan, that is funded are reported at their fair
market value on the books and records of such plan.
(e) Neither VINA nor any ERISA Affiliate has ever
maintained, established, sponsored, participated in, contributed to, or is
obligated to contribute to, or otherwise incurred any obligation or liability
(including, without limitation, any contingent liability) under any
"multiemployer plan" (as defined in Section 3(37) of ERISA), any Pension Plan
subject to Title IV of ERISA or Section 412 of the Code, any multiple employer
plan (as defined in ERISA or the Code), or any "funded welfare plan" within the
meaning of Section 419 of the Code. Any VINA Employee Plan intended to be
qualified under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code has either applied for or obtained a favorable
determination, notification, advisory and/or opinion letter, as applicable, as
to its qualified status from the IRS (and no such letter has been revoked nor
has revocation been threatened) or still has a remaining period of time under
applicable Treasury Regulations or IRS pronouncements in which to apply for such
letter and to make any amendments necessary to obtain a favorable determination.
To the knowledge of VINA, for each VINA Employee Plan that is intended to be
qualified under Section 401(a) of the Code, there has been no event, condition
or circumstance that has adversely affected or is likely to adversely affect
such qualified status. Except as specifically set forth in Section 3.16(e) of
the VINA Disclosure Schedule, no VINA Employee Plan provides health benefits
that are not fully insured through an insurance contract.
(f) No VINA Employee Plan is funded by or a member of a
"voluntary employee's beneficiary association" within the meaning of Section
501(c)(9) of the Code. No VINA Employee Plan holds securities issued by VINA,
any of VINA's Subsidiaries or any of their ERISA Affiliates.
(g) Each VINA International Employee Plan has been
established, maintained and administered in material compliance with its terms
and conditions and with the requirements prescribed by any and all applicable
laws. No VINA International Employee Plan has unfunded liabilities, that as of
the Effective Time, will not be offset by insurance or fully accrued. For
purposes of this Agreement, "VINA INTERNATIONAL EMPLOYEE PLAN" shall mean each
VINA Employee Plan that has been adopted or maintained by VINA or any ERISA
Affiliate, whether informally or formally, or with respect to which VINA or any
ERISA Affiliate will or may have any material liability, for the benefit of
employees who perform services outside the United States.
(h) Each VINA Employee Plan, including, without
limitation, any VINA International Employee Plan, is amendable and terminable
unilaterally by VINA and any of VINA's Subsidiaries which are a party thereto or
covered thereby at any time, including after the Effective Time, without
material liability to VINA, the Surviving Corporation or any of their
Subsidiaries as a result thereof (other than for benefits accrued through the
date of termination or amendment and reasonable administrative expenses related
thereto), and no VINA Employee Plan, plan documentation or agreement, summary
plan description or other written communication distributed generally to
employees by its terms prohibits VINA or any of its Subsidiaries from amending
or terminating any such VINA Employee Plan. The investment
- 28 -
vehicles used to fund VINA Employee Plans may be changed at any time without
incurring a material sales charge, surrender fee or other similar expense.
(i) Neither VINA nor any of its Subsidiaries is a party
to any oral or written (i) agreement with any current or former stockholder,
director, executive officer or other key employee of VINA or any of its
Subsidiaries (A) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving VINA or any
of its Subsidiaries of the nature of any of the transactions contemplated by
this Agreement (either alone or upon the occurrence of any additional or
subsequent event), (B) providing any term of employment or compensation
guarantee or (C) providing severance benefits or other benefits after the
termination of employment of such director, executive officer or key employee;
(ii) agreement, plan or arrangement under which any person may receive payments
from VINA or any of its Subsidiaries that may be subject to the tax imposed by
Section 4999 of the Code or that constitute an "excess parachute payment" for
such person under Section 280G of the Code, without regard to Section
280G(b)(4); or (iii) agreement or plan binding VINA or any of its Subsidiaries,
including any stock option plan or agreement, stock appreciation right plan,
restricted stock plan, stock purchase plan or severance benefit plan, any of the
benefits of which shall be increased, or the vesting of the benefits of which
shall be accelerated, by the execution of this Agreement or the occurrence of
any of the transactions contemplated by this Agreement or the value of any of
the benefits of which shall be calculated on the basis of any of the
transactions contemplated by this Agreement.
(j) None of the VINA Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person, except as
required by applicable law. Neither VINA nor any of its Subsidiaries has ever
represented, promised or contracted (whether in oral or written form) to any
employee (either individually or to employees as a group) or any other person
that such employee(s) or other person would be provided with retiree health,
except to the extent required by applicable law.
3.17 Compliance With Laws. Except as set forth in Section 3.17 of
the VINA Disclosure Schedule, VINA and each of its Subsidiaries has complied
with, is not in violation of, and has not received any notice alleging any
violation with respect to, any applicable provisions of any statute, law or
regulation, except for failures to comply or violations which, individually or
in the aggregate, have not had, and are not reasonably likely to have, a VINA
Material Adverse Effect, and is, and has been, in compliance with the
Xxxxxxxx-Xxxxx Act of 2002 and any related statutes, laws or regulations.
3.18 Permits. VINA and each of its Subsidiaries have all permits,
licenses and franchises from Governmental Entities required to conduct their
businesses as now being conducted or as presently proposed to be conducted (the
"VINA PERMITS"), except for such permits, licenses and franchises the lack of
which, individually or in the aggregate, have not resulted in, and are not
reasonably likely to result in, a VINA Material Adverse Effect. VINA and its
Subsidiaries are in compliance with the terms of the VINA Permits, except where
the failure to so comply, individually or in the aggregate, is not reasonably
likely to have a VINA Material Adverse Effect.
- 29 -
3.19 Insurance. Section 3.19 of the VINA Disclosure Schedule sets
forth a complete and accurate list of all insurance policies maintained by, at
the expense of, or for the benefit of VINA and any of its Subsidiaries and
identifies any material claims made thereunder since January 1, 1998. Each of
VINA and its Subsidiaries maintains insurance policies (the "VINA INSURANCE
POLICIES") with reputable insurance carriers against all risks of a character as
are usually insured against, and in such coverage amounts as are usually
maintained, by similarly situated companies in the same or similar businesses.
Each VINA Insurance Policy is in full force and effect. Since January 1, 1998,
neither VINA nor any of its Subsidiaries has received any notice or other
communication (in writing or otherwise) regarding any actual or possible (a)
cancellation or invalidation of any insurance policy (b) refusal of any coverage
or rejection of any material claim under any insurance policy, or (c) material
adjustment in the amount of the premiums payable with respect to any insurance
policy.
3.20 Title to Assets. VINA and its Subsidiaries own, and have good
and valid title to, all assets purported to be owned by them, including: (a) all
assets reflected on the VINA Balance Sheet (except for assets sold or otherwise
disposed of in the Ordinary Course of Business since December 31, 2002); and (b)
all other assets reflected in the books and records of VINA and its Subsidiaries
as being owned by VINA and its Subsidiaries. All of said assets are owned by
VINA and its Subsidiaries free and clear of any Liens, except for (i) any Lien
for current taxes not yet due and payable and (ii) minor Liens that have arisen
in the Ordinary Course of Business and that do not (in any case or in the
aggregate) materially detract from the value of the assets subject thereto or
materially impair the operations of VINA or any of its Subsidiaries.
3.21 Equipment and Leaseholds. All material items of equipment and
other tangible assets owned by or leased to VINA or any of its Subsidiaries are
adequate for the uses to which they are being put, are in good and safe
condition and repair (ordinary wear and tear excepted) and are adequate for the
conduct of the business of VINA and its Subsidiaries in the manner in which such
business is currently being conducted and presently proposed to be conducted.
3.22 Receivables; Customers; Inventory.
(a) All existing accounts receivable of VINA and its
Subsidiaries as the date hereof (including those accounts receivable reflected
on the VINA Balance Sheet that have not yet been collected and those accounts
receivable that have arisen since December 31, 2002, and have not yet been
collected) (i) represent valid obligations of customers of VINA and its
Subsidiaries arising from bona fide transactions entered into in the Ordinary
Course of Business, (ii) are current and, to the knowledge of VINA, will be
collected in full when due, without any counterclaim or set off (net of an
allowance for doubtful accounts not to exceed the allowance set forth in the
VINA Balance Sheet).
(b) The gross revenue of VINA in the first quarter of
fiscal 2003 will not be materially below minimum anticipated levels.
(c) All of VINA's and its Subsidiaries' existing
inventory (including all inventory that is reflected on the VINA Balance Sheet
and that has not been disposed of by
- 30 -
VINA or any of its Subsidiaries since December 31, 2002) is of such quality and
quantity as to be usable and saleable by VINA or any of its Subsidiaries in the
Ordinary Course of Business.
3.23 Certain Business Practices. Neither VINA nor any of its
Subsidiaries nor any director, officer, agent, employee or affiliate of VINA or
any of its Subsidiaries who was acting or purporting to act on behalf of VINA or
any of its Subsidiaries has (a) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(b) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, nor (c)
made any other unlawful payment.
3.24 Opinion of Financial Advisor. The financial advisor of XXXX,
Xxxxxx Xxxxxx Partners LLC, has delivered to the VINA Board an opinion dated the
date of this Agreement to the effect that, as of such date, the Exchange Ratio
is fair, from a financial point of view, to the holders of VINA Common Stock. A
copy of the written opinion of Xxxxxx Xxxxxx Partners LLC will be provided to
Larscom solely for information purposes within one business day following
receipt thereof by VINA.
3.25 Rights Plan Amendment. All action (including any necessary
action of the VINA Board) necessary to render the rights agreement between VINA
and American Stock Transfer & Trust Company dated July 25, 2001 and amended as
of October 17, 2001 (the "VINA RIGHTS PLAN") inapplicable to this Agreement, the
Merger, the VINA Voting Agreement and the transactions contemplated hereby and
thereby (the "VINA RIGHTS PLAN AMENDMENT") has been taken.
3.26 Section 203 of the DGCL Not Applicable. The VINA Board has
taken the necessary actions to render Section 203 of the DGCL inapplicable to
this Agreement, or the VINA Voting Agreement or the consummation of the Merger
or the other transactions contemplated by this Agreement, or the VINA Voting
Agreement.
3.27 Brokers. No agent, broker, investment banker, financial
advisor or other firm or person is or shall be entitled, as a result of any
action, agreement or commitment of VINA or any of its Affiliates, to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with any of the transactions contemplated by this Agreement, except
Xxxxxx Xxxxxx Partners LLC, whose fees and expenses shall be paid by VINA. VINA
has delivered to Larscom a complete and accurate copy of all agreements pursuant
to which Xxxxxx Xxxxxx Partners LLC is entitled to any fees and expenses in
connection with any of the transactions contemplated by this Agreement.
3.28 Loans to Executive Officers. Since July 30, 2002, VINA has not
extended or maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for any director or
executive officer (or equivalent thereof) of VINA. Section 3.28 of the VINA
Disclosure Schedule identifies any loan or extension of credit maintained by
VINA to which the second sentence of Section 13(k)(1) of the Exchange Act
applies.
- 31 -
3.29 Financial Controls. VINA maintains accurate books and records
reflecting its assets and liabilities and maintains proper and adequate internal
accounting controls which provide assurance that (a) transactions are executed
with management's authorization; (b) transactions are recorded as necessary to
permit preparation of the consolidated financial statements of VINA and to
maintain accountability for VINA's consolidated assets; (c) access to VINA's
assets is permitted only in accordance with management's authorization; (d) the
reporting of VINA's assets is compared with existing assets at regular
intervals; and (e) accounts, notes and other receivables and inventory are
recorded accurately, and proper and adequate procedures are implemented to
effect the collection thereof on a current and timely basis.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LARSCOM AND
THE TRANSITORY SUBSIDIARY
Larscom and the Transitory Subsidiary represent and warrant to VINA
that the statements contained in this Article IV are true and correct, except as
expressly set forth herein or in the disclosure schedule delivered by Larscom to
VINA on the date of this Agreement (the "LARSCOM DISCLOSURE SCHEDULE").
4.1 Organization, Standing and Power. Larscom is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as proposed to be conducted, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the character of the properties it owns, operates or
leases or the nature of its activities makes such qualification necessary,
except for such failures to be so organized, qualified or in good standing,
individually or in the aggregate, which have not had, and are not reasonably
likely to have a Larscom Material Adverse Effect. For purposes of this
Agreement, the term "LARSCOM MATERIAL ADVERSE EFFECT" means any material adverse
change, event, circumstance or development with respect to, or material adverse
effect on, the business, assets, liabilities, capitalization, condition
(financial or other), or results of operations of Larscom and its Subsidiaries,
taken as a whole; provided, however, that none of the following shall, in and of
itself, be taken into account when determining whether there has been, or will
be, a Larscom Material Adverse Effect: (i) any failure by Larscom to meet or
exceed analysts' published revenues or earnings predictions or any change in
Larscom's stock price or trading volume, (ii) with respect to the use of the
term "LARSCOM MATERIAL ADVERSE EFFECT" in the representations and warranties
contained in Section 4.8, any effect resulting from the announcement or pendency
of this Agreement or the Merger, or (iii) other than with respect to the use of
the term "Larscom Material Adverse Effect" in the representations and warranties
contained in Section 4.7, any effect that results from changes affecting
generally the industry or industries in which Larscom or any of its Subsidiaries
participates, the U.S. economy as a whole or foreign economies in any locations
where Larscom or any of its Subsidiaries has material operations, or sales or
customers unless such condition shall disproportionately adversely affect
Larscom or any of its Subsidiaries.
- 32 -
4.2 Charter Documents. Larscom has previously furnished or made
available to VINA a complete and correct copy of its (i) Certificate of
Incorporation and Bylaws as amended to date (together, the "LARSCOM CHARTER
DOCUMENTS") and (ii) Subsidiaries' Certificate of Incorporation, or equivalent
organizational documents, and Bylaws, or equivalent organizational documents.
Such Larscom Charter Documents and equivalent organizational documents of each
of its Subsidiaries are in full force and effect. Larscom is not in violation of
any of the provisions of the Larscom Charter Documents, and no Subsidiary of
Larscom is in violation of its equivalent organizational documents.
4.3 Capitalization.
(a) The authorized share capital of Larscom consists of
119,000,000 shares of Larscom Common Stock consisting of 100,000,000 shares of
Class A Common Stock, $0.01 par value per share (the "LARSCOM CLASS A COMMON
STOCK") and 11,900,000 of Class B Common Stock, $0.01 par value per share (the
"LARSCOM CLASS B COMMON STOCK" and together with the Larscom Class A Common
Stock, the "LARSCOM CLASS COMMON STOCK"), of which 8,867,295 shares of Class A
Common Stock and 10,000,000 shares of Class B Common Stock were issued and
outstanding as of the close of business on March 14, 2003, and 5,000,000 shares
of preferred stock, $0.01 par value per share ("LARSCOM PREFERRED STOCK"), of
which none of which were outstanding as of the close of business March 14, 2003.
As of the close of business on March 14, 2003, (i) no shares of Larscom Class
Common Stock were held in the treasury for Larscom; (ii) 4,089,622 shares of
Larscom Class Common Stock were reserved for future issuance pursuant to
Larscom's Stock Incentive Plan and 2,378,816 shares were subject to outstanding
options; (iii) no shares of Larscom Class Common Stock were reserved for future
issuance pursuant to Larscom's Stock Option Plan for Non-Employee Directors and
132,000 shares were subject to outstanding options; and (iv) no shares of
Larscom Class Common Stock were reserved for future issuance pursuant to
Larscom's Employee Stock Purchase Plan (together with Larscom's Stock Incentive
Plan and Larscom's Stock Option Plan for Non-Employee Directors, the "LARSCOM
STOCK PLANS"). The authorized capital stock of Transitory Subsidiary consists of
1,000 shares of Common Stock, par value $0.0001 per share, of which 100 shares,
as of the date hereof, are issued and outstanding and held by Larscom.
(b) Section 4.3(b) of the Larscom Disclosure Schedule
lists all issued and outstanding shares of Larscom Class Common Stock that
constitute restricted stock or that are otherwise subject to a repurchase or
redemption right or right of first refusal in favor of Larscom, indicating the
name of the applicable stockholder, the vesting schedule for any such shares,
including the extent to which any such repurchase or redemption right or right
of first refusal has lapsed as of the date of this Agreement, the price at which
such stock can be repurchased or redeemed and whether (and to what extent) the
vesting will be accelerated in any way by the Merger or by termination of
employment or change in position following consummation of the Merger.
(c) Section 4.3(c) of the Larscom Disclosure Schedule
sets forth a complete and accurate list, as of the date of this Agreement, of
all outstanding options to purchase Larscom Common Stock under any Larscom Stock
Plan (each a "LARSCOM STOCK OPTION") indicating with respect to each such
Larscom Stock Option the name of the holder thereof, the Larscom Stock Plan
under which it was granted, the number of shares of Larscom Class A
- 33 -
Common Stock subject to such Larscom Stock Option, the exercise price, the date
of grant, and the vesting schedule, including the vesting commencement date and
whether (and to what extent) the vesting will be accelerated in any way by the
Merger or by termination of employment or change in position following
consummation of the Merger. All Larscom Stock Options have been granted under
one of the Larscom Stock Plans. Larscom has not granted any Larscom Stock
Options from and including March 14, 2003 through and including the date of this
Agreement. Except for shares of Larscom Class A Common Stock issued upon
exercise of Larscom Stock Options outstanding as of March 14, 2003, Larscom has
not issued any shares of Larscom Common Stock from and including March 14, 2003
through and including the date of this Agreement. Larscom has provided or made
available to VINA complete and accurate copies of all Larscom Plans and the
forms of all stock option agreements evidencing Larscom Stock Options. Except as
set forth in Section 4.3(c) of the Larscom Disclosure Schedule, no acceleration
of vesting, exercise or repurchase of any Larscom Stock Options will occur as a
result of or in connection with the Merger or by termination of employment or
change in position following consummation of the Merger.
(d) Except as set forth in Section 4.3(d) of the Larscom
Disclosure Schedule, there are no equity securities or other similar ownership
interests of any class or series of capital stock of Larscom, or any securities
convertible into or exercisable or exchangeable for such equity securities or
other similar ownership interests issued, reserved for issuance or outstanding.
Except for securities Larscom owns, directly or indirectly through any of its
Subsidiaries, there are no equity securities or other similar ownership
interests of any class or series of capital stock of any Subsidiary of Larscom,
or any securities convertible into or exercisable or exchangeable for such
equity securities, partnership interests or other similar ownership interests
issued, reserved for issuance or outstanding. There are no options, warrants,
equity securities, partnership interests or other similar ownership interests,
calls, rights (including preemptive rights), commitments or agreements of any
kind or character to which Larscom or any of its Subsidiaries is a party or by
which Larscom or any of its Subsidiaries is bound obligating Larscom or any of
its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition, of any shares of capital stock of Larscom or any of
its Subsidiaries or obligating Larscom or any of its Subsidiaries to grant,
extend, accelerate the vesting of or enter into any such option, warrant, equity
security, partnership interest or other similar ownership interest, call, right,
commitment or agreement. There are no outstanding stock appreciation, phantom
stock or similar rights with respect to VINA or any of its Subsidiaries.
(e) Except as set forth in Section 4.3(e) of the Larscom
Disclosure Schedule, there is no agreement, written or oral, between Larscom or
any Affiliate of Larscom and any holder of the securities of Larscom relating to
the sale or transfer (including agreements relating to rights of first refusal,
co-sale rights or "drag-along" rights), registration under the Securities Act
(including any rights to include securities in the Registration Statement), or
voting, of the shares of Larscom. Except as set forth in Section 4.3(e) of the
Larscom Disclosure Schedule, there is no rights agreement, "poison pill"
anti-takeover plan or other agreement or understanding to which Larscom is a
party or by which it is bound with respect to any equity security of any class
of Larscom.
- 34 -
(f) All outstanding shares of Larscom Class Common Stock
are and all shares of Larscom Class Common Stock subject to issuance as
specified in Section 4.3(a) above (on the terms and conditions specified in the
instruments pursuant to which they are issuable), and shares of Larscom Class
Common Stock to be issued pursuant to this Agreement will be upon issuance
(pursuant to the terms of this Agreement), duly authorized, validly issued,
fully paid and nonassessable and not subject to or issued in violation of any
purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL, the
Larscom Charter Documents or any agreement to which Larscom is a party or is
otherwise bound. All outstanding shares of capital stock, the Larscom Stock
Options and other securities of Larscom and its Subsidiaries have been issued
and granted in compliance on all material respects with all applicable
securities laws and other applicable laws and all requirements set forth in any
applicable contracts.
(g) Except as set forth in Section 4.3(g) of the Larscom
Disclosure Schedule, stockholders of Larscom are not entitled to dissenters' or
appraisal rights under applicable state or federal law in connection with the
Merger.
4.4 Subsidiaries.
(a) Section 4.4 of the Larscom Disclosure Schedule sets
forth, for each Subsidiary of Larscom: (i) its name; (ii) the number and type of
outstanding equity securities owned of record and beneficially by Larscom (as
well as securities exchangeable or exercisable for and convertible into equity
securities thereby) and a list of the holders thereof and the identity of, and
the percentage of outstanding equity securities owned of record and beneficially
by, any other stockholder of a Subsidiary of Larscom; and (iii) the jurisdiction
of organization.
(b) Each Subsidiary of Larscom is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as presently proposed to be conducted,
and is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the character of its properties owned,
operated or leased or the nature of its activities makes such qualification
necessary, except for such failures to be so organized, qualified or in good
standing that, individually or in the aggregate, have not had, and are not
reasonably likely to have, a Larscom Material Adverse Effect. All of the
outstanding shares of capital stock and other equity securities or interests of
each Subsidiary of Larscom are duly authorized, validly issued, fully paid,
nonassessable and not subject to or were not issued in violation of any purchase
option, call option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of applicable law, such
Subsidiary's charter documents or any agreement to which such Subsidiary is a
party or is otherwise bound, and all such shares are owned, of record and
beneficially, by Larscom or another of its Subsidiaries free and clear of all
security interests, liens, claims, pledges, agreements, limitations in Larscom's
voting rights, charges or other Liens of any nature. There are no voting trusts,
proxies or other agreements or understandings with respect to the voting of any
capital stock of any Subsidiary of Larscom.
(c) Larscom does not control directly or indirectly or
have any direct or indirect equity participation or similar interest in any
corporation, partnership, limited liability
- 35 -
company, joint venture, trust or other business association or entity, which is
not a Subsidiary of Larscom. Except as set forth in 4.4(c) of the Larscom
Disclosure Schedule, there are no obligations, contingent or otherwise, of
Larscom or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of any Subsidiary of Larscom or to provide funds to
or make any material investment (in the form of a loan, capital contribution or
otherwise) in any Subsidiary of Larscom or any other entity.
4.5 Authority; No Conflict; Required Filings and Consents.
(a) Each of Larscom and the Transitory Subsidiary has all
requisite corporate power and authority to execute and deliver this Agreement,
subject only to approval of the issuance of Larscom Common Stock under this
Agreement and approval and adoption of the Restated Certificate, which provides
for, among other things, a reverse stock split of Larscom Common Stock at a
ratio to be agreed upon between parties hereto (the "REVERSE STOCK SPLIT")
(collectively, the "LARSCOM VOTING PROPOSAL") by Larscom's stockholders under
the DGCL and the rules of The Nasdaq Stock Market, Inc. and applicable law (the
"LARSCOM STOCKHOLDER APPROVAL") and the approval of the Second Merger by Larscom
as the sole stockholder of the Transitory Sub, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, the Larscom Board, at a
meeting duly called and held, by the unanimous vote of all directors (i)
determined that the Merger is fair, advisable and in the best interests of
Larscom and its stockholders, (ii) adopted and approved this Agreement in
accordance with the provisions of the DGCL and the Larscom Charter Documents,
(iii) approved the Registration Rights Agreement, (iv) approved the Larscom
Voting Agreement and the transactions contemplated thereby, and (v) directed
that this Agreement and the Larscom Voting Proposal be submitted to the
stockholders of Larscom for their adoption and approval and resolved to
recommend that the stockholders of Larscom vote in favor of the adoption of this
Agreement and the approval of the Larscom Voting Proposal. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Larscom and the Transitory Subsidiary have been duly authorized by all
necessary corporate action on the part of each of Larscom and the Transitory
Subsidiary (including the approval of the Merger by Larscom as the sole
stockholder of the Transitory Subsidiary), subject only to the required receipt
of the Larscom Stockholder Approval. This Agreement has been duly executed and
delivered by each of Larscom and the and the Transitory Subsidiary constitutes a
valid and binding obligation of each of Larscom and the Transitory Subsidiary,
enforceable in accordance with its terms, subject to the Bankruptcy and Equity
Exception. No takeover statute or similar statute or regulation applies to the
Merger, this Agreement or any of the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by each
of Larscom and the Transitory Subsidiary do not, and the consummation by Larscom
and the Transitory Subsidiary of the transactions contemplated by this Agreement
shall not a, (i) conflict with, or result in any violation or breach of, any
provision of the Certificate of Incorporation or Bylaws of Larscom, the
Certificate of Incorporation or Bylaws of the Transitory Subsidiary or of the
charter, bylaws or other organizational document of any other Subsidiary of
Larscom, (ii) conflict with, or result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of any material benefit) under, or require a consent or waiver under,
constitute a change in
- 36 -
control under, require the payment of a penalty under or result in the
imposition of any Liens on Larscom's or any of its Subsidiaries' assets under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract or other agreement, instrument or obligation
to which Larscom or any of its Subsidiaries is a party or by which any of them
or any of their properties or assets may be bound, or (iii) subject to obtaining
the Larscom Stockholder Approval and compliance with the requirements specified
in clauses (i) through (vi) of Section 4.5(c), conflict with or violate any
permit, concession, franchise, license, judgment, injunction, order, decree,
statute, law, ordinance, rule or regulation applicable to Larscom or any of its
Subsidiaries or any of its or their properties or assets, except in the case of
clauses (ii) and (iii) of this Section 4.5(b) for any such conflicts,
violations, breaches, defaults, terminations, cancellations, accelerations or
losses which, individually or in the aggregate, are not, reasonably likely to
have a Larscom Material Adverse Effect. Section 4.5(b) of the Larscom Disclosure
Schedule lists all consents, waivers and approvals under any of Larscom's or any
of its Subsidiaries' agreements, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby, which,
if individually or in the aggregate were not obtained, would result in a
material loss of benefits to Larscom, VINA or the Surviving Corporation as a
result of the Merger or a Larscom Material Adverse Effect.
(c) No consent, approval, license, permit, order or
authorization of, or registration, declaration, notice or filing with, any
Governmental Entity is required by or with respect to Larscom or any of its
Subsidiaries in connection with the execution and delivery of this Agreement or
the performance by Larscom or the Transitory Subsidiary of the transactions
contemplated by this Agreement, except for (i) applicable requirements, if any,
of the Securities Act or the Exchange Act, (ii) the filing of the Certificate of
Merger and Certificate of Ownership and Merger with the Delaware Secretary of
State and appropriate corresponding documents with the appropriate authorities
of other states in which Larscom is qualified as a foreign corporation to
transact business, (iii) the filing of such reports, schedules or materials
under Section 13 of or Rule 14a-12 under the Exchange Act and materials under
Rule 165 and Rule 425 of the Securities Act as may be required in connection
with this Agreement and the transactions contemplated hereby, (iv) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under Blue Sky Laws and the laws of any foreign
country, (v) the filing of a Notification Form: Listing of Additional Shares
with The Nasdaq Stock Market, Inc. for the shares of Larscom Common Stock to be
issued in the transactions contemplated by this Agreement and (vi) such
consents, authorizations, orders, filings, approvals and registrations which, if
not obtained or made, would not be reasonably likely to have a Larscom Material
Adverse Effect.
(d) The affirmative vote for adoption of the Larscom
Voting Proposal by the holders of a majority of the voting power of the
outstanding shares of Larscom Class Common Stock on the record date for the
meeting of Larscom's stockholders to consider the Larscom Voting Proposal (the
"LARSCOM MEETING") present or represented by proxy is the only vote of the
holders of any class or series of Larscom's capital stock or other securities
necessary to approve the Larscom Voting Proposal. There are no bonds,
debentures, notes or other indebtedness of Larscom having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of Larscom may vote.
- 37 -
4.6 SEC Filings; Financial Statements; Information Provided.
(a) Larscom has filed all registration statements, forms,
reports and other documents required to be filed by Larscom with the SEC since
January 1, 1998 and has made available to VINA copies of all registration
statements, forms, reports and other documents (including, without limit, all
certifications and statements required to by Rule 13a-14 or 15d-14 under the
Exchange Act or Section 906 of the Xxxxxxxx-Xxxxx Act of 2002) filed by Larscom
with or furnished to the SEC since such date, all of which (other than the
certifications pursuant to said Section 906) are available on the SEC's XXXXX
system. All such required registration statements, forms, reports and other
documents (including those that Larscom may file after the date hereof until the
Closing) are referred to herein as the "LARSCOM SEC REPORTS." Except as set
forth in Section 4.6(a) of the Larscom Disclosure Schedule, the Larscom SEC
Reports (i) were or will be filed on a timely basis, (ii) at the time filed,
were or will be prepared in compliance with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Larscom SEC Reports, and
(iii) did not or will not at the time they were or are filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such Larscom SEC Reports or necessary in order to make the statements
in such Larscom SEC Reports, in the light of the circumstances under which they
were made, not misleading. No Subsidiary of Larscom is subject to the reporting
requirements of Sections 13(a) or 15(d) of the Exchange Act.
(b) Each of the audited consolidated financial statements
(including, in each case, any related notes and schedules) and unaudited interim
consolidated financial statements contained or to be contained in Larscom SEC
Reports at the time filed (i) complied or will comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, (ii) were or will be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim financial statements, as permitted by the
SEC on Form 10-Q under the Exchange Act) and (iii) fairly presented or will
fairly present the consolidated financial position of Larscom and its
Subsidiaries as of the dates indicated and the consolidated results of Larscom
and its Subsidiaries' operations and cash flows for the periods indicated,
consistent with the books and records of Larscom and its Subsidiaries, except
that the unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments which were not or are not expected to be
material in amount. The consolidated, audited balance sheet of Larscom as of
December 31, 2002 is referred to herein as "LARSCOM BALANCE SHEET."
(c) Larscom has previously furnished to VINA a complete
and correct copy of any amendments or modifications, which have not yet been
filed with the SEC but which are required to be filed, to agreements, documents
or other instruments which previously had been filed by Larscom with the SEC
pursuant to the Securities Act or the Exchange Act.
4.7 No Undisclosed Liabilities. Except as set forth in Section 4.7
of the Larscom Disclosure Schedule, and except for normal and recurring
liabilities incurred since the date of the Larscom Balance Sheet in the Ordinary
Course of Business, Larscom and its Subsidiaries do not have any liabilities,
either accrued, contingent or otherwise (whether or not required to be reflected
in financial statements in accordance with generally accepted accounting
principles),
- 38 -
and whether due or to become due, which individually or in the aggregate, are
reasonably likely to have a Larscom Material Adverse Effect.
4.8 Absence of Certain Changes or Events. Except as set forth in
Section 4.8 of the Larscom Disclosure Schedule or in the Larscom SEC Reports,
since the date of the Larscom Balance Sheet, Larscom and its Subsidiaries have
conducted their respective businesses only in the Ordinary Course of Business
and, since such date, there has not been any (a) change, event, circumstance,
development or effect that individually or in the aggregate has had, or is
reasonably likely to have, a Larscom Material Adverse Effect, (b) there has not
been any material damage, destruction or other casualty loss with respect to any
material asset or property owned, leased or otherwise used by Larscom or any of
its Subsidiaries, whether or not covered by insurance, (c) neither Larscom nor
any of its Subsidiaries has declared, accrued, set aside or paid any dividend or
made any other distribution in respect of any shares of capital stock or other
similar ownership interests or repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities or other similar ownership
interests, (d) neither Larscom nor any of its Subsidiaries has changed any of
its methods of accounting or accounting practices in any material respect, (e)
neither Larscom nor any of its Subsidiaries has made any material Tax elections
and (f) neither Larscom nor any of its Subsidiaries has agreed or committed to
take any of the actions referred to in clauses (c) through (e) above.
4.9 Taxes.
(a) Larscom and each of its Subsidiaries have timely
filed all material Returns relating to Taxes required to be filed by Larscom and
each of its Subsidiaries with any Tax authority. Such Returns are true and
correct in all material respects, accurately reflect the liability for Taxes of
Larscom and each of its Subsidiaries, and have been completed in accordance with
applicable law, and Larscom and each of its Subsidiaries have paid or withheld
and paid to the appropriate governmental body all Taxes shown to be due on such
Returns.
(b) Neither Larscom nor any of its Subsidiaries has been
delinquent in the payment of any material Tax nor is there any material Tax
deficiency outstanding, proposed or assessed against Larscom or any of its
Subsidiaries, nor has Larscom or any of its Subsidiaries executed any unexpired
waiver or extension of any statute of limitations on or extending the period for
the assessment or collection of any Tax, nor has any such waiver or extension
been requested from Larscom or any of its Subsidiaries other than an extension
resulting from the filing of a Tax Return after its due date in the Ordinary
Course of Business.
(c) No audit, action, suit or other examination of any
Return of Larscom or any of its Subsidiaries by any Tax authority is presently
in progress, nor has Larscom or any of its Subsidiaries been notified of any
request for such an audit or other examination.
(d) No adjustment relating to any Returns filed by
Larscom or any of its Subsidiaries has been proposed in writing formally or
informally by any Tax authority to Larscom or any of its Subsidiaries or any
representative thereof and there is no basis for such a claim for which Larscom
or any of its Subsidiaries should be aware.
- 39 -
(e) None of Larscom and its Subsidiaries (i) has been a
member of an affiliated group filing a consolidated federal income Tax Return
(other than a group the common parent of which was Larscom) or (ii) has any
liability for the Taxes of any person (other than Larscom and its Subsidiaries)
under Treasury Regulation 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or otherwise.
(f) Neither Larscom nor any of its Subsidiaries has any
liability for any material unpaid Taxes which has not been accrued for or
reserved on Larscom balance sheet dated December 31, 2002 (i) in accordance with
GAAP, whether asserted or unasserted, contingent or otherwise, other than any
liability for unpaid Taxes that may have accrued since December 31, 2002, in
connection with the operation of the business of Larscom and its Subsidiaries in
the ordinary course or (ii) that would result in a material decrease in the net
worth of Larscom or any such Subsidiary.
(g) Neither Larscom nor any of its Subsidiaries has,
within the two (2) year period ending on the Effective Time, made a distribution
to which Code Section 355 applies.
(h) No consent under Section 341(f) of the Code has been
filed with respect to Larscom or any of its Subsidiaries.
(i) Neither Larscom nor any of its Subsidiaries is, or
has been, at any time, 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.
4.10 Owned and Leased Real Properties.
(a) Neither Larscom nor any of its Subsidiaries owns or
has ever owned any real property.
(b) Section 4.10 of the Larscom Disclosure Schedule sets
forth a complete and correct list of all real property leased, subleased,
licensed or occupied by Larscom or any of its Subsidiaries (collectively, the
"LARSCOM LEASES") and the location of the premises. The premises subject to the
Larscom Leases are hereinafter referred to as "LARSCOM LEASED PROPERTY." Except
as set forth in Section 4.10(b) of the Larscom Disclosure Schedule, neither
Larscom, nor any of its Subsidiaries nor, to Larscom's knowledge, any other
party is in default under any of the Larscom Leases (nor does there exist any
condition which, upon the passage of time or the giving of notice or both, would
cause a default). Except as set forth in Section 4.10 of the Larscom Disclosure
Schedule, no property subject to a Larscom Lease is occupied by a third party
other than Larscom and, to Larscom's knowledge, except as set forth on Section
4.10 of the Larscom Disclosure Schedule, no third party has a right to occupy
such property other than Larscom. Larscom has provided to VINA complete and
correct copies of all Larscom Leases, including all amendments thereto; no term
or condition of any of the Larscom Leases has been modified, amended or waived
except as shown in such copies; and there are no other agreements or
arrangements whatsoever relating to Larscom's or its Subsidiaries' use or
occupancy of any of the Larscom Leased Property. Larscom has not transferred,
mortgaged or assigned any interest in any of the Larscom Leases. Larscom or its
Subsidiaries occupies all of the Larscom Leased Property except as identified in
Section 4.10 of the Larscom Disclosure
- 40 -
Schedule. To Larscom's knowledge, there is no pending or threatened condemnation
or similar proceeding affecting any Larscom Leased Property or any portion
thereof, each Larscom Leased Property is supplied with utilities and other
services sufficient to operate the business of Larscom as presently conducted
and neither the operations of Larscom on the Larscom Leased Property, nor the
Larscom Leased Property, violate in any material manner any applicable building
code, zoning requirement, or classification or statute relating to the
particular property or such operations. The Larscom Leased Property is in good
operating condition and repair and is suitable for the conduct of business as
presently conducted therein.
4.11 Intellectual Property.
(a) Larscom and its Subsidiaries own, license or
otherwise possess legally enforceable rights to use all Intellectual Property
used in or necessary to conduct the business of Larscom and its Subsidiaries as
currently conducted.
(b) Section 4.11(b) of the Larscom Disclosure Schedule
accurately identifies, as of the date of this Agreement, all licenses,
sublicenses, and other agreements pursuant to which Larscom or any of its
Subsidiaries is authorized or licensed to use any third party Intellectual
Property (i) for incorporation or embedding into Larscom's or any of its
Subsidiaries' products, (ii) in conjunction with, or in the development of,
Larscom's or any of its Subsidiaries' products, or (iii) that is otherwise
material to the conduct of the business of Larscom or any of its Subsidiaries as
currently conducted (it being understood that (1) shrink wrap or "click and
accept" licenses for "off-the-shelf" software programs, and (2) agreements
providing for future license fees, royalties, or other payment obligations by
Larscom or any of its Subsidiaries that do not exceed $10,000 annually per
agreement (other than contingent or unliquidated amounts) will not be considered
to be agreements to which reference is made in clauses (ii) and (iii) of this
Section 4.11(b)) (collectively, the "LARSCOM MATERIAL INBOUND LICENSES").
(c) Section 4.11(c) of the Larscom Disclosure Schedule
accurately identifies, as of the date of this Agreement, all licenses,
sublicenses, and other agreements pursuant to which (i) any third party has been
granted any exclusive license under, or otherwise has received or acquired any
exclusive right or interest in, any Larscom Intellectual Property, or (ii) any
third party has been granted any non-exclusive license under, or otherwise has
received or acquired any non-exclusive right or interest in, any Larscom
Intellectual Property and pursuant to which such third party had or has
aggregate license fee or royalty payment obligations (other than contingent or
unliquidated amounts) in excess of $10,000 annually (collectively, the "LARSCOM
MATERIAL OUTBOUND LICENSES" and, together with the Larscom Material Inbound
Licenses, the "LARSCOM MATERIAL LICENSES"). As used herein, "LARSCOM
INTELLECTUAL PROPERTY" means any Intellectual Property that is owned by, or
purported to be owned by, Larscom or any of its Subsidiaries.
(d) Section 4.11(d) of the Larscom Disclosure Schedule
sets forth, as of the date of this Agreement, a complete and accurate list of
each patent, patent application, copyright registration or application therefor,
and registered trademark or service xxxx (including, where applicable, the
jurisdiction of issuance or application) of Larscom or any of its Subsidiaries.
All issued patents and registered trademarks, service marks, and copyrights,
which are held by, or
- 41 -
registered in the name of, Larscom or any of its Subsidiaries, are valid and in
full force and effect. Larscom and each of its Subsidiaries has, in a timely
manner, taken all reasonable actions (including, without limitation, the payment
of any applicable fees) necessary to ensure that that all applications filed by
or on behalf of Larscom or any of its Subsidiaries for any patent, trademark,
service xxxx, copyright, or other form of Intellectual Property remain in full
force and effect. Larscom and each of its Subsidiaries has taken reasonable
measures to maintain the confidentiality of and otherwise establish, protect,
and enforce its rights in the Larscom Intellectual Property that Larscom or any
of its Subsidiaries holds, or purports to hold, as a trade secret.
(e) Larscom and its Subsidiaries exclusively own all
right, title, and interest to and in the Larscom Intellectual Property free and
clear of all Liens (other than non-exclusive licenses under the Larscom
Intellectual Property granted by Larscom, its Subsidiaries, or their
predecessors in the Ordinary Course of Business). Without limiting the
generality of the foregoing, except as set forth in Section 4.11(e) of the
Larscom Disclosure Schedule, each person who is or was an employee or contractor
of Larscom or any of its Subsidiaries and who is or was involved in the creation
or development of Intellectual Property for Larscom or any of its Subsidiaries
has signed a valid, enforceable agreement containing an assignment of the
Intellectual Property so created or developed to Larscom or one of its
Subsidiaries and confidentiality provisions protecting Larscom's or its
Subsidiaries' confidential information.
(f) To the knowledge of Larscom, Larscom and its
Subsidiaries have never infringed, misappropriated, or otherwise violated any
Intellectual Property of any third party. Without limiting the generality of the
foregoing and solely to the knowledge of Larscom, neither (i) the products
previously or currently sold or under development by Larscom or any of its
Subsidiaries, or (ii) the business or activities previously or currently
conducted by Larscom or any of its Subsidiaries, has infringed, violated, or
constituted a misappropriation of any Intellectual Property of any third party.
Except as set forth in Section 4.11(f) of the Larscom Disclosure Schedule,
neither Larscom nor any of its Subsidiaries has received any complaint, claim,
or notice alleging any such infringement, violation, or misappropriation. Except
as set forth in Section 4.11(f) of the Larscom Disclosure Schedule, neither
Larscom nor any of its Subsidiaries has received any requests or demands since
January 1, 2000, by third parties for the licensing of such third party's
patents, copyrights, trademarks or other Intellectual Property or proprietary
rights. Except as set forth in Section 4.11(f) of the Larscom Disclosure
Schedule, Larscom and its Subsidiaries have never assumed, or agreed to
discharge or otherwise take responsibility for, any existing or potential
liability of any third party for infringement, misappropriation, or violation of
any Intellectual Property. To the knowledge of Larscom, no other person or
entity has infringed, violated, or misappropriated, and no other person or
entity is currently, infringing, violating, or misappropriating, any material
Larscom Intellectual Property or any Intellectual Property that Larscom or any
of its Subsidiaries is authorized or licensed to use under any Larscom Material
Inbound License.
(g) To the knowledge of Larscom, none of the software
(including firmware and other software embedded in hardware devices) developed
(or currently being developed), distributed, licensed, or sold by Larscom or any
of its Subsidiaries (collectively, the "LARSCOM SOFTWARE") contains any bug,
defect, or error that materially and adversely affects the use, functionality,
or performance of such Larscom Software or any product or system containing or
- 42 -
used in conjunction with such Larscom Software. To the knowledge of Larscom, no
Larscom Software contains any "back door," "drop dead device," "time bomb,"
"Trojan horse," "virus," or "worm" (as such terms are commonly understood in the
software industry) or any other code designed or intended to have, or capable of
performing, any of the following functions: (i) disrupting, disabling, harming,
or otherwise impeding in any manner the operation of, or providing unauthorized
access to, a computer system or network or other device on which such code is
stored or installed; or (ii) damaging or destroying any data or file without the
user's consent. No source code for any Larscom Software has been delivered,
licensed, or made available to any escrow agent or other person or entity. To
the knowledge of Larscom, no event has occurred, and no circumstance or
condition exists, that (with or without notice or lapse of time) will, or could
reasonably be expected to, result in the delivery, license, or disclosure of the
source code for any Larscom Software to any other person.
(h) The execution and delivery of this Agreement and
consummation of the Merger will not result in (i) the breach of, or create on
behalf of any third party the right to terminate or modify, any Larscom Material
Inbound License, (ii) a loss of, or Lien on, any Larscom Intellectual Property,
(iii) the release, disclosure, or delivery of any Larscom Intellectual Property
by or to any escrow agent or other person, (iv) the grant, assignment, or
transfer to any other person of any license or other right or interest under,
to, or in any of the Larscom Intellectual Property, (v) either VINA or its
Subsidiaries being bound by or subject to, as a result of Larscom's contracts
and other legal obligations, any non-compete or other restriction on the
operation or scope of their respective businesses, or (vi) Larscom, the
Surviving Corporation, or any of their Subsidiaries being obligated to pay any
royalties or other amounts to any third party in excess of those payable by
Larscom or the Surviving Corporation, respectively, prior to the Closing.
4.12 Agreements, Contracts and Commitments..
(a) Except as set forth in Section 4.12(a) of the Larscom
Disclosure Schedule and other than those material contracts identified on the
Exhibit index of Larscom's Annual Report on Form 10-K for the year ended
December 31, 2002, there are no contracts or agreements that are material
contracts (as defined in Item 601(b)(10) of Regulation S-K) with respect to
Larscom and its Subsidiaries (such contracts or agreements, together with any
Larscom Material Licenses, any contracts or agreement listed or required to be
listed in Section 4.12(d) of the Larscom Disclosure Schedule, any contract or
agreement with a material customer or supplier and any other contract or
agreement that is material to the business of Larscom or any of its Subsidiaries
(the "LARSCOM MATERIAL CONTRACTS"). Each Larscom Material Contract is in full
force and effect and is enforceable in accordance with its terms, subject to the
Bankruptcy and Equity Exception. Neither Larscom nor any of its Subsidiaries
nor, to Larscom's knowledge, any other party to any Larscom Material Contract is
in material violation of or in material default under any Larscom Material
Contract, nor, to Larscom's knowledge, has any event occurred or circumstance or
condition exists, that (with or without notice or lapse of time) would
reasonably be expected to (i) result in a material violation of or material
default under any Larscom Material Contract, (ii) give any party the right to
cancel or terminate or modify any Larscom Material Contract or (iii) give any
party the right to seek material damages or other material remedies.
- 43 -
(b) Section 4.12(b) of the Larscom Disclosure Schedule
sets forth a complete and accurate list of each contract or agreement to which
Larscom or any of its Subsidiaries is a party or bound by with any Affiliate of
Larscom (other than any Subsidiary, which is a direct or indirect wholly owned
subsidiary of Larscom). Complete and accurate copies of all the agreements,
contracts and arrangements set forth in Section 4.12(b) of the Larscom
Disclosure Schedule have heretofore been furnished or made available to Larscom.
Except as set forth in Section 4.12(b) of the Larscom Disclosure Schedule,
neither Larscom nor any of its Subsidiaries has entered into any transaction
with any Affiliate of Larscom or any of its Subsidiaries or any transaction that
would be subject to proxy statement disclosure pursuant to Item 404 of
Regulation S-K.
(c) Except as set forth in Section 4.12(c) of the Larscom
Disclosure Schedule, Larscom is not a party to any contract, agreement,
arrangement or course of dealing (i) involving future expenditures (whether
actual, potential, fixed or contingent) by Larscom or (ii) that requires or may
require Larscom to provide services in connection with the sale, upgrade or
maintenance of products to any person after the Closing. Complete and accurate
copies of all contracts listed in Section 4.12(c) of the Larscom Disclosure
Schedule have been made available to Larscom.
(d) Except as set forth in Section 4.12(d) of the Larscom
Disclosure Schedule, there is no non-competition or other similar agreement,
arrangement, understanding, commitment, judgment, injunction or order to which
Larscom or any of its Subsidiaries is a party or to which Larscom or any of its
Subsidiaries is subject that has or could reasonably be expected to have the
effect of prohibiting or impairing the conduct of the business of Larscom or any
of its Subsidiaries or Larscom or any of its Subsidiaries as currently conducted
and as proposed to be conducted in any material respect. Neither Larscom nor any
of its Subsidiaries has entered into (or is otherwise bound by) any agreement
under which it is restricted in any material respect from selling, licensing or
otherwise distributing any of its technology or products, or providing services
to, customers or potential customers or any class of customers, in any
geographic area, during any period of time or any segment of the market or line
of business.
(e) Since January 1, 2000, Larscom has not been a party
to any Governmental Contract or Governmental Bid.
4.13 Litigation. Except as set forth in Section 4.13 of the Larscom
Disclosure Schedule, there is no action, suit, proceeding, claim, arbitration or
investigation pending or, to the knowledge of Larscom, threatened against or
affecting Larscom or any of its Subsidiaries or any properties or rights of
Larscom or its Subsidiaries, by or before any Governmental Entity which,
individually or in the aggregate, is reasonably likely to result in material
damages or any material injunctive relief against Larscom or a Subsidiary.
Neither Larscom nor any of its Subsidiaries has commenced any action, suit,
proceeding or arbitration before any Governmental Entity or arbitrator. There
are no material judgments, orders or decrees outstanding against Larscom or any
of its Subsidiaries.
4.14 Environmental Matters. Larscom and its Subsidiaries (i) have
obtained all Environmental Permits and all such Environmental Permits are valid
and in full force and effect, (ii) are in compliance in all respects with all
terms and conditions of such required
- 44 -
Environmental Permits and all Environmental Laws, (iii) have conducted all
Hazardous Material Activities in compliance with all Environmental Laws, other
than, as to each of (i), (ii), and (iii), such as would not have a Larscom
Material Adverse Effect. No action, proceeding, revocation proceeding, amendment
procedure, writ, injunction or claim is pending, or to the knowledge of Larscom,
threatened, concerning or relating to any Environmental Permit or any Hazardous
Materials Activity of Larscom or any of its Subsidiaries. Larscom or any of its
Subsidiaries have never received any notice or other communication (in writing
or otherwise) from any Governmental Body or other Person regarding any actual,
alleged, possible or potential liability arising from or relating to Hazardous
Material Activity of Larscom or any of its Subsidiaries. As of the date hereof,
except in compliance with Environmental Laws and in a manner that would not
subject Larscom or any Subsidiary of Larscom to material liability, to the
knowledge of Larscom, no Hazardous Materials are present in, on or under any
Larscom Business Facility currently owned, leased, operated or occupied, by
Larscom or any Subsidiary of Larscom or were present on any other Larscom
Business Facility at the time it ceased to be owned, leased, operated or
occupied by Larscom or any Subsidiary of Larscom. Larscom or any of its
Subsidiaries have never permitted (knowingly or otherwise) any Hazardous
Material to be generated, manufactured, produced, used, treated, refined,
processed, handled, stored, discharged, released or disposed of (whether
lawfully or unlawfully): (i) on or beneath the surface of any real property that
is, or that has at any time been, owned by, leased to, controlled by or used by
Larscom or any Subsidiary of Larscom; (ii) in or into any surface water,
groundwater, soil or air associated with or adjacent to any such real property;
or (iii) in or into any well, pit, pond, lagoon, impoundment, ditch, landfill,
building, structure, facility, improvement, installation, equipment, pipe,
pipeline, vehicle or storage container that is or was located on or beneath the
surface of any such real property or that is or has at any time been owned by,
leased to, controlled by or used by Larscom or any Subsidiary of Larscom. Each
storage tank or other storage container that is or has been owned by, leased to,
controlled by or used by Larscom or any of its Subsidiaries or that is located
on or beneath the surface of any real property owned by, leased to, controlled
by or used by Larscom or any of its Subsidiaries: (i) is in sound condition; and
(ii) has been demonstrated by accepted testing methodologies to be free of any
corrosion or leaks. For the purposes of this Section 4.14, "LARSCOM BUSINESS
FACILITY" means any property, including the land, the improvements thereon, the
groundwater thereunder and the surface water thereon, that is or at any time has
been owned, operated, occupied, controlled, used or leased by Larscom or any
Subsidiary of Larscom in connection with the operation of its business.
4.15 Employees.
(a) To the knowledge of Larscom, no employee of Larscom
or any Subsidiary of Larscom is in violation of any term of any patent
disclosure agreement, non-competition agreement, or any restrictive covenant to
a former employer relating to the right of any such employee to be employed by
Larscom or any of its Subsidiaries because of the nature of the business
conducted or presently proposed to be conducted by Larscom or any of its
Subsidiaries or the Surviving Corporation following the Effective Time or to the
use of trade secrets or proprietary information of others, the consequences of
which, individually or in the aggregate, are reasonably likely to have a Larscom
Material Adverse Effect. Except as set forth in Section 4.15(b) of the Larscom
Disclosure Schedule, to the knowledge of Larscom, no key employee or group of
employees has any plans to terminate employment with Larscom or its
Subsidiaries.
- 45 -
(b) Neither Larscom nor any of its Subsidiaries is
presently, or has been in the past, bound by or subject to (and none of its
respective assets or properties is bound by or subject to) any arrangement with
any labor union or labor organization. No employees of Larscom or any of its
Subsidiaries is represented by any labor union or covered by any collective
bargaining agreement and, to the knowledge of Larscom, there is no pending
question concerning such representation and to the knowledge of Larscom, there
is no campaign to establish such representation is in progress. There is no
pending or, to the knowledge of Larscom, threatened labor dispute, walkout, work
stoppage, slow-down or lockout involving Larscom or any of its Subsidiaries and
any group of its employees nor has Larscom or any of its Subsidiaries
experienced any material labor interruptions over the past three (3) years.
Larscom and its Subsidiaries are in compliance in all material respects with all
applicable foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours.
4.16 Employee Benefit Plans.
(a) Section 4.16(a) of the Larscom Disclosure Schedule
sets forth a complete and accurate list of all Employee Benefit Plans
maintained, or contributed to, or required to be contributed to by Larscom, any
of Larscom's Subsidiaries or any of their ERISA Affiliates or with respect to
which Larscom has or may in the future have any material liability (together,
the "LARSCOM EMPLOYEE PLANS") (excluding any agreements with individual
employees that are covered by Section 4.16(i) and any employment agreements that
are terminable "at will").
(b) Larscom has made available to VINA a complete and
accurate copy of each Larscom Employee Plan and, for each such Larscom Employee
Plan, (i) the three (3) most recent annual reports (Form 5500) filed with the
IRS, if any, required under ERISA or the Code, (ii) each amendment, trust
agreement, group annuity contract, administrative service agreement, policy
pertaining to fiduciary liability insurance covering the fiduciaries of each
Larscom Employee Plan, and summary plan description together with the summaries
of material modifications thereto, if any, relating to such Larscom Employee
Plan, (iii) the most recent financial statements for each Larscom Employee Plan
that is required to be funded, (iv) the three (3) most recent reports regarding
the satisfaction of the nondiscrimination requirements, if any, applicable to
each Larscom Employee Plan including those of Sections 410(b), 401(a)(4), 401(k)
and 401(m) of the Code, (v) the most recent annual actuarial valuations, if any,
prepared for each Larscom Employee Plan; (vi) the most recent IRS determination,
opinion, notification or advisory letter issued with respect to each Larscom
Employee Plan intended to be qualified under Section 401(a) of the Code; (vii)
all communications material to any employee or employees with respect to any
Larscom Employee Plan and any proposed Larscom Employee Plans, in each case,
relating to any amendments, terminations, establishments, increases or decreases
in benefits, acceleration of payments or vesting schedules or other events which
would result in any material liability to Larscom; and (viii) all material
correspondence to or from any governmental agency relating to any Larscom
Employee Plan.
(c) Each Larscom Employee Plan has been established,
maintained and administered in all material respects in accordance with, and
Larscom, its Subsidiaries and their ERISA Affiliates have performed in all
material respects all obligations required to be performed by them under, are
not in material default under or violation of, and have no knowledge with
- 46 -
respect to any other party to each Larscom Employee Plan of that party's
material default under or violation of ERISA, the Code and all other applicable
laws and the regulations thereunder and the terms of each Larscom Employee Plan,
and each of Larscom, Larscom's Subsidiaries and their ERISA Affiliates has in
all material respects met its obligations with respect to each Larscom Employee
Plan and has made all required contributions thereto (or reserved such
contributions which are required but not yet due on the Larscom Balance Sheet).
All filings and reports as to each Larscom Employee Plan required to have been
submitted to the IRS or to the DOL have been timely submitted, except where
failures to timely submit have been cured and are not reasonably likely,
individually or in the aggregate, to cause material harm to Larscom. There are
no audits, inquiries or proceedings pending or, to the knowledge of Larscom,
Larscom's Subsidiaries or their ERISA Affiliates, threatened by the IRS, DOL or
any other governmental entity with respect to any Larscom Employee Plan. Neither
Larscom nor any of its Subsidiaries or ERISA Affiliates is subject to any
material penalty or tax with respect to any Larscom Employee Plan under Section
502(i) of ERISA or Sections 4975 through 4980 of the Code and no "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections 406 and
407 of ERISA, and not otherwise exempt under Section 4975 of the Code or Section
408 of ERISA (or any administrative class exemption issued thereunder), has
occurred with respect to any Larscom Employee Plan which could reasonably be
expected to have, individually or in the aggregate, a Larscom Material Adverse
Effect. There are no actions, suits or claims pending, or, to the knowledge of
Larscom, threatened or reasonably anticipated (other than routine claims for
benefits) against any Larscom Employee Plan or against the assets of any Larscom
Employee Plan and, to the knowledge of Larscom, no event has occurred, and there
exists no condition or set of circumstances in connection with which Larscom or
any of its Subsidiaries could be subject to any liability that is reasonably
likely, individually or in the aggregate, to have a Larscom Material Adverse
Effect under ERISA, the Code or any other applicable law.
(d) With respect to each Larscom Employee Plan, there are
no benefit obligations for which contributions have not been made or properly
accrued and there are no benefit obligations which have not been accounted for
by reserves, or otherwise properly footnoted in accordance with GAAP, on the
financial statements of Larscom, which obligations are reasonably likely,
individually or in the aggregate, to have a Larscom Material Adverse Effect. The
assets of each Larscom Employee Plan, that is funded, are reported at their fair
market value on the books and records of such plan.
(e) Neither Larscom nor any ERISA Affiliate has ever
maintained, established, sponsored, participated in, contributed to, or is
obligated to contribute to, or otherwise incurred any obligation or liability
(including, without limitation, any contingent liability) under any
"multiemployer plan" (as defined in Section 3(37) of ERISA), any Pension Plan
subject to Title IV of ERISA or Section 412 of the Code, any multiple employer
plan (as defined in ERISA or the Code), or any "funded welfare plan" within the
meaning of Section 419 of the Code. Any Larscom Employee Plan intended to be
qualified under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code has either applied for or obtained a favorable
determination, notification, advisory and/or opinion letter, as applicable, as
to its qualified status from the IRS (and no such letter has been revoked nor
has revocation been threatened) or still has a remaining period of time under
applicable Treasury Regulations or IRS pronouncements in which to apply for such
letter and to make any amendments necessary to
- 47 -
obtain a favorable determination. To the knowledge of Larscom, for each Larscom
Employee Plan that is intended to be qualified under Section 401(a) of the Code,
there has been no event, condition or circumstance that has adversely affected
or is likely to adversely affect such qualified status. Except as specifically
set forth in Section 3.16(e) of the Larscom Disclosure Schedule, no Larscom
Employee Plan provides health benefits that are not fully insured through an
insurance contract.
(f) No Larscom Employee Plan is funded by or a member of
a "voluntary employee's beneficiary association" within the meaning of Section
501(c)(9) of the Code. No Larscom Employee Plan holds securities issued by
Larscom, any of Larscom's Subsidiaries or any of their ERISA Affiliates.
(g) Each Larscom International Employee Plan has been
established, maintained and administered in material compliance with its terms
and conditions and with the requirements prescribed by any and all applicable
laws. No Larscom International Employee Plan has unfunded liabilities that, as
of the Effective Time, will not be offset by insurance or fully accrued. For
purposes of this Agreement, "LARSCOM INTERNATIONAL EMPLOYEE PLAN" shall mean
each Larscom Employee Plan that has been adopted or maintained by Larscom or any
ERISA Affiliate, whether informally or formally, or with respect to which
Larscom or any ERISA Affiliate will or may have any material liability, for the
benefit of employees who perform services outside the United States.
(h) Each Larscom Employee Plan, including, without
limitation, any Larscom International Employee Plan, is amendable and terminable
unilaterally by Larscom and any of Larscom's Subsidiaries which are a party
thereto or covered thereby at any time, including after the Effective Time,
without material liability to Larscom, the Surviving Corporation or any of their
Subsidiaries as a result thereof (other than for benefits accrued through the
date of termination or amendment and reasonable administrative expenses related
thereto), and no Larscom Employee Plan, plan documentation or agreement, summary
plan description or other written communication distributed generally to
employees by its terms prohibits Larscom or any of its Subsidiaries from
amending or terminating any such Larscom Employee Plan. The investment vehicles
used to fund Larscom Employee Plans may be changed at any time without incurring
a material sales charge, surrender fee or other similar expense.
(i) Neither Larscom nor any of its Subsidiaries is a
party to any oral or written (i) agreement with any current or former
stockholder, director, executive officer or other key employee of Larscom or any
of its Subsidiaries (A) the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Larscom or any of its Subsidiaries of the nature of any of the transactions
contemplated by this Agreement (either alone or upon the occurrence of any
additional or subsequent event), (B) providing any term of employment or
compensation guarantee or (C) providing severance benefits or other benefits
after the termination of employment of such director, executive officer or key
employee; (ii) agreement, plan or arrangement under which any person may receive
payments from Larscom or any of its Subsidiaries that may be subject to the tax
imposed by Section 4999 of the Code or that constitute an "excess parachute
payment" for such person under Section 280G of the Code, without regard to
Section 280G(b)(4); or (iii) agreement or plan binding Larscom or any of its
Subsidiaries, including any stock option plan or agreement,
- 48 -
stock appreciation right plan, restricted stock plan, stock purchase plan or
severance benefit plan, any of the benefits of which shall be increased, or the
vesting of the benefits of which shall be accelerated, by the execution of this
Agreement or the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which shall be calculated on
the basis of any of the transactions contemplated by this Agreement.
(j) None of the Larscom Employee Plans promises or
provides retiree medical or other retiree welfare benefits to any person, except
as required by applicable law. Neither Larscom nor any of its Subsidiaries has
ever represented, promised or contracted (whether in oral or written form) to
any employee (either individually or to employees as a group) or any other
person that such employee(s) or other person would be provided with retiree
health, except to the extent required by applicable law.
4.17 Compliance With Laws. Except as set forth in 4.17 of the
Larscom Disclosure Schedule, Larscom and each of its Subsidiaries has complied
with, is not in violation of, and has not received any notice alleging any
violation with respect to, any applicable provisions of any statute, law or
regulation, except for failures to comply or violations which, individually or
in the aggregate, have not had, and are not reasonably likely to have, a Larscom
Material Adverse Effect, and is, and has been, in compliance with the
Xxxxxxxx-Xxxxx Act of 2002 and any related statutes, laws or regulations.
4.18 Permits. Larscom and each of its Subsidiaries have all
permits, licenses and franchises from Governmental Entities required to conduct
their businesses as now being conducted or as presently proposed to be conducted
(the "LARSCOM PERMITS"), except for such permits, licenses and franchises the
lack of which, individually or in the aggregate, have not resulted in, and are
not reasonably likely to result in, a Larscom Material Adverse Effect. Larscom
and its Subsidiaries are in compliance with the terms of the Larscom Permits,
except where the failure to so comply, individually or in the aggregate, is not
reasonably likely to have a Larscom Material Adverse Effect.
4.19 Insurance. Section 4.19 of the Larscom Disclosure Schedule
sets forth a complete and accurate list of all insurance policies maintained by,
at the expense of, or for the benefit of Larscom and any of its Subsidiaries and
identifies any material claims made thereunder since January 1, 1998. Each of
Larscom and its Subsidiaries maintains insurance policies (the "LARSCOM
INSURANCE POLICIES") with reputable insurance carriers against all risks of a
character as are usually insured against, and in such coverage amounts as are
usually maintained, by similarly situated companies in the same or similar
businesses. Each Larscom Insurance Policy is in full force and effect. Since
January 1, 1998, neither Larscom nor any of its Subsidiaries has received any
notice or other communication (in writing or otherwise) regarding any actual or
possible (a) cancellation or invalidation of any insurance policy (b) refusal of
any coverage or rejection of any material claim under any insurance policy, or
(c) material adjustment in the amount of the premiums payable with respect to
any insurance policy.
4.20 Title to Assets. Larscom and its Subsidiaries own, and have
good and valid title to, all assets purported to be owned by them, including:
(a) all assets reflected on the Larscom Balance Sheet (except for assets sold or
otherwise disposed of in the Ordinary Course of Business since December 31,
2002); and (b) all other assets reflected in the books and records of
- 49 -
Larscom and its Subsidiaries as being owned by Larscom and its Subsidiaries. All
of said assets are owned by Larscom and its Subsidiaries free and clear of any
Liens, except for (i) any Lien for current taxes not yet due and payable and
(ii) minor Liens that have arisen in the Ordinary Course of Business and that do
not (in any case or in the aggregate) materially detract from the value of the
assets subject thereto or materially impair the operations of Larscom or any of
its Subsidiaries.
4.21 Equipment and Leaseholds. All material items of equipment and
other tangible assets owned by or leased to Larscom or any of its Subsidiaries
are adequate for the uses to which they are being put, are in good and safe
condition and repair (ordinary wear and tear excepted) and are adequate for the
conduct of the business of Larscom and its Subsidiaries in the manner in which
such business is currently being conducted and presently proposed to be
conducted.
4.22 Receivables; Customers; Inventory.
(a) All existing accounts receivable of Larscom and its
Subsidiaries as the date hereof (including those accounts receivable reflected
on the Larscom Balance Sheet that have not yet been collected and those accounts
receivable that have arisen since December 31, 2002, and have not yet been
collected) (i) represent valid obligations of customers of Larscom and its
Subsidiaries arising from bona fide transactions entered into in the Ordinary
Course of Business, (ii) are current and, to the knowledge of Larscom, will be
collected in full when due, without any counterclaim or set off (net of an
allowance for doubtful accounts not to exceed the allowance set forth in the
Larscom Balance Sheet).
(b) The gross revenue of Larscom in the first quarter of
fiscal 2003 will not be materially below minimum anticipated levels.
(c) All of Larscom's and its Subsidiaries' existing
inventory (including all inventory that is reflected on the Larscom Balance
Sheet and that has not been disposed of by Larscom or any of its Subsidiaries
since December 31, 2002) is of such quality and quantity as to be usable and
saleable by Larscom or any of its Subsidiaries in the Ordinary Course of
Business.
4.23 Certain Business Practices. Neither Larscom nor any of its
Subsidiaries nor any director, officer, agent, employee or affiliate of Larscom
or any of its Subsidiaries who was acting or purporting to act on behalf of
Larscom or any of its Subsidiaries has (a) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (b) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, nor (c) made any other unlawful payment.
4.24 Opinion of Financial Advisor. The financial advisor of
Larscom, Standard & Poor's, has delivered to the Larscom Board an opinion dated
the date of this Agreement to the effect that, as of such date, the Exchange
Ratio is fair, from a financial point of view, to the holders of Larscom Common
Stock. A copy of the written opinion of Standard & Poor will be
- 50 -
provided to VINA solely for information purposes within one business day
following receipt thereof by Larscom.
4.25 Brokers. No agent, broker, investment banker, financial
advisor or other firm or person is or shall be entitled, as a result of any
action, agreement or commitment of Larscom or any of its Affiliates, to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with any of the transactions contemplated by this Agreement, except
Standard & Poor's whose fees and expenses shall be paid by Larscom. Larscom has
delivered to VINA a complete and accurate copy of all agreements pursuant to
which Standard & Poor's is entitled to any fees and expenses in connection with
any of the transactions contemplated by this Agreement.
4.26 Operations of the Transitory Subsidiary. The Transitory
Subsidiary was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, has engaged in no other business activities and
has conducted its operations only as contemplated by this Agreement.
4.27 Section 203 of the DGCL Not Applicable. The Larscom Board has
taken the necessary actions to render Section 203 of the DGCL inapplicable to
this Agreement or the Larscom Voting Agreement or the consummation of the Merger
or the other transactions contemplated by this Agreement or the Larscom Voting
Agreement.
4.28 Loans to Executive Officers. Since July 30, 2002, Larscom has
not extended or maintained credit, arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to or for any
director or executive officer (or equivalent thereof) of Larscom. Section 4.28
of the Larscom Disclosure Schedule identifies any loan or extension of credit
maintained by VINA to which the second sentence of Section 13(k)(1) of the
Exchange Act applies.
4.29 Financial Controls. Larscom maintains accurate books and
records reflecting its assets and liabilities and maintains proper and adequate
internal accounting controls which provide assurance that (a) transactions are
executed with management's authorization; (b) transactions are recorded as
necessary to permit preparation of the consolidated financial statements of
Larscom and to maintain accountability for Larscom's consolidated assets; (c)
access to Larscom's assets is permitted only in accordance with management's
authorization; (d) the reporting of Larscom's assets is compared with existing
assets at regular intervals; and (e) accounts, notes and other receivables and
inventory are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis.
ARTICLE V
CONDUCT OF BUSINESS
5.1 Covenants of VINA. Except as expressly provided herein or as
consented to in writing by Larscom, from and after the date of this Agreement
until the earlier of the termination of this Agreement in accordance with
Article VIII and the Effective Time, VINA shall, and shall
- 51 -
cause each of its Subsidiaries to, (a) act and carry on its business in the
Ordinary Course of Business and pay its debts and Taxes and perform its other
obligations when due (subject to good faith disputes over such debts, Taxes or
obligations), (b) comply in all material respects with applicable laws, rules
and regulations, and (c) use commercially reasonable efforts, consistent with
past practices, to maintain and preserve its and each of its Subsidiaries'
business organization, assets and properties, keep available the services of its
present officers and key employees and preserve its advantageous business
relationships with customers, strategic partners, suppliers, distributors and
others having business dealings with it. Without limiting the generality of the
foregoing, from and after the date of this Agreement until the earlier of the
termination of this Agreement in accordance with Article VIII and the Effective
Time, VINA shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, do any of the following (i) except with the prior written consent
of Larscom (which consent will not be unreasonably withheld or delayed) or (ii)
except as specifically permitted by any other provision of this Agreement or
(iii) except as would be permitted consistent with the VINA Disclosure Schedule:
(a) (i) declare, set aside or pay any dividends on, or
make any other distributions (whether in cash, securities or other property) in
respect of, any of its capital stock (other than dividends and distributions by
a direct or indirect wholly owned Subsidiary of VINA to its parent); (ii) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or any of its other securities, or (iii)
purchase, redeem or otherwise acquire any shares of its capital stock or any
other of its securities or any rights, warrants or options to acquire any such
shares or other securities (except, in the case of this clause (iii), for the
acquisition of shares of VINA Common Stock from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
at their original issuance price in connection with any termination of services
to VINA);
(b) except as provided in Section 5.1(b) of the VINA
Disclosure Schedule, issue, deliver, sell, grant, pledge or otherwise dispose of
or encumber any shares of its capital stock, any other voting securities or any
securities convertible into or exchangeable for, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible or
exchangeable securities (other than (i) the issuance of shares of VINA Common
Stock upon the exercise of VINA Stock Options and VINA Warrants (A) outstanding
on the date of this Agreement in accordance with their present terms or (B)
granted after the date of this Agreement as permitted by the provisions of this
Agreement, (ii) the grant of options to purchase VINA Common Stock, which grants
shall not exceed 100,000 shares in the aggregate, and shall have an exercise
price equal to the fair market value of VINA Common Stock on the date of grant
and shall otherwise be upon VINA's customary terms and (iii) the issuance of
VINA Common Stock in the Ordinary Course of Business under VINA's ESPP as
currently in effect;
(c) amend the VINA Charter Documents or other comparable
charter or organizational documents;
(d) form any Subsidiary or acquire any equity interest or
ownership interest in any other person;
- 52 -
(e) acquire (i) by merging or consolidating with, or by
purchasing all or a substantial portion of the assets or any stock of, or by any
other manner, any business or any corporation, partnership, joint venture,
limited liability company, association or other business organization or
division thereof or (ii) any assets that are material, individually or in the
aggregate, to VINA and its Subsidiaries, taken as a whole;
(f) whether or not in the Ordinary Course of Business,
sell, lease, license, encumber, dispose of or otherwise transfer any assets
material to VINA and its Subsidiaries, taken as a whole (including any accounts,
leases, contracts or Intellectual Property or any assets or the stock of any of
its Subsidiaries, but excluding the sale or license of products in the Ordinary
Course of Business);
(g) amend the VINA Rights Plan (other than as expressly
contemplated in this Agreement) or adopt or implement any additional stockholder
rights plan;
(h) except for a confidentiality agreement as permitted
by Section 6.1, enter into an agreement with respect to any merger,
consolidation, liquidation or business combination, or any acquisition or
disposition of all or substantially all of the assets or securities of VINA or
any of its Subsidiaries;
(i) authorize, recommend, propose or announce an
intention to authorize, recommend or propose, or enter into any agreement in
principle or an agreement with respect to, any plan of liquidation or
dissolution of VINA;
(j) (i) incur or suffer to exist any indebtedness for
borrowed money or guarantee any such indebtedness of another person, (ii) issue,
sell or amend any debt securities or warrants or other rights to acquire any
debt securities of VINA or any of its Subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, or (iii) make
any loans, advances (other than routine advances to employees of VINA in the
Ordinary Course of Business) or capital contributions to, or investment in, any
other person, other than VINA or any of its direct or indirect wholly owned
Subsidiaries;
(k) make any capital expenditures or other expenditures
with respect to property, plant or equipment for VINA and its Subsidiaries,
taken as a whole in excess of $25,000 in the aggregate;
(l) make any changes in accounting methods, principles or
practices, except insofar as may have been required by the SEC or a change in
GAAP or, except as so required, change any assumption underlying, or method of
calculating, any bad debt, contingency or other reserve;
(m) except as provided in Section 5.1(m) of the VINA
Disclosure Schedule and except in the Ordinary Course of Business, modify, amend
or terminate any material contract or agreement to which VINA or any of its
Subsidiaries is party, or knowingly waive, release or assign any material rights
or claims (including any write-off or other compromise of any accounts
receivable of VINA of any of its Subsidiaries);
- 53 -
(n) except as otherwise expressly contemplated by this
Agreement and except with respect to commitments or liabilities incurred in
connection with this Agreement and the transactions contemplated hereby,
including the incurrence of reasonable legal and accounting fees and expenses
and the investment banker fees and expenses set forth in the agreement to be
delivered pursuant to Section 3.27 hereof, except in the Ordinary Course of
Business, (i) enter into any material contract, agreement or transaction or take
any other material action or (ii) license any material Intellectual Property
rights to or from any third party;
(o) except as required to comply with applicable law or
agreements, plans or arrangements existing on the date hereof, (i) take any
action with respect to, adopt, enter into, terminate or amend any employment,
severance or similar agreement or benefit plan for the benefit or welfare of any
future, current or former director, officer, employee or consultant or any
collective bargaining agreement, (ii) increase in any material respect the
compensation or fringe benefits of, or pay any bonus to, any director, officer,
employee or consultant (whether in cash, stock, equity securities, property or
otherwise), (iii) waive any stock repurchase rights, accelerate, amend or change
the period of exercisability of options or restricted stock or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans, (iv) pay any material benefit not provided for as of the date of this
Agreement under any VINA Employee Plan, (v) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or benefit
plan, or (vi) take any action other than in the Ordinary Course of Business to
fund or in any other way secure the payment of compensation or benefits under
any employee plan, agreement, contract or arrangement or benefit plan;
(p) hire any new employee at the level of director or
above or with an annual base salary in excess of $150,000 or promote any
employee to the level of director or above;
(q) make or change any material Tax election, change any
annual tax accounting period, adopt or change any method of tax accounting, file
any material amended Tax Return, settle or compromise any material Tax claim,
assessment, or proposed assessment, or take any other action, if any such action
would have the effect of increasing the post-closing Tax liability of VINA,
and of its Subsidiaries or any person related to VINA by a material amount;
(r) initiate, compromise, pay, discharge or settle any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), litigation or arbitration proceeding,
exclusive of any amounts covered by VINA Insurance Policies;
(s) fail to maintain insurance at levels substantially
comparable to levels existing as of the date of this Agreement;
(t) enter into any agreement to purchase or sell any
interest in real property, grant or accept any security interest in any real
property, enter into any lease, sublease, license or other occupancy agreement
with respect to any real property or alter, amend, modify or terminate any of
the terms of any VINA Lease; or
- 54 -
(u) authorize any of, or commit or agree, in writing or
otherwise, to take any of, the foregoing actions or any action which would make
any representation or warranty of VINA in this Agreement untrue or incorrect in
any material respect, or would materially impair or prevent the satisfaction of
any conditions in Article VII hereof.
5.2 Covenants of Larscom. Except as expressly provided herein or
as consented to in writing by VINA, from and after the date of this Agreement
until the earlier of the termination of this Agreement in accordance with
Article VIII and the Effective Time, Larscom shall, and shall cause each of its
Subsidiaries to, (a) act and carry on its business in the Ordinary Course of
Business and pay its debts and Taxes and perform its other obligations when due
(subject to good faith disputes over such debts, Taxes or obligations), (b)
comply in all material respects with applicable laws, rules and regulations, and
(c) use commercially reasonable efforts, consistent with past practices, to
maintain and preserve its and each of its Subsidiaries' business organization,
assets and properties, keep available the services of its present officers and
key employees and preserve its advantageous business relationships with
customers, strategic partners, suppliers, distributors and others having
business dealings with it. Without limiting the generality of the foregoing,
from and after the date of this Agreement until the earlier of the termination
of this Agreement in accordance with Article VIII and the Effective Time,
Larscom shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, do any of the following (i) except with the prior written consent of
VINA (which consent will not be unreasonably withheld or delayed) or (ii) except
as specifically permitted by any other provision of this Agreement or (iii)
except as would be permitted consistent with the Larscom Disclosure Schedule:
(a) (i) declare, set aside or pay any dividends on, or
make any other distributions (whether in cash, securities or other property) in
respect of, any of its capital stock (other than dividends and distributions by
a direct or indirect wholly owned Subsidiary of Larscom to its parent; (ii)
split, combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for any shares of its capital stock or any of its other securities (except for
the Reverse Stock Split contemplated under the Restated Certificate and this
Agreement); or (iii) purchase, redeem or otherwise acquire any shares of its
capital stock or any other of its securities or any rights, warrants or options
to acquire any such shares or other securities (except, in the case of this
clause (iii), for the acquisition of shares of Larscom Common Stock from former
employees, directors and consultants in accordance with agreements providing for
the repurchase of shares at their original issuance price in connection with any
termination of services to Larscom);
(b) except as provided in Section 5.2(b) of the Larscom
Disclosure Schedule, issue, deliver, sell, grant, pledge or otherwise dispose of
or encumber any shares of its capital stock, any other voting securities or any
securities convertible into or exchangeable for, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible or
exchangeable securities, (other than: (i) the issuance of shares of Larscom
Common Stock upon the exercise of Larscom Stock Options (A) outstanding on the
date of this Agreement in accordance with their present terms or (B) granted
after the date of this Agreement as permitted by the provisions of this
Agreement, (ii) the grant of options to purchase Larscom Common Stock, which
grants shall not exceed 30,435 shares in the aggregate, and shall have an
exercise price equal to the fair market value of Larscom Common Stock on the
date of grant and shall
- 55 -
otherwise be upon Larscom's customary terms; and (iii) the issuance of shares of
Larscom Common Stock in the Ordinary Course of Business under Larscom's Employee
Share Purchase Plan as currently in effect);
(c) amend the Larscom Charter Documents or other
comparable charter or organizational documents, except to the extent necessary
to carry into effect the provisions of Sections 1.5 and 6.17 or as otherwise
expressly provided by this Agreement;
(d) form any Subsidiary or acquire any equity interest or
other ownership interest in any other person;
(e) acquire (i) by merging or consolidating with, or by
purchasing all or a substantial portion of the assets or any stock of, or by any
other manner, any business or any corporation, partnership, joint venture,
limited liability company, association or other business organization or
division thereof or (ii) any assets that are material, individually or in the
aggregate, to Larscom and its Subsidiaries, taken as a whole;
(f) whether or not in the Ordinary Course of Business,
sell, lease, license, encumber, dispose of or otherwise transfer any assets
material to Larscom and its Subsidiaries, taken as a whole (including any
accounts, leases, contracts or Intellectual Property or any assets or the stock
of any of its Subsidiaries, but excluding the sale or license of products in the
Ordinary Course of Business);
(g) except as expressly contemplated by this Agreement,
adopt or implement any stockholder rights plan;
(h) except for a confidentiality agreement as permitted
by Section 6.1, enter into an agreement with respect to any merger,
consolidation, liquidation or business combination, or any acquisition or
disposition of all or substantially all of the assets or securities of Larscom
or any of its Subsidiaries;
(i) authorize, recommend, propose or announce an
intention to authorize, recommend or propose, or enter into any agreement in
principle or an agreement with respect to, any plan of liquidation or
dissolution of Larscom;
(j) (i) incur or suffer to exist any indebtedness for
borrowed money or guarantee any such indebtedness of another person, (ii) issue,
sell or amend any debt securities or warrants or other rights to acquire any
debt securities of Larscom or any of its Subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, or (iii) make
any loans, advances (other than routine advances to employees of Larscom in the
Ordinary Course of Business) or capital contributions to, or investment in, any
other person, other than Larscom or any of its direct or indirect wholly owned
Subsidiaries;
(k) make any capital expenditures or other expenditures
with respect to property, plant or equipment for Larscom and its Subsidiaries,
taken as a whole in excess of $25,000 in the aggregate;
- 56 -
(l) make any changes in accounting methods, principles or
practices, except insofar as may have been required by the SEC or a change in
GAAP or, except as so required, change any assumption underlying, or method of
calculating, any bad debt, contingency or other reserve;
(m) except as provided in Section 5.2(m) of the Larscom
Disclosure Schedule and except in the Ordinary Course of Business, modify, amend
or terminate any material contract or agreement to which Larscom or any of its
Subsidiaries is party, or knowingly waive, release or assign any material rights
or claims (including any write-off or other compromise of any accounts
receivable of Larscom of any of its Subsidiaries);
(n) except as otherwise expressly contemplated by this
Agreement and except with respect to commitments or liabilities incurred in
connection with this Agreement and the transactions contemplated hereby,
including the incurrence of reasonable legal and accounting fees and expenses
and the investment banker fees and expenses set forth in the agreement to be
delivered pursuant to Section 4.25 hereof, except in the Ordinary Course of
Business, (i) enter into any material contract, agreement or transaction or take
any other material action or (ii) license any material Intellectual Property
rights to or from any third party;
(o) hire any new employee at the level of director or
above or with an annual base salary in excess of $150,000 or promote any
employee to the level of director or above;
(p) except as required to comply with applicable law or
agreements, plans or arrangements existing on the date hereof, (i) take any
action with respect to, adopt, enter into, terminate or amend any employment,
severance or similar agreement or benefit plan for the benefit or welfare of any
future, current or former director, officer, employee or consultant or any
collective bargaining agreement, (ii) increase in any material respect the
compensation or fringe benefits of, or pay any bonus to, any director, officer,
employee or consultant (whether in cash, stock, equity securities, property or
otherwise), (iii) waive any stock repurchase rights, accelerate, amend or change
the period of exercisability of options or restricted stock or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans, (iv) pay any material benefit not provided for as of the date of this
Agreement under any Larscom Employee Plan, (v) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or benefit
plan, or (vi) take any action other than in the Ordinary Course of Business to
fund or in any other way secure the payment of compensation or benefits under
any employee plan, agreement, contract or arrangement or benefit plan;
(q) make or change any material Tax election, change any
annual tax accounting period, adopt or change any method of tax accounting, file
any material amended Tax Return, settle or compromise any material Tax claim,
assessment, or proposed assessment, or take any other action, if any such action
would have the effect of increasing the post-closing Tax liability of Larscom,
and of its Subsidiaries or any person related to Larscom by a material amount;
(r) initiate, compromise, pay, discharge or settle any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise),
- 57 -
litigation or arbitration proceeding, exclusive of any amounts covered by
Larscom Insurance Policies;
(s) fail to maintain insurance at levels substantially
comparable to levels existing as of the date of this Agreement;
(t) enter into any agreement to purchase or sell any
interest in real property, grant or accept any security interest in any real
property, enter into any lease, sublease, license or other occupancy agreement
with respect to any real property or alter, amend, modify or terminate any of
the terms of any Larscom Lease; or
(u) authorize any of, or commit or agree, in writing or
otherwise, to take any of, the foregoing actions or any action which would make
any representation or warranty of Larscom in this Agreement untrue or incorrect
in any material respect, or would materially impair or prevent the satisfaction
of any conditions in Article VII hereof.
5.3 Confidentiality. The parties acknowledge that VINA and Larscom
have previously executed a Mutual Confidentiality Agreement dated as of August
20, 2002 (the "CONFIDENTIALITY AGREEMENT"), which Confidentiality Agreement
shall continue in full force and effect in accordance with its terms, except as
expressly modified by this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 No Solicitation.
(a) No Solicitation or Negotiation. From and after the
date of this Agreement until the Effective Time or the termination of this
Agreement pursuant to Article VIII hereof, and except as set forth in this
Section 6.1, Larscom and VINA shall not, shall cause their respective
Subsidiaries not to, and shall cause their or their Subsidiaries' respective
directors, officers, investment bankers, attorneys, accountants or other
advisors or representatives (such directors, officers, investment bankers,
attorneys, accountants, affiliates, other advisors and representatives,
collectively, "Representatives") not to, directly or indirectly:
(i) solicit, initiate, knowingly encourage or
take any other action to facilitate any inquiries or the making,
submission or announcement of any proposal or offer that constitutes,
or could reasonably be expected to lead to, any Acquisition Proposal,
with respect to itself, including without limitation (A) approving any
transaction under Section 203 of the DGCL, (B) approving any person
becoming an "interested stockholder" under Section 203 of the DGCL and
(C) amending or granting any waiver or release under any standstill or
similar agreement with respect to any Larscom Common Stock or VINA
Common Stock;
(ii) enter into, continue or otherwise
participate in any discussions or negotiations regarding, furnish to
any person any information with respect to, knowingly assist or
participate in any effort or attempt by any person with respect to, or
otherwise knowingly cooperate in any way with any proposal or offer
that constitutes, or could
- 58 -
reasonably be expected to lead to, any Acquisition Proposal, except
discussions as to the existence of these provisions;
(iii) approve, endorse or recommend any
Acquisition Proposal with respect to itself; or
(iv) enter into any letter of intent or similar
document or any contract, agreement or commitment contemplating or
otherwise relating to any Acquisition Proposal or transaction
contemplated thereby with respect to itself.
Notwithstanding the foregoing, in the event that, to the extent
required by their respective fiduciary obligations, as determined in good faith
by the applicable Board of Directors, prior to (A) in the case of Larscom, the
approval of the Larscom Voting Proposal at the Larscom Meeting or, (B) in the
case of VINA, the approval of the VINA Voting Proposal at the VINA Meeting (in
each case, the "SPECIFIED TIME"), Larscom or VINA, as the case may be,
receives an Acquisition Proposal with respect to itself from a third party which
(1) constitutes a Superior Proposal or (2) which its Board of Directors in good
faith concludes is more favorable to its stockholders than the transactions
contemplated by this Agreement and which could reasonably be expected to result
in a Superior Proposal in all other respects, and such Acquisition Proposal did
not result from a breach by Larscom or VINA, as the case may be, of this
Section 6.1, and subject to compliance with Section 6.1(c), then Larscom or
VINA, as the case may be, or any of their respective Representatives may take
the following actions: (x) furnish nonpublic information with respect to Larscom
or VINA, as the case may be, to the person making such Acquisition Proposal
and its Representatives pursuant to a customary confidentiality agreement not
less restrictive of the other party than the Confidentiality Agreement and (y)
participate in discussions or negotiations with such person and its
Representatives regarding any such Acquisition Proposal.
(b) No Change in Recommendation or Alternative
Acquisition Agreement. Beginning immediately upon the execution of this
Agreement, neither the Larscom Board nor the VINA Board nor any committee
thereof shall:
(i) except as set forth in this Section 6.1,
withdraw or modify, or publicly propose to withdraw or modify, in a
manner adverse to the other party, its approval or recommendation with
respect to the Larscom Voting Proposal or the VINA Voting Proposal, as
the case may be;
(ii) cause or permit Larscom or VINA to enter
into any letter of intent, memorandum of understanding, agreement in
principle, acquisition agreement, merger agreement or similar agreement
constituting or relating to any Acquisition Proposal (other than a
confidentiality agreement referred to in Section 6.1(a) entered into in
the circumstances referred to in Section 6.1(a)); or
(iii) adopt, approve or recommend, or propose to
adopt, approve or recommend, any Acquisition Proposal.
Notwithstanding the foregoing, the Larscom Board or the VINA Board may,
in compliance with this Section 6.1, withdraw or modify or propose to withdraw
or modify its
- 59 -
recommendation with respect to the Larscom Voting Proposal or the VINA Voting
Proposal, as the case may be, publicly indicate that it is doing so because it
has received a Superior Proposal (and, to the extent required in order to comply
with such Board's fiduciary duties under applicable law, as determined in good
faith by the applicable Board of Directors, may endorse or recommend such
Superior Proposal), if the Larscom Board or the VINA Board, as the case may be,
determines in good faith (after consultation with outside counsel) that its
fiduciary obligations require it to do so, but only at a time that is prior to
the Specified Time and is after the second business day following receipt by
VINA or Larscom, as the case may be, of written notice advising (x) that the
other has received an Acquisition Proposal which constitutes a Superior
Proposal, and (y) specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal.
(c) Notices; Additional Negotiations. Each party shall
immediately advise the other party orally, with written confirmation to follow
promptly, of any Acquisition Proposal or any request for nonpublic information
in connection with any Acquisition Proposal, or of any inquiry with respect to,
or that could reasonably be expected to lead to, any Acquisition Proposal, the
material terms and conditions of any such Acquisition Proposal or inquiry and
the identity of the person making any such Acquisition Proposal or inquiry.
Neither party shall provide any information to or participate in discussions or
negotiations with (except for discussions as to the existence of these
provisions) the person or entity making any Acquisition Proposal which
constitutes a Superior Proposal or which could reasonably be expected to result
in a Superior Proposal until two business days after such party has first
notified the other party of such Acquisition Proposal as required by the
preceding sentence. The party receiving an Acquisition Proposal shall (i) orally
and in writing within 24 hours of receipt thereof, keep the other party fully
informed of the status and material terms of any such Acquisition Proposal,
request or inquiry (including notifying the other party orally and in writing of
the identity of the person making such Acquisition Proposal, request or inquiry,
and of any material change to the terms of such Acquisition Proposal) and (ii)
if the other party to this Agreement shall make a competing proposal, consider
and cause its financial and legal advisors to negotiate on its behalf in good
faith with respect to the terms of such competing proposal. Contemporaneously
with providing any information to a third party in connection with any such
Acquisition Proposal, the party receiving such Acquisition Proposal shall
furnish a copy of such information to the other party to the extent that such
copy has not previously been provided to the other party. In addition to the
foregoing, Larscom or VINA shall (A) provide the other party with at least 24
hours prior notice (or such lesser prior notice as provided to the members of
the Larscom Board or to the members of the VINA Board but in no event less than
eight hours) of any meeting of the Larscom Board or the VINA Board at which the
Larscom Board or the VINA Board is reasonably expected to consider an
Acquisition Proposal which constitutes a Superior Proposal or which could
reasonably be expected to result in a Superior Proposal and (B) provide the
other party with at least two business days prior written notice of a meeting of
the Larscom Board or the VINA Board at which the Larscom Board or the VINA Board
is reasonably expected to recommend a Superior Proposal to its stockholders and
together with such notice a copy of the definitive documentation relating to
such Superior Proposal to the extent that such copy has not previously been
provided to the other party.
(d) Certain Permitted Disclosure. Nothing contained in
this Section 6.1 or in Section 6.5 shall be deemed to prohibit either party from
taking and disclosing to its stockholders
- 60 -
a position with respect to a tender offer contemplated by Rules 14d-9 or 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal, if,
in the good faith judgment of the Larscom Board or the VINA Board, as the case
may be, based on the advice of outside counsel, failure to so disclose would be
inconsistent with its obligations under applicable law.
(e) Cessation of Ongoing Discussions. Each party shall,
and shall cause its Subsidiaries and its and their Representatives to, cease
immediately all discussions and negotiations regarding any proposal that
constitutes, or could reasonably be expected to lead to, an Acquisition
Proposal. As of the date of this Agreement, each of Larscom and VINA represents
that neither it nor any of its Subsidiaries is engaged, directly or indirectly,
in any discussions or negotiations with any other party with respect to an
Acquisition Proposal.
(f) Definitions. For purposes of this Agreement.
"ACQUISITION PROPOSAL" means, with respect to any party, (i)
any inquiry, proposal or offer for a merger, consolidation, dissolution, sale of
substantial assets, tender offer, recapitalization, share exchange or other
business combination involving such party or any of its Subsidiaries, (ii) any
proposal for the issuance by such party or any of its Subsidiaries of over 20%
of its equity securities or the voting power of its equity securities or (iii)
any proposal or offer to acquire in any manner, directly or indirectly, over 20%
of the equity securities or the voting power of its equity securities or
consolidated total assets of such party; provided, however, in each case
Acquisition Proposal shall not include the Merger contemplated by this
Agreement.
"SUPERIOR PROPOSAL" means, with respect to any party, any
unsolicited, bona fide written proposal made by a third party to acquire,
directly or indirectly, pursuant to a tender or exchange offer, merger,
consolidation or other business combination or asset purchase, all or
substantially all of the assets of Larscom or VINA, as the case may be, or a
majority of the total outstanding voting securities in the case of VINA, or
securities representing a majority of the voting power of the total outstanding
securities in the case of Larscom, and as a result of which the stockholders of
Larscom or VINA, as the case may be, immediately preceding such transaction
would hold less than fifty percent (50%) of the voting power of the total
outstanding equity interests in the surviving or resulting entity of such
transaction or any direct or indirect parent or subsidiary thereof, on terms
that the Board of Directors of VINA or Larscom, as the case may be, has in
good faith concluded to be more favorable, from a financial point of view, to
its stockholders (in their capacities as stockholders) than the transactions
contemplated by this Agreement (following consultation with outside and
independent legal and financial advisors and after taking into account all the
terms and conditions of such proposal and this Agreement (including any proposal
by either party to amend the terms of this Agreement) and on the terms proposed,
taking into account all financial, regulatory, legal and other aspects of such
proposal; provided, however, that no Acquisition Proposal shall be deemed to be
a Superior Proposal if any financing required to consummate the Acquisition
Proposal is not committed.
6.2 Joint Proxy Statement/Prospectus and Registration Statement.
(a) As promptly as practicable after the execution of
this Agreement, VINA and Larscom shall jointly prepare and file with the SEC a
joint proxy statement/prospectus
- 61 -
(together with any amendments thereof or supplements thereto, the "JOINT PROXY
STATEMENT/PROSPECTUS") to be sent to the stockholders of VINA and Larscom in
connection with the VINA Meeting and Larscom Meeting, respectively, and Larscom
shall prepare and file with the SEC a registration statement on Form S-4 in
which the Joint Proxy Statement/Prospectus will be included as a prospectus, to
register under the Securities Act the issuance of shares of Larscom Common Stock
in connection with the Merger (together with all amendments thereto, the
"REGISTRATION STATEMENT"). Each of Larscom and VINA shall provide promptly to
the other party such information concerning its business and financial
statements and affairs as, in the reasonable judgment of the providing party or
its counsel, may be required or appropriate for inclusion in the Joint Proxy
Statement/Prospectus and the Registration Statement, or in any supplements or
amendments thereto, and cause its counsel and auditors to cooperate with the
other's counsel and auditors in the preparation of the Joint Proxy
Statement/Prospectus and the Registration Statement. Each of VINA and Larscom
shall respond to any comments of the SEC and shall use its respective
commercially reasonable efforts to have the Joint Proxy Statement/Prospectus
cleared by the SEC and the Registration Statement declared effective under the
Securities Act as promptly as practicable after such filings and VINA and
Larscom shall cause the Joint Proxy Statement/Prospectus to be mailed to their
respective stockholders at the earliest practicable time after both the Joint
Proxy Statement/Prospectus is cleared by the SEC and the Registration Statement
is declared effective under the Securities Act; provided, however, that the
parties shall consult and cooperate with each other in determining the
appropriate time for mailing the Joint Proxy Statement/Prospectus in light of
the date sets for the VINA Meeting and the Larscom Meeting. Each of VINA and
Larscom shall notify the other promptly upon the receipt of any comments from
the SEC or its staff or any other government officials and of any request by the
SEC or its staff or any other government officials for amendments or supplements
to the Registration Statement, the Joint Proxy Statement/Prospectus or any
filing pursuant to Section 6.2(c) or for additional information and shall supply
the other with copies of all correspondence between such party or any of its
representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Registration
Statement, the Joint Proxy Statement/Prospectus, the Merger or any filing
pursuant to Section 6.2(c). Each of VINA and Larscom shall use commercially
reasonable efforts to cause all documents that it is responsible for filing with
the SEC or other regulatory authorities under this Section 6.2 to comply in all
material respects with all applicable requirements of law and the rules and
regulations promulgated thereunder. Whenever any event occurs which is required
to be set forth in an amendment or supplement to the Joint Proxy
Statement/Prospectus, the Registration Statement or any filing pursuant to
Section 6.2(b), VINA or Larscom, as the case may be, shall promptly inform the
other of such occurrence and cooperate in filing with the SEC or its staff or
any other Governmental Entity or government officials, and/or mailing to
stockholders of VINA and Larscom, such amendment or supplement.
(b) Each of Larscom and VINA agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time the Registration Statement becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Joint Proxy Statement/Prospectus will, at the
time of first mailing to the Larscom stockholders or VINA stockholders or at the
time of the Larscom Meeting or VINA
- 62 -
Meeting, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading, or (iii) any filing
pursuant to Rule 165 and 425 under the Securities Act or Rule 14a-12 under the
Exchange Act (each a "REGULATION M-A FILING"), when taken together with the
Joint Proxy Statement/Prospectus, will, at the time of filing with the SEC or,
if applicable, at the time first mailed or otherwise communicated to Larscom or
VINA stockholders, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made by Larscom
with respect to statements made or incorporated by reference therein about VINA
or supplied by VINA for inclusion or incorporation by reference in the
Registration Statement, Joint Prospectus/Proxy Statement or Regulation M-A
Filing and no representation or warranty is made by VINA with respect to
statements made or incorporated by reference therein about Larscom that are
supplied by the Larscom for inclusion or incorporation by reference in the
Registration Statement, the Joint Proxy Statement/Prospectus or any Regulation
M-A Filing.
(c) VINA and Larscom shall promptly make all necessary
filings with respect to the Merger under the Securities Act, the Exchange Act,
applicable Blue Sky Laws, the applicable laws of any other jurisdiction and the
rules and regulations thereunder; provided, however, that neither Larscom, VINA
nor the Surviving Corporation shall be required (i) to qualify to do business as
a foreign corporation in any jurisdiction in which it is not now qualified or
(ii) to file a general consent to service of process in any jurisdiction.
6.3 Larscom Affiliate Agreements. Larscom shall take all necessary
action to modify or terminate the agreements set forth on Section 6.3 of the
Larscom Disclosure Schedule (the "PARENT AGREEMENTS") prior to the Closing in
the manner as mutually and reasonably agreed to by the parties.
6.4 Access to Information. From and after the date of this
Agreement until the earlier of the termination of this Agreement in accordance
with Article VIII and the Effective Time, each of VINA and Larscom shall (and
shall cause each of its Subsidiaries to) afford to the other party's
Representatives, reasonable access, during normal business hours during the
period prior to the Effective Time, to all its properties, books, work papers,
Tax Returns, contracts, commitments, personnel, customers, suppliers and vendors
and records and, during such period, each of VINA and Larscom shall (and shall
cause each of its Subsidiaries to) furnish promptly to the other party (a) a
copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to the requirements of federal or
state securities laws or the securities laws of any other applicable
jurisdiction and (b) all other information concerning its business, properties,
assets and personnel as the other party may reasonably request. Each of VINA and
Larscom will hold any such information which is nonpublic in confidence in
accordance with the Confidentiality Agreement. No information or knowledge
obtained in any investigation pursuant to this Section 6.4 or otherwise shall
affect or be deemed to modify any representation or warranty contained in this
Agreement or the conditions to the obligations of the parties to consummate the
Merger.
- 63 -
6.5 Stockholders Meetings.
(a) Larscom, acting through the Larscom Board, shall take
all actions in accordance with applicable law, its Certificate of Incorporation
and Bylaws and the rules of The Nasdaq Stock Market, Inc. to promptly and duly
call, give notice of, convene and hold as promptly as practicable after the
declaration of effectiveness of the Registration Statement, the Larscom
Stockholders Meeting for the purpose of considering and voting upon the Larscom
Voting Proposal. Except as expressly permitted by Section 6.1(b), to the fullest
extent permitted by applicable law, (i) the Larscom Board shall unanimously
recommend approval and adoption of the Larscom Voting Proposal by the
stockholders of Larscom and include such unanimous recommendation in the Joint
Proxy Statement/Prospectus, and (ii) neither the Larscom Board nor any committee
thereof shall withdraw or modify, or propose or resolve to withdraw or modify,
in a manner adverse to VINA, the recommendation of the Larscom Board that
Larscom's stockholders vote in favor of the Larscom Voting Proposal.
Notwithstanding anything to the contrary contained in this Agreement, after
consultation with VINA, Larscom may adjourn or postpone the Larscom
Stockholder Meeting to the extent necessary to ensure that any required
supplement or amendment to the Joint Proxy Statement/Prospectus is provided to
Larscom's stockholders or, if, as of the time for which the Larscom Stockholders
Meeting is originally scheduled (as set forth in the Joint Proxy
Statement/Prospectus), there are insufficient shares of Larscom Common Stock
represented (either in person or by proxy) to constitute a quorum necessary to
conduct the business of the Larscom Stockholders Meeting.
(b) VINA, acting through the VINA Board, shall take all
actions in accordance with applicable law, its Certificate of Incorporation and
Bylaws and the rules of The Nasdaq Stock Market, Inc. to promptly and duly call,
give notice of, convene and hold as promptly as practicable after the
declaration of effectiveness of the Registration Statement, the VINA
Stockholders Meeting for the purpose of considering and voting upon the VINA
Voting Proposal. Except as expressly permitted by Section 6.1(b), to the fullest
extent permitted by applicable law, (i) the VINA Board shall unanimously
recommend approval and adoption of the VINA Voting Proposal by the stockholders
of VINA and include such unanimous recommendation in the Joint Proxy
Statement/Prospectus, and (ii) neither the VINA Board nor any committee thereof
shall withdraw or modify, or propose or resolve to withdraw or modify, in a
manner adverse to Larscom, the recommendation of the VINA Board that VINA's
stockholders vote in favor of the VINA Voting Proposal. Notwithstanding anything
to the contrary contained in this Agreement, after consultation with Larscom,
VINA may adjourn or postpone the VINA Stockholders Meeting to the extent
necessary to ensure that any required supplement or amendment to the Joint Proxy
Statement/Prospectus is provided to VINA's stockholders or, if, as of the time
for which the VINA Stockholders Meeting is originally scheduled (as set forth in
the Joint Proxy Statement/Prospectus), there are insufficient shares of VINA
Common Stock represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of the VINA Stockholders Meeting.
6.6 Legal Conditions to Merger.
(a) Subject to the terms hereof, including Section
6.6(b), and applicable law, Larscom and VINA shall each use commercially
reasonable efforts to (i) take, or cause to be taken, all actions, and do, or
cause to be done, and to assist and cooperate with the other parties
- 64 -
in doing, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated hereby as promptly as practicable, (ii)
as promptly as practicable, obtain from any Governmental Entity or any other
third party any consents, licenses, permits, waivers, approvals, authorizations,
or orders required to be obtained or made by Larscom or VINA or any of their
Subsidiaries in connection with the authorization, execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
(iii) as promptly as practicable, make all necessary filings, and thereafter
make any other required submissions, with respect to this Agreement and the
Merger required under (A) the Securities Act and the Exchange Act, and any other
applicable federal or state securities laws, (B) the HSR Act, if applicable, and
any related governmental request thereunder, and (C) any other applicable law,
and (iv) execute or deliver any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement. Larscom and VINA shall cooperate with each other in connection with
the making of all such filings, including providing copies of all such documents
to the non-filing party and its advisors prior to filing and, if requested,
accepting all reasonable additions, deletions or changes suggested in connection
therewith. Larscom and VINA shall use their respective commercially reasonable
efforts to furnish to each other all information required for any application or
other filing to be made pursuant to the rules and regulations of any applicable
law (including all information required to be included in the Joint Proxy
Statement/Prospectus and the Registration Statement) in connection with the
transactions contemplated by this Agreement. For the avoidance of doubt, VINA
and Larscom agree that nothing contained in this Section 6.6(a) shall modify or
affect their respective rights and responsibilities under Section 6.6(b).
(b) Subject to the terms hereof, VINA and Larscom agree,
and shall cause each of their respective Subsidiaries, to cooperate and to use
their respective commercially reasonable efforts to obtain any government
clearances or approvals required for Closing under the HSR Act, if applicable,
and any other federal, state or foreign law or, regulation or decree designed to
prohibit, restrict or regulate actions for the purpose or effect of
monopolization or restraint of trade reasonably determined by the parties to
apply (collectively "ANTITRUST LAWS"), to respond to any government requests for
information under any Antitrust Law, and to contest and resist any action,
including any legislative, administrative or judicial action, and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order (whether temporary, preliminary or permanent) (an "ANTITRUST ORDER")
that restricts, prevents or prohibits the consummation of the Merger or any
other transactions contemplated by this Agreement under any Antitrust Law. The
parties hereto will consult and cooperate with one another, and consider in good
faith the views of one another, in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments, opinions and proposals made or
submitted by or on behalf of any party hereto in connection with proceedings
under or relating to any Antitrust Law. Notwithstanding anything in this
Agreement to the contrary in this Section 6.6, neither VINA nor Larscom shall be
under any obligation to (i) make proposals, execute or carry out agreements or
submit to orders providing for the sale or other disposition or holding separate
(through the establishment of a trust or otherwise) of any material assets or
categories of assets of VINA or Larscom or the holding separate of the shares of
VINA Common Stock (or shares of stock of the Surviving Corporation) or imposing
or seeking to impose any material limitation on the ability of VINA or Larscom
to conduct its business or own such assets or to acquire, hold or exercise full
rights of ownership of the shares of VINA Common Stock (or shares of stock of
the Surviving Corporation) or (ii) take any action under this Section 6.6 if the
United States Department of
- 65 -
Justice or the United States Federal Trade Commission or any applicable foreign
regulatory agency authorizes its staff to seek a preliminary injunction or
restraining order to enjoin consummation of the Merger.
(c) Each of Larscom and VINA shall give (or shall cause
their respective Subsidiaries to give) any notices to third parties, and use,
and cause their respective Subsidiaries to use, their commercially reasonable
efforts to obtain any third party consents related to or required in connection
with the Merger that are (A) necessary to consummate the transactions
contemplated hereby, (B) disclosed or required to be disclosed in the Larscom
Disclosure Schedule or VINA Disclosure Schedule, as the case may be, or (C)
required to prevent a Larscom Material Adverse Effect or a VINA Material Adverse
Effect from occurring prior to or at the Effective Time.
6.7 Public Disclosure. From and after the date of this Agreement
until the earlier of the termination of this Agreement in accordance with
Article VIII and the Effective Time each party shall not, and shall not permit
any of its Representatives to, issue any press release or otherwise publicly
disseminate any document or other written material relating to the Merger or any
other transaction contemplated by this Agreement unless (a) the other party
shall have approved such press release or written material (such approval not to
be unreasonably withheld or delayed) or (b) such party shall have been advised
by its outside legal counsel that the issuance of such press release or
dissemination of such written material is required by law or The Nasdaq Stock
Market, Inc. rules and regulations and such party shall have consulted with the
other party prior to issuing such press release or disseminating such written
material.
6.8 Section 368(a) Reorganization. Neither VINA nor Larscom nor
any of their Subsidiaries shall take any action that would reasonably be
expected to cause the Merger to fail to qualify as a reorganization within the
meaning of Section 368(a) of the Code. Larscom and VINA shall each make all
commercially reasonable efforts to cause the Merger to be treated as a
reorganization within the meaning of Section 368(a) of the Code.
6.9 Affiliate Legends. Section 6.9 of the VINA Disclosure Schedule
sets forth a list of those persons who are, in VINA's reasonable judgment,
"affiliates" of VINA within the meaning of Rule 145 promulgated under the
Securities Act ("RULE 145 AFFILIATES"). VINA shall notify Larscom in writing of
any change in the identity of its Rule 145 Affiliates prior to the Closing.
Larscom shall be entitled to place appropriate legends on the Larscom Common
Stock to be received by Rule 145 Affiliates of VINA in the Merger reflecting the
restrictions set forth in Rule 145 promulgated under the Securities Act and to
issue appropriate stop transfer instructions to the transfer agent for Larscom
Common Stock.
6.10 Nasdaq Stock Market Listing. Larscom shall use commercially
reasonable best efforts (a) to cause the Larscom Common Stock to be issued
pursuant to this Agreement to the holders of VINA Common Stock in connection
with the Merger to be approved for listing upon the Effective Time on the Nasdaq
Small Cap Market, if applicable, and (b) to cause the Larscom Common Stock
issued upon the exercise of converted VINA Stock Options and VINA Warrants to be
approved for listing on the Nasdaq Small Cap Market, if applicable, and shall,
if required by the rules of The Nasdaq Stock Market, Inc., file timely with The
Nasdaq Stock
- 66 -
Market, Inc. a Notification Form: Listing of Additional Shares with respect to
such shares of Larscom Common Stock.
6.11 Stockholder Litigation. From and after the date of this
Agreement until the earlier of the termination of this Agreement in accordance
with Article VIII and the Effective Time, each party shall give the other party
the opportunity to participate in the defense or settlement of any stockholder
litigation relating to this Agreement or any of the transactions contemplated by
this Agreement, and shall not settle any such litigation without the other
party's prior written consent, which shall not be unreasonably withheld or
delayed.
6.12 Indemnification.
(a) From and after the Effective Time, Larscom shall, and
shall cause the Surviving Corporation to, for a period of six years from the
Effective Time, indemnify, defend and hold harmless each present and former
director and officer of VINA (the "INDEMNIFIED PARTIES"), against any costs or
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages, liabilities or amounts paid in settlement incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to matters existing or occurring at or prior to the Effective Time (including
for acts or omissions occurring in connection with the approval of this
Agreement and the consummation of the transactions contemplated hereby), whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent that VINA would have been permitted under Delaware law, the
Xxxxxxxx-Xxxxx Act of 2002 and any related statutes laws or regulations, the
VINA Charter Documents and any agreements for indemnification in effect on the
date hereof to indemnify an Indemnified Party, in the forms provided by VINA to
Larscom prior to the date hereof, (and Larscom and the Surviving Corporation
shall also advance expenses as incurred to the fullest extent permitted under
Delaware law, the Xxxxxxxx-Xxxxx Act of 2002 and any related statutes laws or
regulations and such VINA Charter Documents and the agreements set forth on
Section 6.12(a) of the VINA Disclosure Schedule, provided the Indemnified Party
to whom expenses are advanced provides an undertaking to repay such advances if
it is ultimately determined that such Indemnified Party is not entitled to
indemnification). Neither Larscom nor the Surviving Corporation shall amend,
appeal or otherwise modify the indemnification or exculpation from liability or
other similar provisions set forth in the Restated Certificate or the current
bylaws of Larscom for a period of six years after the Effective Time in any
manner that would adversely affect the rights thereunder of any person who,
immediately prior to the Effective Time, was an indemnified party under the
indemnification or exculpation from liability provisions of the VINA Charter
Documents.
(b) For a period of six years after the Effective Time,
Larscom shall cause the Surviving Corporation to maintain in effect a directors'
and officers' liability insurance policy covering those persons who are
currently covered by VINA's directors' and officers' liability insurance policy
(a copy of which has been heretofore delivered or made available to Larscom)
with coverage in amount and scope at least as favorable to such persons as
VINA's existing coverage with respect to claims arising from facts or events
which occurred on or before the Effective Time (including for acts or omissions
occurring in connection with the approval of this Agreement and the consummation
of the transactions contemplated hereby); provided, that in no event shall
Larscom or the Surviving Corporation be required to expend in excess of 150% of
the
- 67 -
annual premium currently paid by VINA for such coverage; provided, further, that
if the annual premium exceeds such amount, Larscom will cause the Surviving
Corporation to obtain as much coverage as possible for such amount.
Notwithstanding the foregoing, VINA may prior to the Effective Time purchase
directors' and officers' liability insurance tail coverage provided the cost of
such tail coverage does not exceed $1.6 million, which would satisfy Larscom's
obligations set forth in this Section 6.12(b); provided, however, VINA agrees
not to purchase such tail coverage without first making a good faith effort to
procure coverage in amount and scope at least as favorable at the contemplated
$1.6 million tail coverage at a lesser cost and without first consulting with
Larscom.
(c) In the event that Larscom or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and is not the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers or
conveys all or substantially all its properties and assets to any person, then,
and in each such case, Larscom shall cause proper provisions to be made so that
the successors and assigns of Larscom or the Surviving Corporation, as the case
may be, assume the obligations set forth in this Section 6.12.
(d) The provisions of this Section 6.12 are intended to
be in addition to the rights otherwise available to the current officers and
directors of VINA by law, charter, statute, bylaw or agreement, and shall
operate for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives. The obligations of Larscom and
the Surviving Corporation under this Section 6.12 shall not be terminated or
modified in such a manner as to adversely affect any Indemnified Party to whom
this Section 6.12 applies without the express written consent of such affected
Indemnified Party (it being expressly agreed that the Indemnified Parties to
whom this Section 6.12 applies shall be third party beneficiaries of this
Section 6.12).
6.13 Notification of Certain Matters. VINA shall give prompt notice
to Larscom, and Larscom shall give prompt notice to VINA, of the occurrence,
or failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (a) (i) any representation or warranty of such party
contained in this Agreement that is qualified as to materiality to be untrue or
inaccurate in any respect or (ii) any other representation or warranty of such
party contained in this Agreement to be untrue or inaccurate in any material
respect, in each case at any time from and after the date of this Agreement
until the Effective Time, or (b) any material failure of Larscom and the
Transitory Subsidiary or VINA, as the case may be, or of any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement. Notwithstanding the above, the delivery of any notice pursuant to
this Section will not limit or otherwise affect the remedies available hereunder
to the party receiving such notice or the conditions to such party's obligation
to consummate the Merger.
6.14 Exemption from Liability Under Section 16(b).
(a) The VINA Board, or a committee thereof consisting of
non-employee directors (as such term is defined for purposes of Rule 16b-3(d)
under the Exchange Act), and the Larscom Board, or a committee thereof
consisting of non-employee directors (as such term is
- 68 -
defined for purposes of Rule 16b-3(d) under the Exchange Act) shall,
respectively, adopt resolutions in advance of the Effective Time providing that
the receipt by VINA Insiders (as defined below) of Larscom securities in
exchange for shares of VINA Common Stock, and of options and warrants to
purchase Larscom securities upon assumption and conversion of VINA Stock Options
and Warrants, in each case pursuant to the transactions contemplated hereby and
to the extent such securities are listed in the Section 16 Information, is
intended to be exempt pursuant to Rule 16b-3 under the Exchange Act.
(b) For purposes of Section 6.14(a), "SECTION 16
INFORMATION" shall mean information regarding VINA Insiders and the number of
shares of VINA Common Stock or other VINA equity securities deemed to be
beneficially owned by each such VINA Insider and expected to be exchanged for
Larscom securities, or options or warrants to purchase Larscom securities, in
each case, in connection with the Merger which shall be provided by VINA to
Larscom no later than 10 business days prior to the Closing.
(c) For purposes of Section 6.14(a), "VINA INSIDERS"
shall mean those officers and directors of VINA who are subject to the reporting
requirements of Section 16(a) of the Exchange Act as listed in the Section 16
Information.
6.15 Restated Certificate. Larscom shall (i) take any and all
corporate action reasonably necessary to approve the Reverse Stock Split at a
ratio agreed to by VINA and (ii) effect the Reverse Stock Split immediately
prior to the Effective Time by filing the Restated Certificate with the
Secretary of State of the State of Delaware.
6.16 Employee Benefits. Following the Effective Time, Larscom will
give each Continuing Employee full credit for (i) prior service with VINA or its
Subsidiaries for purposes of (A) eligibility and vesting under any Larscom
Employee Plan, (B) determination of benefits levels under any Larscom Employee
Plan or policy relating to vacation or severance, (C) determination of "retiree"
status under any Larscom Employee Plan, and (ii) any annual deductibles,
co-payments or such other expenses required under any VINA health or other VINA
Employee Plan that are paid during the year of the Merger prior to the Effective
Time in satisfying any applicable deductible, out-of-pocket or other such
requirements for the corresponding period under any Larscom health or other
Larscom Employee Plan, in each case for which the Continuing Employee is
otherwise eligible and in which the Continuing Employee is offered
participation, but except where such crediting would (i) result in a duplication
of benefits or (ii) otherwise cause Larscom or its Subsidiaries or any Larscom
Employee Plan or trust relating thereto to accrue or pay for benefits that
accrued in or are payable for any time period prior to the Effective Time.
Larscom agrees that each Continuing Employee shall be eligible to either: (A)
participate in Larscom Employee Plans as permitted by the terms of such Larscom
Employee Plans, (B) participate in VINA Employee Plans that are continued by
Larscom, or (C) a combination of clauses (A) and (B) so that each Continuing
Employee is eligible for benefits that are substantially similar in the
aggregate to those of similarly situated employees of Larscom, and so that no
Continuing Employee incurs a gap in coverage solely as a result of the Merger.
"CONTINUING EMPLOYEE" shall mean any employee of VINA who continues employment
with Larscom or the Surviving Corporation after the Effective Time. Nothing in
this Section 6.16 or elsewhere in this Agreement shall be construed to create a
right in any employee to employment with Larscom or the Surviving Corporation
and the employment
- 69 -
with any Continuing Employee shall be "at will" employment. Notwithstanding
anything in this Section 6.16 or in Section 6.17 or elsewhere in this Agreement
to the contrary, no Continuing Employees shall be eligible to participate in the
Xxxx Xxxxxxx Inc. Retirement Plan or the Xxxx Xxxxxxx Inc. Retirement
Restoration Plan.
6.17 Termination of Pension Plan. Effective immediately prior to
the Effective Time, VINA shall terminate any and all group severance, separation
or salary continuation plans, programs or arrangements, and shall terminate any
and all VINA Employee Plans which are intended to include a Code Section 401(k)
arrangement (unless Larscom consents, as evidenced by written notice to VINA,
to the continuation of any such plan, program or arrangement, which consent
shall not be unreasonably withheld) (collectively, "VINA TERMINATING PLAN(S)").
Larscom agrees that the Continuing Employees shall be eligible to participate,
to substantially the extent they were eligible to participate in any VINA
Terminating Plan, in the corresponding Larscom Employee Plan regarding group
severance, separation or salary continuation and in the corresponding Larscom
Employee Plan intended to include a Code Section 401(k) arrangement, program or
arrangement, as promptly following the Effective Time, as is permitted by the
terms of such Larscom Employee Plan, program or arrangement. Unless Larscom
provides such written consent to VINA, no later than three business days prior
to the Effective Time, VINA shall provide Larscom with evidence that such VINA
Terminating Plan(s) have been terminated (effective immediately prior to the
Effective Time) pursuant to resolutions of the VINA Board. The form and
substance of such resolutions shall be subject to review and approval of
Larscom. VINA also shall take such other actions in furtherance of terminating
such VINA Terminating Plan(s) as Larscom may reasonably require.
6.18 Tax Matters. At or prior to the filing of the Registration
Statement, Larscom and VINA shall execute and deliver to Xxxxxx Godward LLP and
to Pillsbury Winthrop LLP tax representation letters in customary form. Larscom
and VINA shall each confirm to Xxxxxx Godward LLP and to Pillsbury Winthrop LLP
the accuracy and completeness as of the Effective Time of the tax representation
letters delivered pursuant to the immediately preceding sentence. Larscom and
VINA shall use all reasonable efforts prior to the Effective Time to cause the
Merger to qualify as a tax-free reorganization under Section 368(a)(1) of the
Code. Following delivery of the tax representation letters pursuant to the first
sentence of this Section 6.20, each of Larscom and VINA shall use its reasonable
efforts to cause Cooley Godward LLP and Pillsbury Winthrop LLP, respectively, to
deliver to it a tax opinion satisfying the requirements of Item 601 of
Regulation S-K promulgated under the Securities Act. In rendering such opinions
and the opinions required pursuant to Sections 7.2(c) and 7.3(c), each of such
counsel shall be entitled to rely on the tax representation letters referred to
in this Section 6.18.
6.19 Registration Rights Agreement. Prior to the Closing, Larscom
shall enter into a Registration Rights Agreement, substantially in the form
attached hereto as Exhibit D, with the stockholders listed on the signature
pages thereto, which agreement will be effective at the Effective Time.
- 70 -
ARTICLE VII
CONDITIONS TO MERGER
7.1 Conditions to Each Party's Obligation To Effect the First
Merger. The respective obligations of each party to this Agreement to effect the
First Merger shall be subject to the satisfaction prior to the Closing Date of
the following conditions:
(a) Stockholder Approvals. The Larscom Voting Proposal
shall have been approved and adopted at the Larscom Meeting, at which a quorum
is present, by the requisite vote of the stockholders of Larscom under
applicable law, the rules of The Nasdaq Stock Market, Inc. and the Larscom
Charter Documents. The VINA Voting Proposal shall have been approved at the VINA
Meeting, at which a quorum is present, by the requisite vote of the stockholders
of VINA under applicable law, the rules of The Nasdaq Stock Market, Inc. and the
VINA Charter Documents.
(b) HSR Act. If applicable, the waiting period applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated.
(c) Governmental Approvals. Other than the filing of the
Certificate of Merger, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Entity in connection with the Merger and the consummation of the
other transactions contemplated by this Agreement, the failure of which to file,
obtain or occur is reasonably likely to have a VINA Material Adverse Effect or a
Larscom Material Adverse Effect shall have been filed, been obtained or occurred
on terms and conditions which are not reasonably be likely to have a VINA
Material Adverse Effect or a Larscom Material Adverse Effect.
(d) Registration Statement; Joint Proxy
Statement/Prospectus. The Registration Statement shall have become effective
under the Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose, and no similar proceeding with respect to the Joint Proxy
Statement/Prospectus, shall have been initiated or threatened in writing by the
SEC or its staff.
(e) No Injunctions or Proceedings. No Governmental Entity
of competent jurisdiction shall have (i) enacted, issued, promulgated, enforced
or entered any order, executive order, stay, decree, judgment or injunction
(preliminary or permanent) or statute, rule or regulation which is in effect and
which has the effect of making the First Merger illegal or otherwise prohibiting
consummation of the First Merger or the other transactions contemplated by this
Agreement or (ii) commenced any action or proceeding seeking any of the
foregoing.
(f) Nasdaq Notification. Larscom shall have submitted to
The Nasdaq Stock Market, Inc. a Notification Form: Listing of Additional Shares
with respect to the Larscom Common Stock to be issued pursuant to the
transactions contemplated by this Agreement.
- 71 -
7.2 Additional Conditions to the Obligations of VINA. The
obligations of VINA to effect the First Merger shall be subject to the
satisfaction on or prior to the Closing Date of each of the following additional
conditions, any of which may be waived in writing exclusively by VINA:
(a) Representations and Warranties. The representations
and warranties of Larscom and the Transitory Subsidiary set forth in this
Agreement and in any certificate or other writing delivered by Larscom or the
Transitory Subsidiary pursuant hereto shall be true and correct as of the
Closing Date as though made on and as of the Closing Date (except (x) to the
extent such representations and warranties are specifically made as of a
particular date, in which case such representations and warranties shall be true
and correct in all material respects as of such date, (y) for changes
contemplated by this Agreement, including the Larscom Disclosure Schedule hereto
and (z) where the failure to be true and correct (without regard to any
materiality, Larscom Material Adverse Effect or knowledge qualifications
contained therein), individually or in the aggregate, have not had, and are not
reasonably likely to have, a Larscom Material Adverse Effect; provided; however,
that the exception set forth in clause (iii) of the definition of Larscom
Material Adverse Effect shall not apply for any reason with respect to the
representations and warranties contained in Sections 4.7 and 4.22(b)), and VINA
shall have received a certificate signed on behalf of Larscom by the chief
executive officer or the chief financial officer of Larscom to such effect.
(b) Performance of Obligations of Larscom and the
Transitory Subsidiary. Larscom and the Transitory Subsidiary shall have
performed in all material respects all obligations required to be performed by
it under this Agreement on or prior to the Closing Date; and VINA shall have
received a certificate signed on behalf of Larscom by the chief executive
officer and the chief financial officer of Larscom to such effect.
(c) Tax Opinion. VINA shall have received the written
opinion of Pillsbury Winthrop LLP, counsel to VINA, to the effect that the
Merger will qualify as a reorganization within the meaning of Section 368(a) of
the Code; provided that if Pillsbury Winthrop LLP does not render such opinion,
this condition shall nonetheless be deemed satisfied if Xxxxxx Godward LLP,
counsel to Larscom, renders such opinion to VINA.
7.3 Additional Conditions to the Obligations of Larscom and
Transitory Subsidiary. The obligations of Larscom and the Transitory Subsidiary
to effect the First Merger shall be subject to the satisfaction on or prior to
the Closing Date of each of the following additional conditions, any of which
may be waived in writing exclusively by Larscom and the Transitory Subsidiary:
(a) Representations and Warranties. The representations
and warranties of VINA set forth in this Agreement and in any certificate or
other writing delivered by VINA pursuant hereto shall be true and correct as of
the Closing Date as though made on and as of the Closing Date (except (x) to the
extent such representations and warranties are specifically made as of a
particular date, in which case such representations and warranties shall be true
and correct in all material respects as of such date, (y) for changes
contemplated by this Agreement, including the VINA Disclosure Schedule hereto
and (z) where the failure to be true and correct (without regard to any
materiality, VINA Material Adverse Effect or knowledge qualifications
- 72 -
contained therein), individually or in the aggregate, have not had, and are not
reasonably likely to have, a VINA Material Adverse Effect; provided; however,
that the exception set forth in clause (iii) of the definition of VINA Material
Adverse Effect shall not apply for any reason with respect to the
representations and warranties contained in Sections 3.7 and 3.22(b)), and
Larscom shall have received a certificate signed on behalf of VINA by the chief
executive officer and the chief financial officer of VINA to such effect.
(b) Performance of Obligations of VINA. VINA shall have
performed in all material respects all obligations required to be performed by
them under this Agreement on or prior to the Closing Date, and Larscom shall
have received a certificate signed on behalf of VINA by the chief executive
officer and the chief financial officer of VINA to such effect.
(c) Tax Opinion. Larscom shall have received the written
opinion of Xxxxxx Godward LLP, counsel to Larscom, to the effect that the Merger
will qualify as a reorganization within the meaning of Section 368(a) of the
Code; provided that if Cooley Godward LLP does not render such opinion, this
condition shall nonetheless be deemed satisfied if Pillsbury Winthrop LLP,
counsel to VINA, renders such opinion to Larscom.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time (with respect to Sections 8.1(b) through 8.1(i), by
written notice by the terminating party to the other party), whether before or
after approval and adoption of the Larscom Voting Proposal by the stockholders
of Larscom or approval of the VINA Voting Proposal by the stockholders of
VINA:
(a) by mutual written consent duly authorized by the
Boards of Directors of VINA and Larscom; or
(b) by either VINA or Larscom if the Merger shall not
have been consummated by August 31, 2003 (the "OUTSIDE DATE") (provided that the
right to terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose action or failure to act, in breach of this
Agreement, has been a principal cause of or resulted in the failure of the
Merger to occur on or before the Outside Date); or
(c) by either VINA or Larscom if a Governmental Entity of
competent jurisdiction shall have issued a nonappealable final order, decree or
ruling or taken any other nonappealable final action, in each case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger; or
(d) by either VINA or Larscom if at the Larscom Meeting
(including any adjournment or postponement permitted by this Agreement), at
which a vote on the Larscom Voting Proposal is taken, the requisite vote of the
stockholders of Larscom in favor of the Larscom Voting Proposal shall not have
been obtained (provided that the right to terminate this Agreement under this
Section 8.1(d) shall not be available (x) to any party whose failure to fulfill
- 73 -
any obligation under this Agreement has been a principal cause of or resulted in
the failure to obtain such requisite vote or (y) to Larscom, if the failure to
obtain such requisite vote has been caused by a breach of the Larscom Voting
Agreement by any party thereto other than VINA); or
(e) by either VINA or Larscom if at the VINA Meeting
(including any adjournment or postponement permitted by this Agreement), at
which a vote on the VINA Voting Proposal is taken, the requisite vote of the
stockholders of VINA in favor of the VINA Voting Proposal shall not have been
obtained (provided that the right to terminate this Agreement under this Section
8.1(e) shall not be available (x) to any party whose failure to fulfill any
obligation under this Agreement has been a principal cause of or resulted in the
failure to obtain such requisite vote or (y) to VINA, if the failure to obtain
such requisite vote has been caused by a breach of the VINA Voting Agreement by
any party thereto other than Larscom); or
(f) by VINA, if: (i) the Larscom Board shall have
failed to give its recommendation to the approval of the Larscom Voting Proposal
in the Joint Proxy Statement/Prospectus or shall have withdrawn or modified in a
manner adverse to VINA its recommendation of the Larscom Voting Proposal; (ii)
the Larscom Board (or any committee thereof) shall have approved or recommended
to the stockholders of Larscom an Acquisition Proposal; (iii) a tender offer or
exchange offer for outstanding shares of Larscom Common Stock is commenced, and
the Larscom Board (or any committee thereof) (A) recommends that the
stockholders of Larscom tender their shares in such tender or exchange offer,
(B) within 10 business days after the commencement of such tender or exchange
offer, the Larscom Board fails to recommend rejection of such offer or (C) the
Larscom Board fails to reconfirm its recommendation of this Agreement or the
Merger within 10 business days after its receipt of a request by VINA to do so
following the public announcement of an Acquisition Transaction; or (iv) Larscom
shall have materially breached its obligations under Section 6.1 or Section 6.5
of this Agreement;
(g) by Larscom, if: (i) the VINA Board shall have failed
to give its recommendation to the approval of the VINA Voting Proposal in the
Joint Proxy Statement/Prospectus or shall have withdrawn or modified in a manner
adverse to Larscom its recommendation of the VINA Voting Proposal; (ii) the VINA
Board (or any committee thereof) shall have approved or recommended to the
stockholders of VINA an Acquisition Proposal; (iii) a tender offer or exchange
offer for outstanding shares of VINA Common Stock is commenced, and the VINA
Board (or any committee thereof) (A) recommends that the stockholders of VINA
tender their shares in such tender or exchange offer, (B) within 10 business
days after the commencement of such tender or exchange offer, the VINA Board
fails to recommend rejection of such offer, or (C) the VINA Board fails to
reconfirm its recommendation of this Agreement or the Merger within 10 business
days after its receipt of a request by Larscom to do so following the public
announcement of an Acquisition Transaction; or (iv) VINA shall have materially
breached its obligations under Section 6.1 or Section 6.5 of this Agreement;
(h) by VINA, if at anytime prior to the VINA Meeting
(i) the VINA Board shall have failed to give its recommendation to the approval
of the VINA Voting Proposal in the Joint Proxy Statement/Prospectus or shall
have withdrawn or modified in a manner adverse to Larscom its recommendation of
the VINA Voting Proposal or (ii) the VINA Board (or any
- 74 -
committee thereof) shall have approved or recommended to the stockholders of
VINA an Acquisition Proposal, so long as (A) the VINA Board has determined in
good faith, after consultation with outside and independent legal and financial
advisors, that an Acquisition Proposal is a Superior Proposal (and the
Acquisition Proposal did not result from a breach of Section 6.1) and, after
consultation with independent legal counsel, determines in good faith that such
action is required for the VINA Board to comply with its fiduciary obligations
to stockholders under applicable law and (B) VINA pays to Larscom all amounts
due under Section 8.3;
(i) by Larscom, if at anytime prior to the Larscom
Meeting (i) the Larscom Board shall have failed to give its recommendation to
the approval of the Larscom Voting Proposal in the Joint Proxy
Statement/Prospectus or shall have withdrawn or modified in a manner adverse to
VINA its recommendation of the Larscom Voting Proposal or (ii) the Larscom Board
(or any committee thereof) shall have approved or recommended to the
stockholders of Larscom an Acquisition Proposal, so long as (A) the Larscom
Board has determined in good faith, after consultation with outside and
independent legal and financial advisors, that an Acquisition Proposal is a
Superior Proposal (and the Acquisition Proposal did not result from a breach of
Section 6.1) and, after consultation with independent legal counsel, determines
in good faith that such action is required for the Larscom Board to comply with
its fiduciary obligations to stockholders under applicable law and (B) Larscom
pays to VINA all amounts due under Section 8.3;
(j) by VINA, if there has been a breach of or failure
to perform any representation, warranty, covenant or agreement on the part of
Larscom set forth in this Agreement or if any such representation or warranty
shall be untrue as of the date of this Agreement or shall have become untrue as
of a date subsequent to the date of this Agreement (as if made on such
subsequent date), which breach or failure (i) would cause the conditions set
forth in Section 7.2(a) or (b) not to be satisfied as of the time of such breach
or failure or as of the time any such representation or warranty shall have
become untrue, and (ii) shall not have been cured within 20 days following
receipt by Larscom of written notice of such breach from VINA (it being agreed
that VINA may not terminate this Agreement pursuant to this paragraph (j) if it
shall be in material breach of this Agreement or if such breach by Larscom is
cured during such 20 day period); and
(k) by Larscom, if there has been a breach of or failure
to perform any representation, warranty, covenant or agreement on the part of
VINA set forth in this Agreement or if any such representation or warranty shall
be untrue as of the date of this Agreement or shall have become untrue as of a
date subsequent to the date of this Agreement (as if made on such subsequent
date), which breach or failure (i) would cause the conditions set forth in
Section 7.3(a) or (b) not to be satisfied as of the time of such breach or
failure or as of the time any such representation or warranty shall have become
untrue, and (ii) shall not have been cured within 20 days following receipt by
VINA of written notice of such breach from Larscom (it being agreed that Larscom
may not terminate this Agreement pursuant to this paragraph (k) if it shall be
in material breach of this Agreement or if such breach by VINA is cured during
such 20 day period).
- 75 -
8.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall immediately become
void and there shall be no liability or obligation on the part of VINA,
Larscom, the Transitory Subsidiary or their respective officers, directors,
stockholders or Affiliates, provided that (i) any such termination shall not
relieve any party from liability for any willful or intentional breach of this
Agreement, and (ii) the provisions of this Section 8.2, Section 8.3 and Article
IX of this Agreement and the Confidentiality Agreement shall remain in full
force and effect and survive any termination of this Agreement.
8.3 Fees and Expenses.
(a) Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees and expenses,
whether or not the Merger is consummated; provided, however, that Larscom and
VINA shall share equally (i) the aggregate filing fees of both parties'
pre-merger notification report under the HSR Act, if applicable, and (ii) all
fees and expenses, other than accountants' and attorneys' fees, incurred with
respect to the printing and filing of the Joint Proxy Statement/Prospectus
(including any related preliminary materials) and the Registration Statement and
any amendments or supplements thereto.
(b) Larscom shall pay VINA a termination of $185,000 in
the event of the termination of this Agreement by (i) VINA or Larscom pursuant
to Section 8.1(d), (ii) by VINA pursuant to Section 8.1(f) or (iii) by Larscom
pursuant to Section 8.1(i). The termination fees due under this Section 8.3(b)
shall be paid by wire transfer of same-day funds (A) within two business days
after the date of termination of this Agreement pursuant to Section 8.1(d) or
Section 8.1(f) and (B) prior to the date of termination of this Agreement
pursuant to Section 8.1(i).
(c) VINA shall pay Larscom a termination of $185,000 in
the event of the termination of this Agreement by (i) Larscom or VINA pursuant
to Section 8.1(e), (ii) by Larscom pursuant to Section 8.1(g) or (iii) VINA
pursuant to Section 8.1(h). The termination fees due under this Section 8.3(c)
shall be paid by wire transfer of same-day funds (A) within two business days
after the date of termination of this Agreement pursuant to Section 8.1(e) or
Section 8.1(g) and (B) prior to the date of termination of this Agreement
pursuant to Section 8.1(h).
(d) For purposes of this Agreement, "ACQUISITION
TRANSACTION" shall mean any of the following transactions (other than the
transaction contemplated by this Agreement): (i) a sale or other disposition by
VINA or Larscom of business or assets representing more than 50% of its net
revenues, net income or assets immediately prior to such sale; (ii) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by VINA or Larscom), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of more than 50%
of the outstanding voting power or equity interest in VINA or Larscom; or (iii)
a merger, consolidation, business combination or similar transaction involving
VINA or Larscom in which the stockholders of VINA or Larscom, as the case may
be, own less than a majority of the voting power or equity interest in the
surviving or acquiring entity in such transaction.
- 76 -
(e) The parties acknowledge that the agreements contained
in this Section 8.3 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, the parties would not enter
into this Agreement. If one party fails to promptly pay to the other any
termination fee due hereunder, the defaulting party shall pay the costs and
expenses (including legal fees and expenses) in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid fee at the publicly
announced prime rate of Citibank, N.A., plus two percent per annum, compounded
quarterly, from the date such termination fee was required to be paid. Payment
of the termination fee described in this Section 8.3 shall not be in lieu of
damages incurred in the event of a breach of this Agreement described in clause
(i) of Section 8.2.
8.4 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of any of the parties; provided, however, that
after any such approval, no amendment shall be made which by applicable law
requires further approval by such stockholders without such further approval;
and provided, further, that an amendment made subsequent to adoption of the
Agreement by the stockholders of Larscom or VINA without such further approval
shall not (a) alter or change the amount or kind of consideration to be received
upon conversion of the VINA Common Stock, (b) alter or change any term of the
certificate of incorporation of the Surviving Corporation to be effected by the
Merger, or (c) alter or change any of the terms and conditions of the Agreement
if such alteration or change would adversely affect the stockholders of Larscom
or VINA. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
8.5 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions 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 a written instrument signed on behalf of such party. No extension
or waiver in any one instance shall be deemed to extend to any prior or
subsequent instance. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
ARTICLE IX
MISCELLANEOUS
9.1 Nonsurvival of Representations and Warranties. The respective
representations and warranties of Larscom, the Transitory Subsidiary and VINA
contained in this Agreement or in any instrument delivered pursuant to this
Agreement shall expire with, and be terminated and extinguished upon, the
Effective Time and only the covenants that by their terms survive the Effective
Time shall survive the Effective Time. This Section 9.1 shall have no effect
upon any other obligations of the parties hereto, whether to be performed before
or after the consummation of the Merger.
- 77 -
9.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly delivered (a) four business days after
being sent by registered or certified mail, return receipt requested, postage
prepaid, or (b) one business day after being sent for next business day
delivery, fees prepaid, via a reputable nationwide overnight courier service or
(c) if delivered by facsimile transmission to the facsimile number as provided
for in this Section 9.2, be deemed given upon facsimile confirmation during
business hours or if after business hours, then one business day after facsimile
confirmation, in each case to the intended recipient as set forth below:
(i) if to VINA, to
VINA Technologies, Inc.
00000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
with a copy to:
Pillsbury Winthrop LLP
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
(ii) if to Larscom or the Transitory Subsidiary, to
Larscom Incorporated
0000 XxXxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
with a copy to:
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Any party to this Agreement may give any notice or other communication
hereunder using any other means (including personal delivery, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice or other
communication shall be deemed to have been duly given unless and until it
actually is received by the party for whom it is intended. Any party to this
Agreement may change the address to which notices and other communications
- 78 -
hereunder are to be delivered by giving the other parties to this Agreement
notice in the manner herein set forth.
9.3 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto and the documents and instruments referred to herein that are to
be delivered at the Closing) constitutes the entire agreement among the parties
to this Agreement and supersedes any prior understandings, agreements or
representations by or among the parties hereto, or any of them, written or oral,
with respect to the subject matter hereof; provided that the Confidentiality
Agreement shall remain in effect in accordance with its terms.
9.4 No Third Party Beneficiaries. Except as provided in Section
6.12, this Agreement is not intended, and shall not be deemed, to confer any
rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns, to create any agreement of
employment with any person or to otherwise create any third-party beneficiary
hereto.
9.5 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties hereto
without the prior written consent of the other parties, and any such assignment
without such prior written consent shall be null and void. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto and their respective successors
and permitted assigns.
9.6 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior sentence, the parties hereto
agree to replace such invalid or unenforceable term or provision with a valid
and enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.
9.7 Counterparts and Signature. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties hereto and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart. This Agreement may be executed and delivered by
facsimile transmission.
9.8 Interpretation. When reference is made in this Agreement to an
Article or a Section, such reference shall be to an Article or Section of this
Agreement, unless otherwise indicated. The table of contents, table of defined
terms and headings contained in this
- 79 -
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction shall be applied
against any party. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa. Any reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Whenever the words "INCLUDE,"
"INCLUDES" or "INCLUDING" are used in this Agreement, they shall be deemed to be
followed by the words "WITHOUT LIMITATION." No summary of this Agreement
prepared by any party shall affect the meaning or interpretation of this
Agreement. For purposes of this Agreement, (a) the term "KNOWLEDGE" means with
respect to a party hereto, with respect to any matter in question, that any of
the executive officers of such party and the executive officers of each of its
Subsidiaries has actual knowledge of such matter; and (b) the term "PERSON"
shall mean any individual, corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization,
entity or Governmental Entity.
9.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
laws of any jurisdictions other than those of the State of Delaware.
9.10 Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity.
9.11 Waiver of Jury Trial. EACH OF VINA, THE TRANSITORY
SUBSIDIARY AND LARSCOM HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE ACTIONS OF VINA, THE TRANSITORY SUBSIDIARY OR
LARSCOM IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS]
- 80 -
IN WITNESS WHEREOF, each of VINA, the Transitory Sub and Larscom has
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
VINA TECHNOLOGIES, INC.
By: /s/ W. Xxxxxxx Xxxx
--------------------------
Name: W. Xxxxxxx Xxxx
Title: Chief Executive Officer
LONDON ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
LARSCOM INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
[Signature page to Merger Agreement]
- 81 -
