INVESTOR AGREEMENT
THIS INVESTOR AGREEMENT (this "Agreement") dated as of March 17, 2003 is by
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and between Concorde Equity, LLC (the "Investor") with an address of 0000 Xxx
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Xxxxxxx, Xxxxx Xxxxxx, XX 00000 and Telaxis Communications Corporation, a
Massachusetts corporation ("Telaxis") with an address of 00 Xxxxxxxxxx Xxxxx
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Xxxx, Xxxxx Xxxxxxxxx, XX 00000.
RECITALS
A. Concurrently with the execution of this Agreement, Telaxis has entered
into an Agreement and Plan of Merger (as the same may be amended from time to
time, the "Merger Agreement"), providing for the merger of a to-be-formed
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Virginia corporation and wholly owned subsidiary of Telaxis ("Merger Sub") with
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and into Young Design, Inc., a Virginia corporation (the "Company"), wherein the
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Company will be the surviving corporation and become a wholly owned subsidiary
of Telaxis (the "Merger") pursuant to the terms and conditions of the Merger
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Agreement.
B. The Investor owns of record and beneficially 8,265,307 outstanding
shares of capital stock of the Company (the "Shares") and wishes to enter into
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this Agreement with respect to all of such Shares and any additional shares
hereafter acquired by the Investor or which the Investor becomes entitled to
vote, whether through contract, purchase, exercise of an option, or otherwise
("Additional Shares").
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C. In order to induce Telaxis to enter into the Merger Agreement, the
Investor has agreed to enter into this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt,
sufficiency, and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. Shares Voted; Agreement to Vote Shares. The Investor represents and
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warrants that the Investor has voted all the Shares to approve and adopt the
Merger Agreement, the Merger, and the other transactions contemplated thereby at
a duly held meeting of the stockholders of the Company or pursuant to a written
consent signed by all the stockholders of the Company. The Investor has
delivered, or caused to be delivered, to Telaxis a true, complete and correct
copy of the minutes of such meeting or of such written consent, as the case may
be. Subject to Section 13 below, the Investor agrees not to, directly or
indirectly through any proxy or other means, except at the request of Telaxis
(a) rescind, amend, supplement, modify, supercede, or otherwise seek to
invalidate the votes described in the preceding two sentences in any way, (b)
fail to vote, at any stockholder meeting or by written consent, any Shares or
any Additional Shares in favor of the approval and adoption of the Merger
Agreement, the Merger, and the other transactions contemplated thereby, or (c)
vote, at any stockholder meeting or by written consent, any Shares or any
Additional Shares in favor of the approval of any (i) reorganization,
recapitalization, liquidation, or winding up of the Company or any other
extraordinary transaction involving the Company, (ii) corporate action the
consummation of which would frustrate the purposes, or prevent or delay the
consummation, of the transactions contemplated by the Merger Agreement, or (iii)
other matter relating to, or in connection with, any of the foregoing matters.
The Investor hereby waives any dissenter's rights or rights of appraisal it has
or may have in connection with the Merger Agreement, the Merger, and the other
transactions contemplated thereby.
2. Irrevocable Proxy. The Investor hereby revokes any and all previous
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proxies granted with respect to the Shares and/or any Additional Shares. The
Investor hereby grants a proxy appointing Telaxis as the Investor's
attorney-in-fact and proxy, with full power of substitution, for and in the
Investor's name, to vote, express consent or dissent, or otherwise to utilize
such voting power in such manner and upon such matters as Telaxis or its proxy
or substitute shall, in Telaxis' sole discretion, deem proper with respect to
the Shares and the Additional Shares. Simultaneously with the execution and
delivery of this Agreement, the Investor is delivering to Telaxis a proxy in the
form of Annex A hereto. The proxy granted by the Investor pursuant to this
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Section 2 is irrevocable to the extent permitted by Virginia law, is coupled
with an interest, and is granted in consideration of Telaxis' entering into the
Merger Agreement and incurring certain related fees and expenses. The proxy
hereby granted by the Investor shall terminate in accordance with Section 8
below. The provisions of this Section 2 are subject to Section 13 below.
3. Representations and Warranties. The Investor hereby represents and
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warrants to Telaxis as follows:
(a) Valid Title. The Investor is the sole, true, lawful record and
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beneficial owner of the Shares, and there are no restrictions on the Investor's
voting rights with respect thereto or contractual restrictions on the Investor's
rights of disposition with respect thereto. None of the Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shares.
(b) Non-Contravention. The execution, delivery and performance
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by the Investor of this Agreement and the consummation by the Investor of the
transactions contemplated hereby (i) are within the Investor's power and have
been duly authorized by all necessary action (including any approval or other
action by or with any other person), (ii) require no action by or in respect of,
or filing with, any governmental body, agency, official or authority, (iii) do
not and will not violate any contract, agreement, statute, rule, or regulation
applicable to the Investor or any injunction, order, or decree binding on the
Investor, and (iv) will not result in the imposition of any lien on any Shares
or Additional Shares.
(c) Binding Obligation. This Agreement has been duly executed and
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delivered by the Investor and is the valid and binding agreement of the
Investor, enforceable against the Investor in accordance with its terms, except
as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity. If this Agreement is being executed in a
representative or fiduciary capacity, the person signing this Agreement
represents that he has full power and authority to enter into and perform this
Agreement.
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(d) Accredited Investor. The Investor is an "accredited investor" as
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defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended
(the "Securities Act").
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(e) Sufficient Knowledge. The Investor is aware of Telaxis' business
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affairs and financial condition and has acquired sufficient information about
Telaxis to reach an informed and knowledgeable decision to approve the Merger
Agreement, the Merger, and the other transactions contemplated thereby. The
Investor has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of acquiring Telaxis stock
pursuant to the Merger (the "Acquired Stock"). The Investor recognizes that
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acquiring the Acquired Stock involves a high degree of risk which may result in
the loss of the total amount of the investment. The Investor is able to bear the
economic risks of acquiring the Acquired Stock. The Investor acknowledges that
the Investor and its representatives have been granted the opportunity to ask
questions of, and receive answers from, management of Telaxis concerning
Telaxis, the Acquired Stock, and the terms and conditions of the Merger and to
obtain any additional information that Telaxis possessed or could have acquired
without unreasonable effort or expense that the Investor deemed necessary to
verify the accuracy of the information furnished to it.
(f) Intent of Acquisition and Restricted Nature of Acquired Stock. The
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Investor is acquiring the Acquired Stock pursuant to the Merger for its own
account only for investment only and not for, with a view to, or in connection
with the distribution or resale thereof. The Investor is aware that the Acquired
Stock constitutes "restricted securities" within the meaning of Rule 144
promulgated under the Securities Act and that it must bear the economic risk
related to the Acquired Stock for an indefinite period of time because the
Acquired Stock has not been registered under the Securities Act or under the
securities laws of any state, and, therefore, cannot be sold unless it is
subsequently registered under the Securities Act and any applicable state
securities laws or an exemption from registration is available. The Investor
understands and agrees that the following restrictions and limitations are
applicable to the purchase and resales, pledges, hypothecations or other
transfers of the Acquired Stock:
(i) The Investor agrees that the Acquired Stock shall not be
sold, pledged, hypothecated, or otherwise transferred unless it is registered
under the Securities Act and applicable state securities laws or an exemption
from such registration is available.
(ii) The Investor understands that the certificate(s)
representing the Acquired Stock will be imprinted with a legend which prohibits
transfers of the Acquired Stock unless it has been registered or such
registration is not required in the opinion of counsel for Telaxis.
(iii) Stop transfer instructions have been or will be placed
with respect to the Acquired Stock so as to restrict the resale, pledge,
hypothecation, or other transfer thereof.
(g) No Other Representations. The Investor has received no
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representations from Telaxis, its directors, officers, employees, or agents
other than as set forth in the Merger Agreement and, in making the decision to
approve the Merger Agreement, the Merger, and the other transactions
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contemplated thereby, has relied solely upon the representations in the Merger
Agreement and independent investigations made by the Investor without the
assistance of Telaxis or its directors, officers, employees, or agents.
4. No Proxies for or Encumbrances on the Investor's Shares. subject to
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Section 13 below, the Investor shall not, without the prior written consent of
Telaxis, directly or indirectly, (i) grant any proxies or enter into any voting
trust or other agreement or arrangement with respect to the voting of any Shares
or Additional Shares or (ii) sell, assign, transfer, encumber or otherwise
dispose of, or solicit the sale, assignment, transfer, encumbrance or other
disposition of, or enter into any contract, option or other arrangement or
understanding with respect to the direct or indirect sale, assignment, transfer,
encumbrance or other disposition of, any Shares or Additional Shares.
The Investor agrees to (a) comply with Section 5.3(a) of the Merger
Agreement and the Confidentiality Agreement (as defined in the Merger Agreement)
to the same extent as such Section 5.3(a) and such agreement apply to the
Company and (b) notify Telaxis promptly and to provide all details required by
Telaxis if the Investor shall be approached or solicited, directly or
indirectly, by any person with respect to any of the matters addressed in this
Section 4.
5. Conduct of Investor. The Investor agrees that the Investor will not
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(i) take, or commit to take, any action that would make any representation and
warranty of the Investor hereunder inaccurate in any respect as of any time
prior to the termination of this Agreement or (ii) omit, or commit to omit, to
take any action that is within the Investor's power and that is necessary to
prevent any such representation or warranty from being inaccurate in any respect
at any such time.
6. Indemnification. The Investor acknowledges that it understands the
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meaning and legal consequences of the representations, warranties, and covenants
set forth in this Agreement and that Telaxis and its directors, officers,
agents, and employees have relied or will rely upon such representations,
warranties, and covenants, and hereby agrees to indemnify and hold harmless
Telaxis and its officers, directors, agents and employees from and against any
and all loss, claim, damage, liability, or expense, and any action in respect
thereof, joint or several, to which any such person may become subject, due to
or arising out of breach of any such representation, warranty, or covenant,
whenever occurring, together with all reasonable costs and expenses (including
attorneys fees) incurred by demand, assessment, or judgment incident to any of
the matters so indemnified against. All representations, warranties, and
covenants contained in this Agreement, and the indemnification contained in this
Section 6, shall survive the consummation of the Merger.
7. Specific Performance. The Investor acknowledges that it would be
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impossible to measure in money the damage to Telaxis if the Investor fails to
comply with the obligations imposed by this Agreement, and that, in the event of
any such failure, Telaxis would not have an adequate remedy at law or in
damages. Accordingly, the Investor agrees that injunctive relief or other
equitable remedy, in addition to remedies at law or in damages, is the
appropriate remedy for any such failure and will not oppose the granting of such
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relief on the basis that Telaxis has an adequate remedy at law or in damages.
The Investor agrees that the Investor will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in connection with Telaxis'
seeking or obtaining such equitable relief.
8. Term of Agreement; Termination. Subject to Section 12(e), the term
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of this Agreement shall commence on the date hereof, and the term of this
Agreement and the proxy(ies) granted in and pursuant to Section 2 hereof shall
terminate upon the earlier to occur of (i) the Effective Time (as defined in the
Merger Agreement) or (ii) the date on which the Merger Agreement is terminated
in accordance with its terms. Upon such termination, no party shall have any
further obligations or liabilities hereunder; provided, that such termination
shall not relieve any party from liability for any breach of this Agreement
prior to such termination.
9. Further Assurances. The Investor shall use its reasonable best
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efforts, and shall cause the Company to use its reasonable best efforts, to
effectuate the Merger and the other transactions contemplated by the Merger
Agreement and to fulfill and cause to be fulfilled the conditions to closing
under the Merger Agreement. The Investor will execute and deliver or cause to be
executed and delivered such further documents and instruments and use the
Investor's best efforts to take such further actions as may be reasonably
necessary in order to consummate the transactions contemplated hereby or by the
Merger Agreement or to enable Telaxis and any assignee to exercise and enjoy all
voting rights of the Investor with respect to the Shares and any Additional
Shares. The provisions of this Section 9 are subject to Section 13 below.
10. Entire Agreement. This Agreement supersedes all prior agreements,
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written or oral, between the parties hereto with respect to the subject matter
hereof and contains the entire agreement between the parties with respect to the
subject matter hereof. This Agreement may not be amended, supplemented, or
modified, and no provisions hereof may be modified or waived, except by an
instrument in writing signed by the parties hereto. No waiver of any provision
hereof by any party shall be deemed a waiver of any other provision hereof by
such party, nor shall any such waiver be deemed a continuing waiver of any
provision hereof by such party.
11. Notices. All notices, requests, claims, demands, or other
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communications hereunder shall be in writing and shall be deemed given when
delivered personally, upon receipt of a transmission confirmation if sent by
facsimile or like transmission (with confirmation), and on the next business day
when sent by Federal Express, Express mail, or other reputable overnight courier
service to the parties at the addresses shown in the introductory paragraph of
this Agreement (or at such other address for a party as shall be specified by
like notice).
12. Miscellaneous.
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(a) This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the laws of the Commonwealth
of Virginia, without regard to its principles of conflicts of laws. Any dispute
or controversy arising out of or relating to this Agreement, any document or
instrument delivered pursuant to or in connection herewith, or any breach of
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this Agreement or any such document or instrument shall be resolved exclusively
(as to court proceedings initiated by the Company or the Investor, including any
counterclaims or crossclaims later brought by Telaxis) in the state or federal
courts whose local geographic jurisdiction includes South Deerfield,
Massachusetts, or exclusively (as to court proceedings initiated by Parent,
including any counterclaims or crossclaims later brought by the Company or the
Investor) in the state or federal courts whose local geographic jurisdiction
includes Fairfax County, Virginia. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction of any such state or federal court in
connection with any matter based upon or arising out of this Agreement or the
matters contemplated herein, agrees that process may be served upon them in any
manner authorized by the laws of the Commonwealth of Virginia or the
Commonwealth of Massachusetts, as the case may be, for such persons, and waives
and covenants not to assert or plead any objection which they might otherwise
have to such forum, such jurisdiction and such process. Each party hereto hereby
agrees that mailing of process or other papers in connection with any such
action, suit or proceeding in the manner provided in Section 11, or in such
other manner as may be permitted by law, shall be valid and sufficient service
thereof.
(b) If any provision of this Agreement or the application of such
provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be
unenforceable only to the extent of such invalidity or unenforceability, and the
remainder of the provisions not held invalid or unenforceable and the
application of such provisions to persons or circumstances other than the party
as to which it is held invalid, and the remainder of this Agreement, shall not
be affected.
(c) This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart. A facsimile or copy of a signature is valid as an
original.
(d) All Section headings herein are for convenience of reference
only and are not part of this Agreement, and no construction or reference shall
be derived therefrom.
(e) The obligations of the Investor set forth in this Agreement
shall not be effective or binding upon the Investor until after such time as the
Merger Agreement is executed and delivered by Telaxis and the Company.
13. Superior Proposals. Notwithstanding the provisions of the third
sentence of Section 1 and all of Sections 2, 4, and 9 of this Agreement, the
Investor may vote to approve any "Superior Transaction" (as that term is defined
in Section 5.3(a)(ii) of the Merger Agreement) that the Board of Directors of
the Company has approved and recommended to the stockholders of the Company in
accordance with the provisions of Section 5.3(a) of the Merger Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
TELAXIS COMMUNICATIONS CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
Title: President and CEO
CONCORDE EQUITY, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Managing Member
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Annex A
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IRREVOCABLE PROXY
The undersigned, for consideration received, hereby appoints Telaxis
Communications Corporation, a Massachusetts corporation ("Telaxis"), its proxy,
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with full power of substitution, to vote, at any meeting of stockholders
(including any adjournment thereof) or pursuant to any written consent, all
shares of capital stock owned or later acquired by the undersigned, and all
shares that the undersigned is or becomes entitled to vote pursuant to contract,
trust, deed, or otherwise, of Young Design, Inc., a Virginia corporation (the
"Company"), FOR any and all proposals to approve and adopt the Agreement and
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Plan of Merger, dated as of March 17, 2003 (the "Merger Agreement"), by and
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between Telaxis and the Company, the Merger (as defined in the Merger
Agreement), and all agreements and actions related to the Merger. This proxy is
subject to the terms of the Investor Agreement, dated as of March 17, 2003 (the
"Investor Agreement"), between the undersigned and Telaxis (a copy of which is
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attached hereto), is coupled with an interest, revokes all prior proxies granted
by the undersigned with respect to such shares, is irrevocable, and shall
terminate and be of no further force or effect automatically at such time as the
Investor Agreement terminates in accordance with its terms. Notwithstanding the
foregoing provisions of this Irrevocable Proxy, the Investor may vote the shares
subject to this Irrevocable Proxy to approve any "Superior Transaction" (as that
term is defined in Section 5.3(a)(ii) of the Merger Agreement) that the Board of
Directors of the Company has approved and recommended to the stockholders of the
Company in accordance with the provisions of Section 5.3(a) of the Merger
Agreement.
Dated: March 17, 2003
CONCORDE EQUITY, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Managing Member
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