Exhibit 2
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AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 1, 2001
BY AND AMONG
GLOBESPAN, INC.,
WINE ACQUISITION CORP.
AND
VIRATA CORPORATION
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TABLE OF CONTENTS
Page
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ARTICLE I CERTAIN DEFINITIONS ........................................ 1
ARTICLE II THE MERGER ................................................. 8
2.1 The Merger ................................................. 8
2.2 Effective Time of the Merger ............................... 8
2.3 Effects of the Merger ...................................... 8
2.4 Closing .................................................... 8
2.5 Certificate of Incorporation ............................... 9
2.6 By-Laws .................................................... 9
2.7 Directors and Officers ..................................... 9
ARTICLE III CONVERSION OF SECURITIES ................................... 9
3.1 Exchange Ratio ............................................. 9
3.2 Stock Options, Warrants and Equity-Based Awards ............ 10
3.3 Exchange Fund .............................................. 11
3.4 Exchange Procedures ........................................ 11
3.5 Distributions with Respect to Unexchanged Shares ........... 12
3.6 No Further Ownership Rights in Virata Common Stock ......... 12
3.7 No Fractional Shares of Globespan Common Stock ............. 12
3.8 Termination of Exchange Fund ............................... 13
3.9 No Liability ............................................... 13
3.10 Investment of the Exchange Fund ............................ 13
3.11 Lost Certificates .......................................... 13
3.12 Withholding Rights ......................................... 13
3.13 Further Assurances ......................................... 14
3.14 Stock Transfer Books ....................................... 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES ............................. 14
4.1 Representations and Warranties of Virata ................... 14
(a) Corporate Organization ............................ 14
(b) Capitalization .................................... 15
(c) Authority; No Violation ........................... 16
(d) Consents and Approvals ............................ 16
(e) Financial Reports and SEC Documents ............... 17
(f) Absence of Undisclosed Liabilities ................ 17
(g) Absence of Certain Changes or Events .............. 18
(h) Legal Proceedings ................................. 18
(i) Compliance with Applicable Law .................... 18
(j) Contracts ......................................... 18
(k) Environmental Liability ........................... 19
-ii-
(l) Employee Benefit Plans; Labor Matters ................. 19
(m) Intellectual Property ................................. 21
(n) State Takeover Laws; Rights Agreement ................. 22
(o) Opinion of Financial Advisor .......................... 22
(p) Board Approval ........................................ 22
(q) Brokers' Fees ......................................... 22
(r) Taxes ................................................. 22
(s) Reorganization under the Code ......................... 23
(t) Form S-4; Joint Proxy Statement/Prospectus ............ 23
(u) Ownership of Globespan Stock .......................... 23
4.2 Representations and Warranties of Globespan ................. 24
(a) Corporate Organization ................................ 24
(b) Capitalization ........................................ 24
(c) Authority; No Violation ............................... 25
(d) Consents and Approvals ................................ 26
(e) Financial Reports and SEC Documents ................... 26
(f) Absence of Undisclosed Liabilities .................... 27
(g) Absence of Certain Changes or Events .................. 27
(h) Legal Proceedings ..................................... 28
(i) Compliance with Applicable Law ........................ 28
(j) Contracts ............................................. 28
(k) Environmental Liability ............................... 29
(l) Employee Benefit Plans; Labor Matters ................. 29
(m) Intellectual Property ................................. 31
(n) State Takeover Laws ................................... 31
(o) Opinion of Financial Advisor .......................... 31
(p) Board Approval ........................................ 32
(q) Brokers' Fees ......................................... 32
(r) Taxes ................................................. 32
(s) Reorganization under the Code ......................... 33
(t) Form S-4; Joint Proxy Statement/Prospectus ............ 33
(u) Ownership of Virata Stock ............................. 33
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS ................... 33
5.1 Covenants of Virata ......................................... 33
(a) Ordinary Course ....................................... 33
(b) Dividends; Changes in Share Capital ................... 34
(c) Issuance of Securities ................................ 34
(d) Governing Documents ................................... 34
(e) No Acquisitions ....................................... 34
(f) No Dispositions ....................................... 35
(g) Investments; Indebtedness ............................. 35
(h) Tax-Free Qualification ................................ 35
(i) Compensation .......................................... 35
(j) Accounting Methods; Tax Matters ....................... 35
(k) Litigation ............................................ 36
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(l) Intellectual Property .............................. 36
(m) Certain Actions .................................... 36
(n) No Related Actions ................................. 36
5.2 Covenants of Globespan ...................................... 36
(a) Ordinary Course .................................... 36
(b) Dividends, Changes in Share Capital ................ 37
(c) Issuance of Securities ............................. 37
(d) Governing Documents ................................ 37
(e) No Acquisitions .................................... 37
(f) No Dispositions .................................... 38
(g) Investments; Indebtedness .......................... 38
(h) Tax-Free Qualification ............................. 38
(i) Compensation ....................................... 38
(j) Accounting Methods; Tax Matters .................... 39
(k) Litigation ......................................... 39
(l) Intellectual Property .............................. 39
(m) Certain Actions .................................... 39
(n) No Related Actions ................................. 39
5.3 Governmental Filings ........................................ 39
5.4 Control of Other Party's Business ........................... 39
ARTICLE VI ADDITIONAL AGREEMENTS ....................................... 40
6.1 Preparation of Proxy Statement; Stockholders Meetings ....... 40
6.2 Globespan Board of Directors and Officers; Headquarters;
Integration and Transition ................................ 41
6.3 Access to Information ....................................... 43
6.4 Reasonable Commercial Efforts ............................... 43
6.5 Acquisition Proposals ....................................... 45
6.6 Fees and Expenses ........................................... 46
6.7 Directors' and Officers' Indemnification and Insurance ...... 46
6.8 Employee Benefits ........................................... 47
6.9 Public Announcements ........................................ 49
6.10 Listing of Shares of Globespan Common Stock ................. 49
6.11 Affiliates .................................................. 49
6.12 Section 16 Matters .......................................... 49
6.13 Notification of Certain Matters ............................. 49
6.14 Accountants' Letters ........................................ 50
6.15 Rights Agreement ............................................ 50
ARTICLE VII CONDITIONS PRECEDENT ........................................ 50
7.1 Conditions to Each Party's Obligation to Effect the Merger .. 50
(a) Stockholder Approval ............................... 50
(b) No Injunctions or Restraints; Illegality ........... 50
(c) HSR Act; Other Approvals ........................... 50
(d) NASDAQ Listing ..................................... 51
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(e) Effectiveness of the Form S-4 ......................... 51
7.2 Additional Conditions to Obligations of Globespan ........... 51
(a) Representations and Warranties ........................ 51
(b) Performance of Obligations ............................ 51
(c) Tax Opinion ........................................... 51
7.3 Additional Conditions to Obligations of Virata .............. 51
(a) Representations and Warranties ........................ 52
(b) Performance of Obligations ............................ 52
(c) Tax Opinion ........................................... 52
ARTICLE VIII TERMINATION AND AMENDMENT ................................... 52
8.1 Termination ................................................. 52
8.2 Effect of Termination ....................................... 53
8.3 Amendment ................................................... 55
8.4 Extension; Waiver ........................................... 55
ARTICLE IX GENERAL PROVISIONS .......................................... 55
9.1 Non-Survival of Representations, Warranties and Agreements .. 55
9.2 Notices ..................................................... 55
9.3 Interpretation .............................................. 56
9.4 Counterparts ................................................ 56
9.5 Entire Agreement; No Third Party Beneficiaries .............. 57
9.6 Governing Law ............................................... 57
9.7 Severability ................................................ 57
9.8 Assignment .................................................. 57
9.9 Submission to Jurisdiction; Waivers ......................... 57
9.10 Enforcement ................................................. 58
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LIST OF EXHIBITS
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Exhibit Title
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Exhibit A Forms of Stockholders Agreement
Exhibit B Form of Affiliate Agreement
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AGREEMENT AND PLAN OF MERGER, dated as of October 1, 2001 (this
"Agreement"), by and among GLOBESPAN, INC., a Delaware corporation
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("Globespan"), WINE ACQUISITION CORP., a Delaware corporation and wholly owned
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Subsidiary of Globespan ("Merger Sub"), and VIRATA CORPORATION, a Delaware
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corporation ("Virata").
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W I T N E S S E T H:
WHEREAS, the Boards of Directors of Globespan and Virata have approved
the combination of Globespan and Virata in a merger-of-equals transaction;
WHEREAS, the Boards of Directors of Globespan, Merger Sub and Virata
have approved the merger of Merger Sub with and into Virata (the "Merger"), upon
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the terms and subject to the conditions set forth herein;
WHEREAS, the Boards of Directors of Globespan and Virata have approved
the terms of the Stockholders Agreements attached hereto as Exhibit A to be
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entered into, simultaneously herewith, among Globespan, Virata and certain
holders of Globespan Common Stock and Virata Common Stock; and
WHEREAS, for 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, and the rules and regulations
promulgated thereunder (the "Code").
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NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings set forth below:
"Acquisition Proposal" shall have the meaning set forth in Section
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6.5(a)(i).
"Affiliate Agreement" shall have the meaning set forth in Section
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6.11.
"Agreement" shall have the meaning set forth in the Preamble.
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"beneficial ownership" or "beneficially own" shall have the meaning
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ascribed to such terms under Section 13(d) of the Exchange Act and the rules and
regulations thereunder.
"Benefit Plan" means, with respect to any entity, any employee benefit
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plan, program, policy, practice, agreement, contract or other arrangement
providing benefits to any current or former employee, officer or director of
such entity or any of its affiliates or any beneficiary or dependent thereof
that is sponsored or maintained by such entity or any of its
affiliates or to which such entity or any of its affiliates contributes or is
obligated to contribute, whether or not written, including any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA, any employee pension
benefit plan within the meaning of Section 3(2) of ERISA (whether or not such
plan is subject to ERISA), any employment or severance agreement, and any bonus,
incentive, deferred compensation, vacation, stock purchase, stock option,
severance, change of control or fringe benefit plan, program or policy.
"Business Day" means any day on which banks are not required or
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authorized to close in the City of New York, New York.
"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act of 1980, as amended, and rules and regulations promulgated
thereunder.
"Certificate of Merger" shall have the meaning set forth in Section
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2.2.
"Change in the Globespan Recommendation" shall have the meaning set
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forth in Section 6.1(c).
"Change in the Virata Recommendation" shall have the meaning set forth
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in Section 6.1(b).
"Closing" shall have the meaning set forth in Section 2.2.
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"Closing Date" shall have the meaning set forth in Section 2.4.
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"Code" shall have the meaning set forth in the Recitals.
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"Confidentiality Agreement" shall have the meaning set forth in
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Section 6.3(ii).
"Continuing Virata Employees" shall have the meaning set forth in
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Section 6.8(d).
"Controlled Group Liability" means any and all liabilities (a) under
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Title IV of ERISA, other than for payment of premiums to the Pension Benefit
Guaranty Corporation, (b) under Section 302 of ERISA, (c) under Sections 412 and
4971 of the Code, (d) for violation of the continuation coverage requirements of
Section 601 et seq. of ERISA and Section 4980B of the Code or the group health
requirements of Sections 701 et seq. of ERISA, and (e) under corresponding or
similar provisions of foreign laws or regulations.
"DGCL" means the General Corporation Law of the State of Delaware.
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"DOJ" means the Antitrust Division of the U.S. Department of Justice.
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"Effective Time" shall have the meaning set forth in Section 2.2.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, and the rules and regulations promulgated thereunder.
"Excess Shares" shall have the meaning set forth in Section 3.7.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Exchange Agent" shall have the meaning set forth in Section 3.3.
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"Exchange Fund" shall have the meaning set forth in Section 3.3.
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"Exchange Ratio" shall have the meaning set forth in Section 3.1(b).
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"Expenses" means all out-of-pocket expenses (including all fees and
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expenses of counsel, accountants, investment bankers, experts and consultants to
a party hereto and its affiliates) incurred by a party hereto or on its behalf
in connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement and the transactions contemplated
hereby, including the preparation, printing, filing and mailing of the Joint
Proxy Statement/Prospectus and the Form S-4 and the solicitation of stockholder
approvals and all other matters related to the transactions contemplated hereby
and thereby.
"Form S-4" shall have the meaning set forth in Section 4.1(d)(ii).
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"FTC" means the U.S. Federal Trade Commission.
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"GAAP" means U.S. generally accepted accounting principles.
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"Governmental Entity" shall have the meaning set forth in Section
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4.1(d)(vi).
"Globespan" shall have the meaning set forth in the Preamble.
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"Globespan 2000 10-K" means Globespan's Annual Report on Form 10-K for
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the fiscal year ended December 31, 2000, as filed with the SEC.
"Globespan 10-Q" means Globespan's Quarterly Report on Form 10-Q for
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the quarter ended June 30, 2001, as filed with the SEC.
"Globespan Benefit Plan" means a Benefit Plan maintained or
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contributed to by Globespan or a Subsidiary of Globespan, or to which Globespan
or any Subsidiary of Globespan is required to contribute.
"Globespan Capital Stock" shall have the meaning set forth in Section
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4.2(b)(i).
"Globespan Common Stock" means common stock, par value $0.001 per
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share, of Globespan.
"Globespan Convertible Notes" means the 5 1/4% Convertible
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Subordinated Notes due 2006 issued pursuant to the Indenture dated as of May 11,
0000 xxxxxxx Xxxxxxxxx xxx Xxxxxx Xxxxxx Trust Company of New York as Trustee.
"Globespan Contract" shall have the meaning set forth in Section
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4.2(j).
"Globespan Disclosure Letter" shall have the meaning set forth in
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Section 4.2.
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"Globespan ESPP" means the Globespan Employee Stock Purchase Plan.
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"Globespan Intellectual Property" shall have the meaning set forth in
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Section 4.2(m)(i).
"Globespan Preferred Stock" shall have the meaning set forth in
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Section 4.2(b)(i).
"Globespan Recommendation" shall have the meaning set forth in Section
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6.1(c).
"Globespan SEC Documents" shall have the meaning set forth in Section
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4.2(e).
"Globespan Stock Option" shall have the meaning set forth in Section
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3.2(a).
"Globespan Stock Plans" shall have the meaning set forth in Section
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4.2(b)(i).
"Globespan Stockholder Approval" shall have the meaning set forth in
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Section 4.2(c)(i).
"Globespan Stockholders Meeting" shall have the meaning set forth in
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Section 4.2(c)(i).
"Globespan Termination Fee" means $30 million.
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"Globespan Warrant" shall mean the warrant to purchase 450,000 shares
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of Globespan Common Stock pursuant to that certain Series A Preferred Stock and
Warrant Purchase Agreement between Globespan and Intel Corporation, dated as of
May 6, 1999.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended, and the rules and regulations promulgated thereunder.
"Intellectual Property" means all trademarks, service marks, brand
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names, certification marks, trade dress and other indications of origin, the
goodwill associated with the foregoing and registrations in any jurisdiction of,
and applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents (including, without limitation,
divisions, continuations, continuations in part and renewal applications), and
any renewals, extensions or reissues thereof, in any jurisdiction; nonpublic
information, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any Person; writings and
other works, whether copyrightable or not, in any jurisdiction; and
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; and any similar
intellectual property or proprietary rights.
"Joint Proxy Statement/Prospectus" shall have the meaning set forth in
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Section 4.1(d)(ii).
"knowledge" means, with respect to any entity, the knowledge of such
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entity's executive officers after reasonable inquiry.
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"Liens" shall have the meaning set forth in Section 4.1(b)(ii).
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"Material Adverse Effect" means, with respect to any entity, a
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material adverse effect on (a) the business, operations, results of operations
or financial condition of such entity and its Subsidiaries taken as a whole or
(b) the ability of such entity to consummate the transactions contemplated by
this Agreement prior to the Termination Date, except, in each case, for any such
effect reasonably attributable to (i) general economic conditions in the United
States (including prevailing interest rate and stock market levels), (ii) the
general state of the semiconductor industry (other than any such effect which
affects such entity in a manner materially worse than the other party and its
Subsidiaries taken as a whole) or (iii) the negotiation, announcement,
execution, delivery or consummation of the transactions contemplated by, or in
compliance with, this Agreement; provided, that any change in the price of
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Virata Common Stock or Globespan Common Stock from the date hereof shall not be
deemed by itself, either alone or in combination with other effects, to
constitute a Material Adverse Effect.
"Merger" shall have the meaning set forth in the Recitals.
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"Merger Consideration" shall have the meaning set forth in Section
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3.1(b).
"Merger Sub" shall have the meaning set forth in the Preamble.
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"NASDAQ" means The NASDAQ Stock Market.
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"Necessary Consents" shall have the meaning set forth in Section
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4.1(d)(v).
"New Plans" shall have the meaning set forth in Section 6.8(b).
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"Non-Subsidiary Affiliate" shall have the meaning set forth in Section
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4.1(b)(ii).
"Old Plans" shall have the meaning set forth in Section 6.8(b)(i).
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"Other Approvals" shall have the meaning set forth in Section 7.1(c).
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"other party" means, with respect to Globespan, Virata, and with
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respect to Virata, Globespan.
"Person" means an individual, corporation, limited liability company,
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partnership, association, trust, unincorporated organization, other entity or
group (as defined in the Exchange Act).
"Qualifying Amendment" means an amendment or supplement to the Joint
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Proxy Statement/Prospectus or Form S-4 (including by incorporation by reference)
to the extent it contains (a) a Change in the Globespan Recommendation or a
Change in the Virata Recommendation (as the case may be), (b) a statement of the
reasons of the Board of Directors of Globespan or Virata (as the case may be)
for making such Change in the Globespan Recommendation or Change in the Virata
Recommendation (as the case may be) and (c) additional information reasonably
related to the foregoing.
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"Regulatory Law" means the HSR Act, and all other federal, state and
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foreign, if any, statutes, rules, regulations, orders, decrees, administrative
and judicial doctrines and other laws that are designed or intended to prohibit,
restrict or regulate (a) mergers, acquisitions or other business combinations,
(b) foreign investment, or (c) actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition.
"Required Approvals" shall have the meaning set forth in Section
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6.4(a)(i).
"SEC" means the U.S. Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended, and the
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rules and regulations promulgated thereunder.
"Significant Subsidiary" shall have the meaning ascribed to such term
----------------------
in Rule 1-02 of Regulation S-X of the SEC.
"Subsidiary" shall have the meaning ascribed to such term in Rule 1-02
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of Regulation S-X of the SEC.
"Superior Proposal" means, with respect to Globespan or Virata, as the
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case may be, a bona fide written proposal made by a Person other than a party
hereto that is (a) for an Acquisition Proposal (except that references in the
definition of "Acquisition Proposal" to "20%" shall be "50%") involving such
party and (b) on terms which its Board of Directors in good faith concludes
(following consultation with its financial advisors and outside counsel), taking
into account, among other things, all legal, financial, regulatory and other
aspects of the proposal and the Person making the proposal, (i) would, if
consummated, result in a transaction that is more favorable to its stockholders
(in their capacities as stockholders), from a financial point of view, than the
transactions contemplated by this Agreement and (ii) is reasonably capable of
being completed.
"Surviving Corporation" shall have the meaning set forth in Section
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2.1.
"Taxes" means any and all U.S. federal, state or local, foreign, or
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other taxes of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any taxing authority, including taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, ad valorem or value added.
"Tax Return" means any return, report or similar statement (including
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any attached Schedules) required to be filed with respect to any Tax, including
any information return, claim for refund, amended return or declaration of
estimated Tax.
"Termination Date" shall have the meaning set forth in Section 8.1(b).
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"Transition Committee" shall have the meaning set forth in Section
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6.2(d).
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"Transition Period" shall mean the period beginning at the Effective
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Time and ending on the date that is 12 months immediately following the
Effective Time.
"Virata" shall have the meaning set forth in the Preamble.
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"Virata 2001 10-K" means Virata's Annual Report on Form 10-K for the
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fiscal year ended April 1, 2001, as filed with the SEC.
"Virata 10-Q" means Virata's Quarterly Report on Form 10-Q for the
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quarter ended July 1, 2001, as filed with the SEC.
"Virata Benefit Plan" means a Benefit Plan maintained or contributed
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to by Virata or a Subsidiary of Virata, or to which Virata or any Subsidiary of
Virata is required to contribute.
"Virata Capital Stock" shall have the meaning set forth in Section
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4.1(b)(i).
"Virata Certificate" shall have the meaning set forth in Section
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3.1(b).
"Virata Common Stock" means common stock, par value $0.001 per share,
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of Virata, including the associated Virata Rights.
"Virata Contract" shall have the meaning set forth in Section
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4.1(j)(i).
"Virata Converted Option" shall have the meaning set forth in Section
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3.2(a).
"Virata Disclosure Letter" shall have the meaning set forth in Section
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4.1.
"Virata Employees" shall have the meaning set forth in Section 6.8(a).
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"Virata ESPP" means the Virata 1999 Employee Stock Purchase Plan.
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"Virata Intellectual Property" shall have the meaning set forth in
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Section 4.1(m).
"Virata Preferred Stock" shall have the meaning set forth in Section
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4.1(b)(i).
"Virata Recommendation" shall have the meaning set forth in Section
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6.1(b).
"Virata Reserved Shares" shall have the meaning set forth in Section
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6.8(c).
"Virata Restricted Shares" shall have the meaning set forth in Section
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3.2(a).
"Virata Rights" shall mean the preferred share purchase rights issued
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pursuant to the Virata Rights Agreement.
"Virata Rights Agreement" shall meant the Rights Agreement dated as of
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May 2, 2001 by and between Virata and American Stock Transfer & Trust Company,
as Rights Agent.
"Virata SEC Documents" shall have the meaning set forth in Section
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4.1(e).
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"Virata Stock Option" shall have the meaning set forth in Section
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3.2(a).
"Virata Stock Plans" shall have the meaning set forth in Section
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4.1(b)(i).
"Virata Stockholder Approval" shall have the meaning set forth in
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Section 4.1(c)(i).
"Virata Stockholders Meeting" shall have the meaning set forth in
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Section 4.1(c)(i).
"Virata Termination Fee" means $30 million.
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"Voting Debt" means any bonds, debentures, notes or other indebtedness
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having the right to vote on any matters on which holders of capital stock of the
same issuer may vote.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions hereof,
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at the Effective Time, Merger Sub shall be merged with and into Virata, with
Virata as the surviving corporation in the Merger (the "Surviving Corporation"),
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and the separate existence of Merger Sub shall thereupon cease. As a result of
the Merger, Virata will become a wholly owned subsidiary of Globespan.
2.2 Effective Time of the Merger. The Merger shall become effective
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as set forth in a properly executed certificate of merger duly filed with the
Secretary of State of the State of Delaware (the "Certificate of Merger"), which
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filing shall be made as soon as practicable after the closing of the
transactions contemplated by this Agreement (the "Closing"), in accordance with
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Section 2.4. As used in this Agreement, the term "Effective Time" shall mean the
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date and time when the Merger becomes effective, as set forth in the Certificate
of Merger.
2.3 Effects of the Merger. The Merger shall have the effects set
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forth in the applicable provisions of the DGCL. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time, except as
otherwise provided herein, all of the property, rights, privileges, powers and
franchises of Merger Sub and Virata shall vest in the Surviving Corporation, and
all debts, liabilities and duties of Merger Sub and Virata shall become the
debts, liabilities and duties of the Surviving Corporation.
2.4 Closing. Upon the terms and subject to the conditions hereof and
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the termination rights set forth in Article VIII, the Closing will take place at
the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000 at 10:00 A.M. on the first Business Day following the satisfaction or
waiver (subject to applicable law) of the conditions (excluding conditions that,
by their nature, cannot be satisfied until the Closing Date) set forth in
Article VII, unless this Agreement has been theretofore terminated pursuant to
its terms or unless another place, time or date is agreed to by the parties
hereto (the date of the Closing, the "Closing Date").
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2.5 Certificate of Incorporation. (a) At the Effective Time, the
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Certificate of Incorporation of Virata in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation, until duly amended in accordance with the terms thereof and of the
DGCL.
(b) Immediately following the Effective Time, Article 1 of the
Certificate of Incorporation of Globespan shall be amended in its entirety to
provide that "The name of the Corporation is Globespan Virata, Inc. (the
"Corporation")."
2.6 By-Laws. The By-Laws of Merger Sub as in effect immediately prior
-------
to the Effective Time shall be the By-Laws of the Surviving Corporation.
2.7 Directors and Officers. The directors of Merger Sub immediately
----------------------
prior to the Effective Time shall be the directors of the Surviving Corporation
and the individuals set forth on Schedule 2.7 shall be the officers of the
Surviving Corporation, holding the office(s) set forth opposite their names, in
each case, until their respective successors are duly elected and qualified.
ARTICLE III
CONVERSION OF SECURITIES
3.1 Exchange Ratio. At the Effective Time, by virtue of the Merger
--------------
and without any action on the part of any holder of any Virata Capital Stock:
(a) All shares of Virata Capital Stock that are held by Virata as
treasury stock or that are owned by Virata, Globespan or any of their
Subsidiaries (other than those held in a fiduciary capacity for the benefit of
third parties) immediately prior to the Effective Time shall cease to be
outstanding and shall be cancelled and retired and shall cease to exist.
(b) Subject to Sections 3.1(a) and 3.7, each outstanding share of
Virata Common Stock issued and outstanding immediately prior to the Effective
Time shall be converted into the right to receive 1.02 (the "Exchange Ratio")
--------------
fully paid and nonassessable shares of Globespan Common Stock (the "Merger
------
Consideration"). All of such shares of Globespan Common Stock shall be duly
-------------
authorized and validly issued and free of preemptive rights, with no personal
liability attaching to the ownership thereof. At the Effective Time, all shares
of Virata Common Stock shall cease to be outstanding and shall be canceled and
retired and shall cease to exist, and each holder of a certificate that
immediately prior to the Effective Time represented any such shares of Virata
Common Stock (a "Virata Certificate") shall thereafter cease to have any rights
------------------
with respect to such shares of Virata Common Stock, except the right to receive
the Merger Consideration to be issued in consideration therefor and any
dividends or other distributions to which holders of Virata Common Stock become
entitled all in accordance with this Article III upon the surrender of such
Virata Certificate.
(c) If, between the date of this Agreement and the Effective Time,
there is a reclassification, recapitalization, stock split, split-up, stock
dividend, combination or exchange of shares with respect to, or rights issued in
respect of, Virata Common Stock or Globespan Common Stock, the Exchange Ratio
shall be adjusted accordingly to provide to the holders of
-9-
Virata Common Stock the same economic effect as contemplated by this Agreement
prior to such event.
(d) Each issued and outstanding share of capital stock of Merger Sub
shall be converted into and become one fully paid and nonassessable share of
common stock, par value $0.001 per share, of the Surviving Corporation.
3.2 Stock Options, Warrants and Equity-Based Awards. (a) Each option
-----------------------------------------------
to purchase Virata Common Stock (a "Virata Stock Option") granted under Virata
-------------------
Stock Plans which is outstanding immediately prior to the Effective Time shall,
at the Effective Time, cease to represent a right to acquire shares of Virata
Common Stock and shall be converted (as so converted, a "Virata Converted
----------------
Option") into an option to purchase Globespan Common Stock (a "Globespan Stock
------ ---------------
Option"), on the same terms and conditions as were applicable under the Virata
------
Stock Option; provided that the number of shares of Globespan Common Stock
--------
subject to each such Virata Converted Option shall be equal to the number of
shares of Virata Common Stock subject to the Virata Stock Option immediately
prior to the Effective Time multiplied by the Exchange Ratio, rounded up, if
necessary, to the nearest whole share of Globespan Common Stock, and such Virata
Converted Option shall have an exercise price per share (rounded to the nearest
whole cent) equal to the per share exercise price specified in such Virata Stock
Option immediately prior to the Effective Time divided by the Exchange Ratio;
provided, however, that in the case of any Virata Stock Option to which Section
-------- -------
421 of the Code as of the Effective Time applies by reason of its qualification
under Section 422 of the Code, the exercise price, the number of shares subject
to such option and the terms and conditions of exercise of such option shall be
determined in a manner consistent with the requirements of Section 424(a) of the
Code. Similarly, each restricted share of Virata Common Stock ("Virata
------
Restricted Shares") outstanding immediately prior to the Effective Time shall be
-----------------
converted at the Effective Time into a number of restricted shares of Globespan
Common Stock multiplied by the Exchange Ratio, subject to the same terms and
conditions as applied to the Virata Restricted Shares.
(b) As soon as practicable after the Effective Time, Globespan shall
deliver to the holders of Virata Converted Options appropriate notices setting
forth such holders' rights pursuant to the respective Virata Stock Plans and
agreements evidencing the grants of such Virata Converted Options and stating
that such Virata Converted Options and agreements have been assumed by Globespan
and shall continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 3.2 after giving effect to the Merger and
the terms of the Virata Stock Plans).
(c) Prior to the Effective Time, Virata shall take all action
necessary in order to adjust the Virata Converted Options in accordance with the
terms of this Section 3.2. At or prior to the Effective Time, Globespan shall
reserve for issuance a number of shares of Globespan Common Stock at least equal
to the number of shares of Globespan Common Stock that will be subject to Virata
Converted Options, the Virata Reserved Shares and the Virata Restricted Shares.
Immediately following the Effective Time, Globespan shall file a registration
statement on Form S-8 (or any successor, or if Form S-8 is not available, other
appropriate, forms) with respect to the shares of Globespan Common Stock subject
to Virata Converted Options, the Virata Reserved Shares and the Virata
Restricted Shares and shall maintain the effectiveness of such registration
statement or registration statements (and maintain the current
-10-
status of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding.
3.3 Exchange Fund. Prior to the Effective Time, Globespan shall
-------------
appoint American Stock Transfer & Trust Co., or a commercial bank or trust
company, or a subsidiary thereof, reasonably acceptable to Virata, to act as
exchange agent hereunder for the purpose of exchanging Virata Certificates for
the Merger Consideration (the "Exchange Agent"). At or prior to the Effective
--------------
Time, Globespan shall deposit with the Exchange Agent, in trust for the benefit
of holders of shares of Virata Common Stock, certificates representing the
shares of Globespan Common Stock issuable pursuant to Section 3.1 in exchange
for outstanding shares of Virata Common Stock. Following the Effective Time,
Globespan agrees to make available to the Exchange Agent from time to time as
needed, cash sufficient to pay any amounts required under Section 3.5. Any cash
and certificates representing Globespan Common Stock deposited with the Exchange
Agent (including the proceeds from sales of Excess Shares in accordance with
Section 3.7) shall hereinafter be referred to as the "Exchange Fund."
-------------
3.4 Exchange Procedures. Promptly after the Effective Time, Globespan
-------------------
shall cause the Exchange Agent to mail to each holder of a Virata Certificate
(a) a letter of transmittal that shall specify that delivery shall be effected,
and risk of loss and title (if a change of title is requested by the holder of
the Virata Certificate on the transmittal letter) to the Virata Certificates
shall pass, only upon proper delivery of the Virata Certificates to the Exchange
Agent, and which letter shall be in customary form and have such other
provisions as Globespan or Virata may reasonably specify (such letter to be
reasonably acceptable to Virata and Globespan prior to the Effective Time) and
(b) instructions for effecting the surrender of such Virata Certificates in
exchange for the Merger Consideration, together with any dividends and other
distributions with respect thereto and any cash in lieu of fractional shares.
Upon surrender of a Virata Certificate to the Exchange Agent together with such
letter of transmittal, duly executed and completed in accordance with the
instructions thereto, and such other documents as may reasonably be required by
the Exchange Agent, the holder of such Virata Certificate shall be entitled to
receive in exchange therefor (a) shares of Globespan Common Stock representing,
in the aggregate, the whole number of shares that such holder has the right to
receive pursuant to Section 3.1 (after taking into account all shares of Virata
Common Stock then held by such holder) and (b) a check in the amount equal to
the cash that such holder has the right to receive pursuant to the provisions of
this Article III, including cash in lieu of any fractional shares of Globespan
Common Stock pursuant to Section 3.7 and dividends and other distributions
pursuant to Section 3.5. No interest will be paid or will accrue on any cash
payable pursuant to Section 3.5 or Section 3.7. In the event of a transfer of
ownership of Virata Common Stock that is not registered in the transfer records
of Virata, one or more shares of Globespan Common Stock evidencing, in the
aggregate, the proper number of shares of Globespan Common Stock, a check in the
proper amount of cash that such holder has the right to receive pursuant to the
provisions of this Article III, including cash in lieu of any fractional shares
of Globespan Common Stock pursuant to Section 3.7 and any dividends or other
distributions to which such holder is entitled pursuant to Section 3.5, shall be
issued with respect to such Virata Common Stock to such a transferee if the
Virata Certificate is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
-11-
3.5 Distributions with Respect to Unexchanged Shares. No dividends or
------------------------------------------------
other distributions with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Virata Certificate with respect to the shares of
Globespan Common Stock that such holder would be entitled to receive upon
surrender of such Virata Certificate, and no cash payment in lieu of fractional
shares of Globespan Common Stock shall be paid to any such holder pursuant to
Section 3.7 until such holder shall surrender such Virata Certificate in
accordance with Section 3.4. Subject to the effect of applicable law, following
surrender of any such Virata Certificate, there shall be paid to the record
holder thereof without interest, (a) promptly after the time of such surrender,
the amount of any cash payable in lieu of fractional shares of Globespan Common
Stock to which such holder is entitled pursuant to Section 3.7 and the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Globespan Common Stock and
(b) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time and a payment date
subsequent to such surrender payable with respect to such shares of Globespan
Common Stock.
3.6 No Further Ownership Rights in Virata Common Stock. All shares of
--------------------------------------------------
Globespan Common Stock issued and cash paid upon conversion of shares of Virata
Common Stock in accordance with the terms of this Article III (including any
cash paid pursuant to Section 3.5 or 3.7) shall be deemed to have been issued or
paid in full satisfaction of all rights pertaining to the shares of Virata
Common Stock.
3.7 No Fractional Shares of Globespan Common Stock. No certificates
----------------------------------------------
or scrip or shares of Globespan Common Stock representing fractional shares of
Globespan Common Stock or book-entry credit of the same shall be issued upon the
surrender for exchange of Virata Certificates, and such fractional share
interests will not entitle the owner thereof to vote or to have any rights of a
stockholder of Globespan or a holder of shares of Globespan Common Stock. In
lieu of any such fractional share, each holder of shares of Virata Common Stock
that would otherwise have been entitled to a fraction of a share of Globespan
Common Stock upon surrender of Virata Certificates (determined after taking into
account all Virata Certificates delivered by such holder) shall be paid, upon
such surrender, cash (without interest) in an amount equal to such holder's
proportionate interest in the net proceeds from the sale or sales in the open
market by the Exchange Agent, on behalf of all such holders, of the aggregate
fractional Globespan Common Stock issued pursuant to this Section 3.7. As soon
as practicable following the Effective Date, the Exchange Agent shall determine
the excess of (i) the number of full shares of Globespan Common Stock delivered
to the Exchange Agent by Globespan over (ii) the aggregate number of full shares
of Globespan Common Stock to be distributed to holders of Virata Common Stock
(such excess, the "Excess Shares"), and the Exchange Agent, as agent for the
-------------
former holders of Virata Common Stock, shall sell the Excess Shares at the
prevailing prices on NASDAQ. The sale of the Excess Shares by the Exchange Agent
shall be executed on NASDAQ and shall be executed in round lots to the extent
practicable. All commissions, transfer taxes and other out-of-pocket transaction
costs, including the expenses and compensation of the Exchange Agent, incurred
in connection with such sale of Excess Shares shall reduce, but not below zero,
the amount of cash paid to holders in respect of fractional shares. Until the
net proceeds of such sale have been distributed to the former holders of Virata
Common Stock, the Exchange Agent will hold such proceeds in trust for such
former holders. As soon as practicable after the determination of the amount of
cash to be paid to such former
-12-
holders of Virata Common Stock in lieu of any fractional interests, the Exchange
Agent shall make available in accordance with this Agreement such amounts to
such former holders of Virata Common Stock.
3.8 Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
that remains undistributed to the holders of Virata Certificates one year after
the Effective Time shall, at Globespan's request, be delivered to Globespan or
otherwise on the instruction of Globespan, and any holders of Virata
Certificates who have not theretofore complied with this Article III shall,
after such delivery, look only to Globespan for the Merger Consideration with
respect to the shares of Virata Common Stock formerly represented thereby to
which such holders are entitled pursuant to Sections 3.1 and 3.4, any cash in
lieu of fractional shares of Globespan Common Stock to which such holders are
entitled pursuant to Section 3.7 and any dividends or distributions with respect
to shares of Globespan Common Stock to which such holders are entitled pursuant
to Section 3.5. Any such portion of the Exchange Fund remaining unclaimed by
holders of shares of Virata Common Stock immediately prior to such time as such
amounts would otherwise escheat to or become property of any Governmental Entity
shall, to the extent permitted by law, become the property of Globespan free and
clear of any claims or interest of any Person previously entitled thereto.
3.9 No Liability. None of Globespan, Merger Sub, Virata or the
------------
Exchange Agent shall be liable to any Person in respect of any Merger
Consideration from the Exchange Fund delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
3.10 Investment of the Exchange Fund. The Exchange Agent shall invest
-------------------------------
any cash included in the Exchange Fund as directed by Globespan on a daily
basis; provided that no such investment or loss thereon shall affect the amounts
payable or the timing of the amounts payable to Virata stockholders pursuant to
the other provisions of this Article III. Any interest and other income
resulting from such investments shall promptly be paid to Globespan.
3.11 Lost Certificates. If any Virata Certificate shall have been
-----------------
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Virata Certificate to be lost, stolen or destroyed and, if
required by Globespan, the posting by such Person of a bond in such reasonable
amount as Globespan may direct as indemnity against any claim that may be made
against it with respect to such Virata Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed Virata Certificate the
Merger Consideration with respect to the shares of Virata Common Stock formerly
represented thereby, any cash in lieu of fractional shares of Globespan Common
Stock, and unpaid dividends and distributions on shares of Globespan Common
Stock deliverable in respect thereof, pursuant to this Agreement.
3.12 Withholding Rights. Globespan shall be entitled to deduct and
------------------
withhold from the consideration otherwise payable pursuant to this Agreement
such amounts as it is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of U.S. state or local or
foreign Tax law. To the extent that amounts are so withheld or paid over to or
deposited with the relevant Governmental Entity by Globespan, such
-13-
amounts shall be treated for all purposes of this Agreement as having been paid
to the Person in respect of which such deduction and withholding was made by
Globespan.
3.13 Further Assurances. At and after the Effective Time, the officers
------------------
and directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of the Surviving Corporation, Merger Sub or
Virata, any deeds, bills of sale, assignments or assurances and to take and do,
in the name and on behalf of the Surviving Corporation, Merger Sub or Virata,
any other actions and things necessary to vest, perfect or confirm of record or
otherwise in Globespan or the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.
3.14 Stock Transfer Books. The stock transfer books of Virata shall be
--------------------
closed immediately upon the Effective Time, and there shall be no further
registration of transfers of shares of Virata Common Stock thereafter on the
records of Virata. On or after the Effective Time, any Virata Certificates
presented to the Exchange Agent, Globespan or the Surviving Corporation for any
reason shall be converted into the right to receive the Merger Consideration
with respect to the shares of Virata Common Stock formerly represented thereby
(including any cash in lieu of fractional shares of Globespan Common Stock to
which the holders thereof are entitled pursuant to Section 3.7 and any dividends
or other distributions to which the holders thereof are entitled pursuant to
Section 3.5).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Virata. Except as disclosed in
----------------------------------------
the Virata disclosure letter delivered to Globespan concurrently herewith (the
"Virata Disclosure Letter") (each section of which qualifies only the
------------------------
correspondingly numbered representation and warranty or covenant of Virata),
Virata hereby represents and warrants to Globespan as follows:
(a) Corporate Organization. (i) Virata is a corporation duly
----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Virata has the corporate power and authority to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a Material Adverse
Effect on Virata. True and complete copies of the Certificate of Incorporation
and By-Laws of Virata, as in effect as of the date of this Agreement, have
previously been made available by Virata to Globespan.
(ii) Each Subsidiary of Virata (A) is duly organized and validly
existing under the laws of its jurisdiction of organization, (B) is duly
qualified to do business and in good standing in all jurisdictions (whether U.S.
federal, state or local or foreign) where its ownership or leasing of property
or the conduct of its business requires it to be so qualified and (C) has all
requisite corporate power and authority to own or lease its properties and
assets and to
-14-
carry on its business as now conducted, in each case, except as would not have a
Material Adverse Effect on Virata.
(b) Capitalization. (i) The authorized capital stock of Virata
--------------
consists of (A) 450,000,000 shares of Virata Common Stock, of which, as of
September 28, 2001, 63,871,593shares were issued and outstanding and 51,261
shares were held in treasury and (B) 5,000,000 shares of preferred stock, par
value $0.001 per share, of Virata ("Virata Preferred Stock," together with the
----------------------
Virata Common Stock, the "Virata Capital Stock"), of which no shares are issued
--------------------
and outstanding. From September 28, 2001 to the date of this Agreement, no
shares of Virata Capital Stock have been issued except pursuant to the exercise
of options granted under employee and director stock plans of Virata and its
Subsidiaries in effect as of the date hereof (the "Virata Stock Plans"). All of
------------------
the issued and outstanding shares of Virata Common Stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except pursuant to the terms of
options and stock issued pursuant to Virata Stock Plans, Virata ESPP and the
Virata Rights, Virata does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of Virata Capital
Stock or any other equity securities of Virata or any securities of Virata
representing the right to purchase or otherwise receive any shares of Virata
Capital Stock. As of September 28, 2001, no shares of Virata Capital Stock were
reserved for issuance, except for 19,278,820shares of Virata Common Stock
reserved for issuance upon the exercise of stock options pursuant to the Virata
Stock Plans, 1,464,740shares of Virata Common Stock reserved for issuance under
the Virata ESPP, and 500,000 shares of Series A Preferred Stock reserved for
issuance in connection with the Virata Rights Agreement. Virata has no Voting
Debt issued or outstanding. As of September 28, 2001, 13,798,529shares of Virata
Common Stock are subject to outstanding Virata Stock Options. Since September
28, 2001, except as permitted by this Agreement, (A) no Virata Common Stock has
been issued except in connection with the exercise of issued and outstanding
Virata Stock Options and (B) no options, warrants, securities convertible into,
or commitments with respect to the issuance of, shares of Virata Common Stock
have been issued, granted or made.
(ii) Virata owns, directly or indirectly, all of the issued and
outstanding shares of capital stock or other equity ownership interests of each
Subsidiary of Virata, free and clear of any liens, pledges, charges,
encumbrances and security interests whatsoever ("Liens"), and all of such shares
-----
or equity ownership interests are duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. No Subsidiary of Virata has or is
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of capital stock or any other equity security of such Subsidiary or any
securities representing the right to purchase or otherwise receive any shares of
capital stock or any other equity security of such Subsidiary. Section
4.1(b)(ii) of the Virata Disclosure Letter sets forth a list of each material
investment of Virata in the equity (or any security convertible or exchangeable
into equity) of any corporation, joint venture, partnership, limited liability
company or other entity other than its Subsidiaries, which would be considered a
Significant Subsidiary if such investment constituted control of such entity
(each a "Non-Subsidiary Affiliate").
------------------------
-15-
(c) Authority; No Violation. (i) Virata has full corporate power and
-----------------------
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of Virata. The Board of Directors of
Virata has directed that this Agreement be submitted to Virata stockholders for
approval at a meeting of Virata stockholders for the purpose of approving the
Merger and this Agreement (the "Virata Stockholders Meeting"), and, except for
---------------------------------
the approval of the Merger and of this Agreement by the affirmative vote of the
holders of a majority of the outstanding shares of Virata Common Stock (the
"Virata Stockholder Approval"), no other corporate proceedings on the part of
----------------------------
Virata are necessary to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Virata and (assuming due authorization, execution and
delivery by Globespan and Merger Sub) constitutes a valid and binding obligation
of Virata, enforceable against Virata in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights generally or to general
principles of equity.
(ii) Neither the execution and delivery of this Agreement by Virata,
nor the consummation by Virata of the transactions contemplated hereby, nor
compliance by Virata with any of the terms or provisions hereof, will (A)
violate any provision of the Certificate of Incorporation or By-Laws of Virata,
or (B) assuming that the consents and approvals referred to in Section 4.1(d)
are duly obtained, (I) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Virata, any of its
Subsidiaries or Non-Subsidiary Affiliates or any of their respective properties
or assets or (II) violate, conflict with, result in a breach of any provision of
or the loss of any benefit under, constitute a default (or an event that, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by, accelerate any right or benefit provided by, or
result in the creation of any Lien upon any of the respective properties or
assets of Virata, any of its Subsidiaries or its Non-Subsidiary Affiliates
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Virata, any of its Subsidiaries or Non-Subsidiary Affiliates
is a party, or by which they or any of their respective properties or assets may
be bound or affected, except (in the case of clause (B) above) for such
violations, conflicts, breaches or defaults that either individually or in the
aggregate will not have a Material Adverse Effect on Virata or the Surviving
Corporation.
(d) Consents and Approvals. Except for (i) the filing of a
----------------------
notification and report form under the HSR Act or any other Regulatory Law and
the termination or expiration of the waiting period under the HSR Act and any
such other Regulatory Law and any other applicable anti-trust or competition
approvals, (ii) the filing with the SEC of a joint proxy statement/prospectus
relating to the matters to be submitted to Globespan's stockholders at the
Globespan Stockholders Meeting and the matters to be submitted to Virata's
stockholders at the Virata Stockholders Meeting (such joint proxy
statement/prospectus, and any amendments or supplements thereto, the "Joint
-----
Proxy Statement/Prospectus") and a registration statement on Form S-4 with
--------------------------
respect to the issuance of Globespan Common Stock in the Merger (such Form S-4,
and any amendments or supplements thereto, the "Form S-4"), (iii) the filing of
--------
the Certificate of Merger, (iv) any consents, authorizations, approvals, filings
or exemptions in
-16-
connection with compliance with the rules of NASDAQ, (v) such filings and
approvals as are required to be made or obtained under the securities or "Blue
Sky" laws of various states in connection with the issuance of shares of
Globespan Common Stock pursuant to this Agreement (the consents, approvals,
filings and registration required under or in relation to clauses (ii) though
(v) above, "Necessary Consents"), and (vi) such other consents, approvals,
------------------
filings and registrations the failure of which to obtain or make would not
reasonably be expected to have a Material Adverse Effect on Virata, no consents
or approvals of or filings or registrations with any supranational or national,
state, municipal or local government, foreign or domestic, any instrumentality,
subdivision, court, administrative agency or commission or other authority
thereof, or any quasi-governmental or private body exercising any regulatory,
taxing, importing or other governmental or quasi-governmental authority (each, a
"Governmental Entity") are necessary in connection with (A) the execution and
-------------------
delivery by Virata of this Agreement and (B) the consummation by Virata of the
transactions contemplated by this Agreement.
(e) Financial Reports and SEC Documents. Each of Virata and its
-----------------------------------
Subsidiaries has filed all reports, prospectuses, forms, schedules, registration
statements, proxy statements or information statements required to be filed by
it since September 1, 1999 under the Securities Act or under Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act in the form filed with the SEC
(collectively, the "Virata SEC Documents"). Each of the Virata SEC Documents,
--------------------
including the Virata 2001 10-K and the Virata 10-Q, (i) complied in all material
respects as to form with the applicable requirements under the Securities Act or
the Exchange Act, as the case may be, and (ii) as of its filing date (except as
amended or supplemented prior to the date hereof), did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and each of the
balance sheets contained in or incorporated by reference into any such Virata
SEC Document (including the related notes and schedules thereto) fairly presents
the financial position of the entity or entities to which it relates as of its
date, and each of the statements of income and changes in stockholders' equity
and cash flows or equivalent statements in such Virata SEC Documents (including
any related notes and schedules thereto) fairly presents the results of
operations, changes in stockholders' equity and changes in cash flows, as the
case may be, of the entity or entities to which it relates for the periods to
which it relates, in each case in accordance with GAAP consistently applied
during the periods involved, except, in each case, as may be noted therein,
subject to normal year-end audit adjustments in the case of unaudited
statements.
(f) Absence of Undisclosed Liabilities . Except as disclosed in the
----------------------------------
audited financial statements (or notes thereto) included in the Virata 2001
10-K, or in the financial statements (or notes thereto) included in the Virata
10-Q, or in the Virata SEC Documents filed prior to the date hereof, neither
Virata nor any of its Subsidiaries had at July 1, 2001, or has incurred since
that date through the date hereof, any liabilities or obligations (whether
absolute, accrued, contingent or otherwise) of any nature, except (i)
liabilities, obligations or contingencies which (A) are accrued or reserved
against in the financial statements in the Virata 2001 10-K, or the Virata 10-Q
or reflected in the respective notes thereto or (B) were incurred after July 1,
2001 in the ordinary course of business and consistent with past practices, (ii)
liabilities, obligations or contingencies that (A) would not reasonably be
expected to have a Material Adverse Effect on Virata, or (B) have been
discharged or paid in full prior to the date hereof, and (iii) liabilities,
obligations and contingencies that are of a nature not required to be reflected
in the consolidated
-17-
financial statements of Virata and its Subsidiaries prepared in accordance with
GAAP consistently applied.
(g) Absence of Certain Changes or Events. (i) Since July 1, 2001, no
------------------------------------
event or events have occurred that have had or would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect on
Virata.
(ii) Since July 1, 2001, Virata and its Subsidiaries, taken
together as a whole, have carried on their respective businesses in all material
respects in the ordinary course consistent with past practice.
(iii) Since July 1, 2001, Virata has not declared any dividends on
Virata Common Stock.
(h) Legal Proceedings. There is no suit, action or proceeding or
-----------------
investigation pending or, to the knowledge of Virata, threatened, against or
affecting Virata or any of its Subsidiaries or, to the knowledge of Virata, any
basis for any such suit, action, proceeding or investigation that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Virata, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against Virata or its
Subsidiaries having, or that would reasonably be expected to have, any such
effect.
(i) Compliance with Applicable Law. Virata and each of its
------------------------------
Subsidiaries hold all licenses, franchises, permits and authorizations necessary
for the lawful conduct of their respective businesses under and pursuant to
each, and have complied in all respects with and are not in default in any
material respect under any, applicable law, statute, order, rule or regulation
of any Governmental Entity relating to Virata or any of its Subsidiaries, except
where the failure to hold such license, franchise, permit or authorization or
such noncompliance or default would not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Virata.
(j) Contracts. (i) Neither Virata nor any of its Subsidiaries is a
---------
party to or is bound by any contract, arrangement, commitment or understanding
(whether written or oral) (A) with respect to the employment of any directors,
officers or employees other than in the ordinary course of business consistent
with past practice, (B) which, upon the consummation or stockholder approval of
the transactions contemplated by this Agreement, will (either alone or upon the
occurrence of any additional acts or events) result in any payment (whether of
severance pay or otherwise) becoming due from Globespan, Virata, the Surviving
Corporation or any of their respective Subsidiaries to any officer or employee
thereof, (C) which is a "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) to be performed, entirely or in part,
after the date of this Agreement, or (D) which materially restricts the conduct
of any line of business by Virata or any Subsidiary thereof or, upon
consummation of the Merger, will materially restrict the ability of Globespan or
the Surviving Corporation or any Subsidiary thereof to engage in any line of
business. Each contract, arrangement, commitment or understanding of the type
described in this Section 4.1(j), whether or not set forth in the Virata
Disclosure Letter or in the Virata SEC Documents, is referred to herein as a
"Virata Contract" (for purposes of clarification, each "material contract" (as
---------------
such term is defined in Item
-18-
601(b)(10) of Regulation S-K of the SEC) to be performed, entirely or in part,
after the date of this Agreement, whether or not filed with the SEC, is a Virata
Contract).
(ii) (A) Each Virata Contract is valid and binding on Virata and
any of its Subsidiaries that is a party thereto, as applicable, and in full
force and effect, (B) Virata and each of its Subsidiaries has in all material
respects performed all obligations required to be performed by it to date under
each Virata Contract, except where such noncompliance, either individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect on Virata, and (C) neither Virata nor any of its Subsidiaries knows of,
or has received notice of, the existence of any event or condition which
constitutes, or, after notice or lapse of time or both, will constitute, a
material default on the part of Virata or any of its Subsidiaries under any such
Virata Contract, except where such default, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Virata.
(k) Environmental Liability. There are no legal, administrative,
-----------------------
arbitral or other proceedings, claims, actions, causes of action, private
environmental investigations or remediation activities or governmental
investigations of any nature seeking to impose, or that could reasonably result
in the imposition of, on Virata or any of its Subsidiaries, any liability or
obligation arising under common law or under any U.S. federal, state or local
environmental statute, regulation or ordinance, including CERCLA, pending or, to
the knowledge of Virata, threatened, against Virata or any of its Subsidiaries,
which liability or obligation, either individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Virata. To the
knowledge of Virata, there is no reasonable basis for any such proceeding,
claim, action or governmental investigation that would impose any liability or
obligation that, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect on Virata. Neither Virata nor any of its
Subsidiaries is subject to any agreement, order, judgment, decree, letter or
memorandum by or with any Governmental Entity or third party imposing any
liability or obligation with respect to the foregoing that, either individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on Virata.
(l) Employee Benefit Plans; Labor Matters. (i) There does not now
-------------------------------------
exist any, and to the knowledge of Virata, there are no existing circumstances
that could reasonably be expected to result in, any Controlled Group Liability
to Virata or any of its Subsidiaries that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on Virata. No
Virata Benefit Plan is a "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA.
(ii) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on Virata, (A) each of the
Virata Benefit Plans has been operated and administered in all material respects
in accordance with applicable law and administrative rules and regulations of
any Governmental Entity, including, but not limited to, ERISA and the Code, and
(B) there are no pending or threatened claims (other than claims for benefits in
the ordinary course), lawsuits or arbitrations that have been asserted or
instituted, and, to the knowledge of Virata, no set of circumstances exists,
that may reasonably give rise to a claim or lawsuit, against the Virata Benefit
Plans, any fiduciaries thereof with respect to their duties to the Virata
Benefit Plans or the assets of any of the trusts under any of the Virata Benefit
Plans that could reasonably be expected to result in any material liability of
Virata or any of its
-19-
Subsidiaries to the Pension Benefit Guaranty Corporation, the U.S. Department of
the Treasury, the U.S. Department of Labor, any Virata Benefit Plan, any
participant in a Virata Benefit Plan, or any other party.
(iii) Neither Virata nor any Subsidiary of Virata is a party to
any collective bargaining or other labor union contract applicable to
individuals employed by Virata or any Subsidiary of Virata, and no collective
bargaining agreement or other labor union contract is being negotiated by Virata
or any Subsidiary of Virata. Except as would not reasonably be expected to have
a Material Adverse Effect on Virata, (x) there is no labor dispute, strike,
slowdown or work stoppage against Virata or any Subsidiary of Virata pending or,
to the knowledge of Virata, threatened against Virata or any Subsidiary of
Virata and (y) no unfair labor practice or labor charge or complaint has
occurred with respect to Virata or any Subsidiary of Virata.
(iv) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby (either alone or in
conjunction with any other event) will (A) result in any payment or benefit
(including, without limitation, option acceleration, severance, unemployment
compensation, "excess parachute payment" (within the meaning of Section 280G of
the Code), forgiveness of indebtedness or otherwise) becoming due to any
director or any employee of Virata or any Subsidiaries of Virata under any
Virata Benefit Plan or otherwise; (B) increase any benefits otherwise payable
under any Virata Benefit Plan; (C) result in any acceleration of the time of
payment or vesting of any such benefits; (D) require the funding of any trust or
other funding vehicle; or (E) limit or prohibit the ability to amend, merge,
terminate or receive a reversion of assets from any Virata Benefit Plan or
related trust.
(v) There has been no disallowance of a deduction, or reasonable
expectation of a disallowance of a deduction, under Section 162(m) of the Code
for employee compensation of any amount paid or payable by Virata or any
Subsidiary of Virata that, either individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Virata.
(vi) Section 4.1(l)(vi) of the Virata Disclosure Letter sets
forth a list of each material Virata Benefit Plan.
(vii) Virata has heretofore made available to Globespan true and
complete copies of each of the Virata Benefit Plans and (i) the actuarial report
for such Virata Benefit Plan (if applicable) for each of the last two years,
(ii) the most recent determination letter from the Internal Revenue Service (if
applicable) for such Virata Benefit Plan, (iii) the summary plan description for
such Virata Benefit Plan (if any), and (iv) the Form 5500 for such Virata
Benefit Plan (if applicable) for each of the last two years.
(viii)Each Virata Benefit Plan that is intended to be qualified
under Section 401 of the Code has received a favorable determination letter from
the Internal Revenue Service as to the qualification of such plan, and such
letter has not been modified, revoked or limited by the failure to satisfy any
condition thereof or by a subsequent amendment thereto, or failure to amend such
Virata Benefit Plan.
-20-
(ix) Except as, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Virata, no
individual who has been classified by Virata as a non-employee (such as an
independent contractor, leased employee or consultant) shall have a claim
against Virata for eligibility to participate in any Virata Benefit Plan, if
such individual is later reclassified as a Virata employee.
(x) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Virata, all Virata
Benefit Plans subject to the laws of any jurisdiction outside of the United
States (i) have been maintained in accordance with all applicable requirements,
(ii) if they are intended to qualify for special tax treatment meet all
requirements for such treatment, and (iii) if they are intended to be funded
and/or book-reserved are fully funded and/or book reserved, as appropriate,
based upon reasonable actuarial assumptions.
(xi) Virata has taken all action necessary such that the Virata
Salary Continuation and Benefit Plan is not a benefit available to current
Virata employees and no current Virata employees are entitled to any payments or
other benefits under the Virata Salary Continuation and Benefit Plan.
(m) Intellectual Property. (i) Except as would not reasonably be
---------------------
expected to have a Material Adverse Effect on Virata, (A) Virata and its
Subsidiaries own, or are licensed to use, all Intellectual Property used in and
necessary for the conduct of their business as it is currently conducted
("Virata Intellectual Property"), (B) to the knowledge of Virata, the business
----------------------------
and operations of Virata and its Subsidiaries as they are currently conducted
does not infringe on or otherwise violate the rights of any third party, and, to
the extent Virata Intellectual Property is licensed, Virata's use of the
Intellectual Property is in accordance in all material respects with the
applicable license pursuant to which Virata acquired the right to use such
Intellectual Property, (C) to the knowledge of Virata, no third party is
challenging, infringing on or otherwise violating any right of Virata in the
Intellectual Property, (D) neither Virata nor any of its Subsidiaries has
received any written notice of any pending claim, order or proceeding with
respect to any Intellectual Property used in and necessary for the conduct of
Virata's and its Subsidiaries' business as it is currently conducted, nor has
Virata received any demand from any other party to cease and desist from
infringement of the other party's Intellectual Property, and (E) to the
knowledge of Virata, no Intellectual Property is being used or enforced by
Virata or its Subsidiaries in a manner that would reasonably be expected to
result in the abandonment, estoppel, cancellation or unenforceability of any
Intellectual Property used in and necessary for the conduct of Virata's and its
Subsidiaries' business as it is currently conducted.
(ii) The execution, delivery and performance of this Agreement by
Virata and the consummation by Virata of the transactions contemplated hereby
will not (A) constitute a breach by Virata or its Subsidiaries of any instrument
or agreement governing any Virata Intellectual Property, (B) pursuant to the
terms of any license or agreement relating to any Virata Intellectual Property,
cause the modification of any terms of any such license or agreement, including
but not limited to the modification of the effective rate of any royalties or
other payments provided for in any such license or agreement, (C) cause the
forfeiture or termination of any Virata Intellectual Property under the terms
thereof, (D) give rise to a right of forfeiture or termination of any Virata
Intellectual Property under the terms thereof or (E) impair the right of Virata,
its Subsidiaries, or
-21-
Globespan to make, have made, offer for sale, use, sell, export or license any
products or processes used by Virata and Subsidiaries in the conduct of their
business as it is currently configured, except in each case for those matters
that individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on Virata.
(n) State Takeover Laws; Rights Agreement. (i) The Board of Directors
-------------------------------------
of Virata has approved this Agreement and the transactions contemplated by this
Agreement as required under any applicable state takeover laws so that any such
state takeover laws will not apply to this Agreement or any of the transactions
contemplated hereby.
(ii) Virata has taken all action, if any, necessary or appropriate
so that the entering into of this Agreement, and the consummation of the
transactions contemplated hereby, do not and will not result in the ability of
any person to exercise any Virata Rights under the Virata Rights Agreement or
enable or require the Virata Rights to separate from the shares of Virata Common
Stock to which they are attached or to be triggered or become exercisable. No
"Distribution Date" or "15% Ownership Date" (as such terms are defined in the
Virata Rights Agreement) has occurred. Copies of the Virata Rights Agreement,
and all amendments thereto, have previously been made available to Globespan.
(o) Opinion of Financial Advisor. The Board of Directors of Virata has
----------------------------
received the opinion of Credit Suisse First Boston Corporation, dated the date
of this Agreement, to the effect that the Exchange Ratio is fair, from a
financial point of view, to the holders of Virata Common Stock.
(p) Board Approval. The Board of Directors of Virata, at a meeting
--------------
duly called and held, has, by unanimous vote of those present, (i) determined
that this Agreement and the transactions contemplated hereby are advisable, fair
to and in the best interests of the stockholders of Virata, (ii) approved and
adopted this Agreement and (iii) recommended that this Agreement and the
transactions contemplated hereby be adopted by the holders of Virata Common
Stock.
(q) Brokers' Fees. Neither Virata nor any of its Subsidiaries nor any
-------------
of their respective officers or directors has employed any broker or finder or
incurred any liability for any brokers' fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement, excluding fees
to be paid by Virata to Credit Suisse First Boston Corporation in accordance
with Virata's written agreement with such firm, a copy of which has been made
available to Globespan.
(r) Taxes. (i) Each of Virata and its Subsidiaries has duly and timely
-----
filed all Tax Returns required to be filed by it, and all such Tax Returns are
true, complete and accurate in all respects, except to the extent that any
failure to have filed or any inaccuracies in such Tax Returns would not
reasonably be expected to have a Material Adverse Effect on Virata. Virata and
each of its Subsidiaries has paid all Taxes required to be paid by it, and has
paid all Taxes that it was required to withhold from amounts owing to any
employee, creditor or third party, except to the extent that any failure to pay
such Taxes would not reasonably be expected to have a Material Adverse Effect on
Virata. There are no pending or, to the knowledge of Virata, threatened, audits,
examinations, investigations, deficiencies, claims or other proceedings in
-22-
respect of Taxes relating to Virata or any Subsidiary of Virata, except for
those that would not reasonably be expected to have a Material Adverse Effect on
Virata. There are no Liens for Taxes upon the assets of Virata or any Subsidiary
of Virata, other than Liens for current Taxes not yet due, Liens for Taxes that
are being contested in good faith by appropriate proceedings, and Liens for
Taxes that would not reasonably be expected to have a Material Adverse Effect on
Virata. Neither Virata nor any of its Subsidiaries has requested any extension
of time within which to file any Tax Returns in respect of any taxable year that
have not since been filed, nor made any request for waivers of the time to
assess any Taxes that are pending or outstanding, except where such request or
waiver would not reasonably be expected to have a Material Adverse Effect on
Virata. Neither Virata nor any of its U.S. Subsidiaries has been examined by the
Internal Revenue Service for any year. Neither Virata nor any of its
Subsidiaries has any liability for Taxes of any Person (other than Virata and
its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any comparable
provision of state, local or foreign law), except as would not reasonably be
expected to have a Material Adverse Effect on Virata. Neither Virata nor any
Subsidiary of Virata is a party to any agreement (with any Person other than
Virata and/or any of its Subsidiaries) relating to the allocation or sharing of
Taxes, except as would not reasonably be expected to have a Material Adverse
Effect on Virata.
(ii) Virata has not constituted either a "distributing
corporation" or a "controlled corporation" within the meaning of Section
355(a)(1)(A) of the Code in a distribution of stock intended to qualify for
tax-free treatment under Section 355 of the Code (A) in the two years prior to
the date of this Agreement (or will constitute such a corporation in the two
years prior to the Closing Date) or (B) in a distribution which otherwise
constitutes part of a "plan" or "series of related transactions" within the
meaning of Section 355(e) of the Code in conjunction with the Merger.
(s) Reorganization under the Code. As of the date of this Agreement,
-----------------------------
neither Virata nor any of its Subsidiaries has taken any action or knows of any
fact that is reasonably likely to prevent the Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code.
(t) Form S-4; Joint Proxy Statement/Prospectus. None of the
------------------------------------------
information to be supplied by Virata or its Subsidiaries in the Form S-4 or the
Joint Proxy Statement/Prospectus will, at the time of the mailing of the Joint
Proxy Statement/Prospectus and any amendments or supplements thereto, and at the
time of each of the Globespan Stockholders Meeting and the Virata Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are made,
not misleading. The Joint Proxy Statement/Prospectus will comply, as of its
mailing date, as to form in all material respects with all applicable law,
including the provisions of the Exchange Act, except that no representation is
made by Virata with respect to information supplied by Globespan or Merger Sub
for inclusion therein.
(u) Ownership of Globespan Stock. As of the date of this Agreement,
----------------------------
neither Virata nor any of its Subsidiaries own any shares of Globespan Capital
Stock (other than those shares held in a fiduciary capacity for the benefit of
third parties).
-23-
4.2 Representations and Warranties of Globespan. Except as disclosed
-------------------------------------------
in the Globespan disclosure letter delivered to Virata concurrently herewith
(the "Globespan Disclosure Letter") (each section of which qualifies only the
---------------------------
correspondingly numbered representation and warranty or covenant of Globespan),
each of Globespan and Merger Sub hereby represents and warrants to Virata as
follows:
(a) Corporate Organization. (i) Globespan is a corporation duly
----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Globespan has the corporate power and authority to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not, either individually or in the aggregate, have a Material Adverse
Effect on Globespan. True and complete copies of the Certificate of
Incorporation and By-Laws of Globespan, as in effect as of the date of this
Agreement, have previously been made available by Globespan to Virata.
(ii) Each Subsidiary of Globespan (A) is duly organized and
validly existing under the laws of its jurisdiction of organization, (B) is duly
qualified to do business and in good standing in all jurisdictions (whether U.S.
federal, state or local or foreign) where its ownership or leasing of property
or the conduct of its business requires it to be so qualified and (C) has all
requisite corporate power and authority to own or lease its properties and
assets and to carry on its business as now conducted, in each case, except as
would not have a Material Adverse Effect on Globespan.
(iii) Merger Sub was formed by Globespan solely for the purpose of
engaging in the transactions contemplated hereby and has engaged in no business
and has incurred no liabilities other than in connection with the transactions
contemplated by this Agreement.
(b) Capitalization. (i) The authorized capital stock of Globespan
--------------
consists of (A) 400,000,000 shares of Globespan Common Stock, of which, as of
September 28, 2001, 74,281,530 shares were issued and outstanding and no shares
were held in treasury and (B) 10,000,000 shares of preferred stock, par value
$0.001 per share, of Globespan (the "Globespan Preferred Stock," together with
-------------------------
the Globespan Common Stock, the "Globespan Capital Stock"), of which no shares
-----------------------
are issued and outstanding. From September 28, 2001 to the date of this
Agreement, no shares of Globespan Capital Stock have been issued except pursuant
to the exercise of options granted under employee and director stock plans of
Globespan and its Subsidiaries in effect as of the date hereof (the "Globespan
---------
Stock Plans"). All of the issued and outstanding shares of Globespan Common
-----------
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. As of the date of this Agreement, except
pursuant to the terms of the Globespan Convertible Notes, the Globespan Warrant,
the options and stock issued pursuant to Globespan Stock Plans, Globespan does
not have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of Globespan Capital Stock or any other equity securities
of Globespan or any securities of Globespan representing the right to purchase
or
-24-
otherwise receive any shares of Globespan Capital Stock. As of September 28,
2001, no shares of Globespan Capital Stock were reserved for issuance, except
for 27,585,611 shares of Globespan Common Stock reserved for issuance upon the
exercise of stock options pursuant to the Globespan Stock Plans, 450,000 shares
of Globespan Common Stock reserved for issuance upon the exercise of the
Globespan Warrant, and 3,600,000 shares of Globespan Common Stock reserved for
issuance under the Globespan ESPP, and 4,874,391 shares of Globespan Common
Stock reserved for issuance upon conversion of the Globespan Convertible Notes.
Globespan has no Voting Debt issued or outstanding. As of September 28, 2001,
22,064,885 shares of Globespan Common Stock are subject to outstanding Globespan
Stock Options. Since September 28, 2001, except as permitted by this Agreement,
(A) no Globespan Common Stock has been issued except in connection with the
exercise of issued and outstanding Globespan Stock Options or conversion of the
Globespan Convertible Notes and (B) no options, warrants, securities convertible
into, or commitments with respect to the issuance of, shares of Globespan Common
Stock have been issued, granted or made.
(ii) The authorized capital stock of Merger Sub consists of 800
shares of common stock, par value $0.001 per share, 100 of which are validly
issued, fully paid and nonassessable, and are owned by Globespan free and clear
of any Liens, and 200 shares of preferred stock, par value $0.001 per share, of
which no shares are issued and outstanding. No other shares of the capital stock
of Merger Sub are, or have ever been, issued.
(iii) Globespan owns, directly or indirectly, all of the issued
and outstanding shares of capital stock or other equity ownership interests of
each Subsidiary of Globespan, free and clear of any Liens, and all of such
shares or equity ownership interests are duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. No Subsidiary of Globespan has or
is bound by any outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or issuance of any
shares of capital stock or any other equity security of such Subsidiary or any
securities representing the right to purchase or otherwise receive any shares of
capital stock or any other equity security of such Subsidiary. Section
4.2(b)(iii) of the Globespan Disclosure Letter sets forth a list of each
material investment of Globespan in the equity (or any security convertible or
exchangeable into equity) of any Non-Subsidiary Affiliate.
(c) Authority; No Violation. (i) Each of Globespan and Merger Sub has
-----------------------
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of each of Globespan
and Merger Sub. Globespan, as sole stockholder of Merger Sub, has approved this
Agreement and the transactions contemplated hereby. The Board of Directors of
Globespan has directed that the issuance of Globespan Common Stock pursuant to
this Agreement be submitted to Globespan stockholders for approval at a meeting
of Globespan stockholders (the "Globespan Stockholders Meeting"), and, except
------------------------------
for the approval of the issuance of Globespan Common Stock in the Merger by
majority vote at a meeting of Globespan's stockholders at which a quorum is
present (the "Globespan Stockholder Approval"), no other corporate proceedings
------------------------------
on the part of Globespan or Merger Sub are necessary to approve this Agreement
and to consummate the transactions contemplated hereby. This Agreement has
-25-
been duly and validly executed and delivered by each of Globespan and Merger Sub
and (assuming due authorization, execution and delivery by Virata) constitutes a
valid and binding obligation of Globespan and Merger Sub, enforceable against
Globespan and Merger Sub in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity.
(ii) Neither the execution and delivery of this Agreement by
Globespan and Merger Sub, nor the consummation by Globespan and Merger Sub of
the transactions contemplated hereby, nor compliance by Globespan and Merger Sub
with any of the terms or provisions hereof, will (A) violate any provision of
the Certificate of Incorporation or By-Laws of Globespan or the Certificate of
Incorporation or By-Laws of Merger Sub or (B) assuming that the consents and
approvals referred to in Section 4.2(d) are duly obtained, (I) violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Globespan or Merger Sub, any of their Subsidiaries or
Non-Subsidiary Affiliates or any of their respective properties or assets or
(II) violate, conflict with, result in a breach of any provision of or the loss
of any benefit under, constitute a default (or an event that, with notice or
lapse of time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under, accelerate the
performance required by, accelerate any right or benefit provided by, or result
in the creation of any Lien upon any of the respective properties or assets of
Globespan or Merger Sub, any of their Subsidiaries or Non-Subsidiary Affiliates
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Globespan or Merger Sub, any of their Subsidiaries or their
Non-Subsidiary Affiliates is a party, or by which they or any of their
respective properties or assets may be bound or affected, except (in the case of
clause (B) above) for such violations, conflicts, breaches or defaults that,
either individually or in the aggregate, will not have a Material Adverse Effect
on Globespan or the Surviving Corporation.
(d) Consents and Approvals. Except for (i) the filing of a
----------------------
notification and report form under the HSR Act or any other Regulatory Law and
the termination or expiration of the waiting period under the HSR Act and any
such other Regulatory Law and any other applicable anti-trust or competition
approvals, (ii) the filing with the SEC of the Joint Proxy Statement/Prospectus
and the Form S-4, (iii) the filing of the Certificate of Merger, (iv) any
consents, authorizations, approvals, filings or exemptions in connection with
compliance with the rules of NASDAQ, (v) such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of Globespan Common
Stock pursuant to this Agreement and (vi) such other consents, approvals,
filings and registrations the failure of which to obtain or make would not
reasonably be expected to have a Material Adverse Effect on Globespan, no
consents or approvals of or filings or registrations with any Governmental
Entity are necessary in connection with (A) the execution and delivery by each
of Globespan and Merger Sub of this Agreement and (B) the consummation by each
of Globespan and Merger Sub of the transactions contemplated by this Agreement.
(e) Financial Reports and SEC Documents. Each of Globespan and its
-----------------------------------
Subsidiaries has filed all reports, prospectuses, forms, schedules, registration
statements, proxy statements or information statements required to be filed by
it since September 1, 1999 under the
-26-
Securities Act or under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
in the form filed with the SEC (collectively, the "Globespan SEC Documents").
-----------------------
Each of the Globespan SEC Documents, including the Globespan 2000 10-K and the
Globespan 10-Q, (i) complied in all material respects as to form with the
applicable requirements under the Securities Act or the Exchange Act, as the
case may be, and (ii) as of its filing date (except as amended or supplemented
prior to the date hereof), did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; and each of the balance sheets contained in or
incorporated by reference into any such Globespan SEC Document (including the
related notes and schedules thereto) fairly presents the financial position of
the entity or entities to which it relates as of its date, and each of the
statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such Globespan SEC Documents (including any related
notes and schedules thereto) fairly presents the results of operations, changes
in stockholders' equity and changes in cash flows, as the case may be, of the
entity or entities to which it relates for the periods to which it relates, in
each case in accordance with GAAP consistently applied during the periods
involved, except, in each case, as may be noted therein, subject to normal
year-end audit adjustments in the case of unaudited statements.
(f) Absence of Undisclosed Liabilities. Except as disclosed in the
----------------------------------
audited financial statements (or notes thereto) included in the Globespan 2000
10-K, or in the financial statements (or notes thereto) included in the
Globespan 10-Q or in the Globespan SEC Documents filed prior to the date hereof,
neither Globespan nor any of its Subsidiaries had at June 30, 2001, or has
incurred since that date through the date hereof, any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of any nature, except (i)
liabilities, obligations or contingencies which (A) are accrued or reserved
against in the financial statements in the Globespan 2000 10-K or in the
Globespan 10-Q or reflected in the respective notes thereto or (B) were incurred
after June 30, 2001 in the ordinary course of business and consistent with past
practices, (ii) liabilities, obligations or contingencies that (A) would not
reasonably be expected to have a Material Adverse Effect on Globespan, or (B)
have been discharged or paid in full prior to the date hereof, and (iii)
liabilities, obligations and contingencies that are of a nature not required to
be reflected in the consolidated financial statements of Globespan and its
Subsidiaries prepared in accordance with GAAP consistently applied.
(g) Absence of Certain Changes or Events. (i) Since June 30, 2001, no
------------------------------------
event or events have occurred that have had or would reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect on
Globespan.
(ii) Since June 30, 2001, Globespan and its Subsidiaries,
taken together as a whole, have carried on their respective businesses in all
material respects in the ordinary course consistent with past practice.
(iii) Since June 30, 2001, Globespan has not declared any
dividends on Globespan Common Stock.
-27-
(h) Legal Proceedings. There is no suit, action or proceeding or
-----------------
investigation pending or, to the knowledge of Globespan, threatened, against or
affecting Globespan or any of its Subsidiaries or, to the knowledge of
Globespan, any basis for any such suit, action, proceeding or investigation that
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Globespan, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against Globespan or its Subsidiaries having, or that would reasonably be
expected to have, any such effect.
(i) Compliance with Applicable Law. Globespan and each of its
------------------------------
Subsidiaries hold all licenses, franchises, permits and authorizations necessary
for the lawful conduct of their respective businesses under and pursuant to
each, and have complied in all respects with and are not in default in any
material respect under any, applicable law, statute, order, rule or regulation
of any Governmental Entity relating to Globespan or any of its Subsidiaries,
except where the failure to hold such license, franchise, permit or
authorization or such noncompliance or default would not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
Globespan.
(j) Contracts. (i) Neither Globespan nor any of its Subsidiaries is a
---------
party to or is bound by any contract, arrangement, commitment or understanding
(whether written or oral) (A) with respect to the employment of any directors,
officers or employees other than in the ordinary course of business consistent
with past practice, (B) which, upon the consummation or stockholder approval of
the transactions contemplated by this Agreement, will (either alone or upon the
occurrence of any additional acts or events) result in any payment (whether of
severance pay or otherwise) becoming due from Globespan, Virata, the Surviving
Corporation or any of their respective Subsidiaries to any officer or employee
thereof, (C) which is a "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) to be performed, entirely or in part,
after the date of this Agreement, or (D) which materially restricts the conduct
of any line of business by Globespan or any Subsidiary thereof or upon
consummation of the Merger will materially restrict the ability of Globespan or
the Surviving Corporation or any Subsidiary thereof to engage in any line of
business. Each contract, arrangement, commitment or understanding of the type
described in this Section 4.2(j), whether or not set forth in the Globespan
Disclosure Letter or in the Globespan SEC Documents, is referred to herein as a
"Globespan Contract" (for purposes of clarification, each "material contract"
------------------
(as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to be
performed, entirely or in part, after the date of this Agreement, whether or not
filed with the SEC, is a Globespan Contract).
(ii) (A) Each Globespan Contract is valid and binding on Globespan
and any of its Subsidiaries that is a party thereto, as applicable, and in full
force and effect, (B) Globespan and each of its Subsidiaries has in all material
respects performed all obligations required to be performed by it to date under
each Globespan Contract, except where such noncompliance, either individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on Globespan, and (C) neither Globespan nor any of its Subsidiaries knows
of, or has received notice of, the existence of any event or condition which
constitutes, or, after notice or lapse of time or both, will constitute, a
material default on the part of Globespan or any of its Subsidiaries under any
such Globespan Contract, except where such default, either
-28-
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Globespan.
(k) Environmental Liability. There are no legal, administrative,
-----------------------
arbitral or other proceedings, claims, actions, causes of action, private
environmental investigations or remediation activities or governmental
investigations of any nature seeking to impose, or that could reasonably result
in the imposition of, on Globespan or any of its Subsidiaries, any liability or
obligation arising under common law or under any U.S. federal, state or local
environmental statute, regulation or ordinance, including CERCLA, pending or
threatened against Globespan or any of its Subsidiaries, which liability or
obligation, either individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Globespan. To the knowledge of
Globespan, there is no reasonable basis for any such proceeding, claim, action
or governmental investigation that would impose any liability or obligation
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Globespan. Neither Globespan nor any of its
Subsidiaries is subject to any agreement, order, judgment, decree, letter or
memorandum by or with any Governmental Entity or third party imposing any
liability or obligation with respect to the foregoing that, either individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on Globespan.
(l) Employee Benefit Plans; Labor Matters. (i) There does not now
-------------------------------------
exist any and, to the knowledge of Globespan, there are no existing
circumstances that could reasonably be expected to result in, any Controlled
Group Liability to Globespan or any of its Subsidiaries that, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect on
Globespan. No Globespan Benefit Plan is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
(ii) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on Globespan, (A) each of
the Globespan Benefit Plans has been operated and administered in all material
respects in accordance with applicable law and administrative rules and
regulations of any Governmental Entity, including, but not limited to, ERISA and
the Code, and (B) there are no pending or threatened claims (other than claims
for benefits in the ordinary course), lawsuits or arbitrations that have been
asserted or instituted, and, to the knowledge of Globespan, no set of
circumstances exists, that may reasonably give rise to a claim or lawsuit,
against the Globespan Benefit Plans, any fiduciaries thereof with respect to
their duties to the Globespan Benefit Plans or the assets of any of the trusts
under any of the Globespan Benefit Plans that could reasonably be expected to
result in any material liability of Globespan or any of its Subsidiaries to the
Pension Benefit Guaranty Corporation, the U.S. Department of the Treasury, the
U.S. Department of Labor, any Globespan Benefit Plan, any participant in a
Globespan Benefit Plan, or any other party.
(iii) Neither Globespan nor any Subsidiary of Globespan is a party
to any collective bargaining or other labor union contract applicable to
individuals employed by Globespan or any Subsidiary of Globespan, and no
collective bargaining agreement or other labor union contract is being
negotiated by Globespan or any Subsidiary of Globespan. Except as would not
reasonably be expected to have a Material Adverse Effect on Globespan, there is
(x) no labor dispute, strike, slowdown or work stoppage against Globespan or any
Subsidiary of Globespan pending or, to the knowledge of Globespan, threatened
against Globespan or any
-29-
Subsidiary of Globespan and (y) no unfair labor practice or labor charge or
complaint has occurred with respect to Globespan or any Subsidiary of Globespan.
(iv) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby (either alone or in
conjunction with any other event) will (A) result in any payment or benefit
(including, without limitation, option acceleration, severance, unemployment
compensation, "excess parachute payment" (within the meaning of Section 280G of
the Code), forgiveness of indebtedness or otherwise) becoming due to any
director or any employee of Globespan or any Subsidiaries of Globespan under any
Globespan Benefit Plan or otherwise; (B) increase any benefits otherwise payable
under any Globespan Benefit Plan; (C) result in any acceleration of the time of
payment or vesting of any such benefits; (D) require the funding of any trust or
other funding vehicle; or (E) limit or prohibit the ability to amend, merge,
terminate or receive a reversion of assets from any Globespan Benefit Plan or
related trust.
(v) There has been no disallowance of a deduction, or
reasonable expectation of a disallowance of a deduction, under Section 162(m) of
the Code for employee compensation of any amount paid or payable by Globespan or
any Subsidiary of Globespan that, either individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Globespan.
(vi) Section 4.2(l)(vi) of the Globespan Disclosure Letter
sets forth a list of each material Globespan Benefit Plan.
(vii) Globespan has heretofore made available to Virata true
and complete copies of each of the Globespan Benefit Plans and (i) the actuarial
report for such Globespan Benefit Plan (if applicable) for each of the last two
years, (ii) the most recent determination letter from the Internal Revenue
Service (if applicable) for such Globespan Benefit Plan, (iii) the summary plan
description for such Globespan Benefit Plan (if any), and (iv) the Form 5500 for
such Globespan Benefit Plan (if applicable) for each of the last two years.
(viii) Each Globespan Benefit Plan that is intended to be
qualified under Section 401 of the Code has received a favorable determination
letter from the Internal Revenue Service as to the qualification of such plan,
and such letter has not been modified, revoked or limited by the failure to
satisfy any condition thereof or by a subsequent amendment thereto, or failure
to amend such Globespan Benefit Plan.
(ix) Except as, either individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on Globespan, no
individual who has been classified by Globespan as a non-employee (such as an
independent contractor, leased employee or consultant) shall have a claim
against Globespan for eligibility to participate in any Globespan Benefit Plan,
if such individual is later reclassified as a Globespan employee.
(x) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Globespan, all
Globespan Benefit Plans subject to the laws of any jurisdiction outside of the
United States (i) have been maintained in accordance with all applicable
requirements, (ii) if they are intended to qualify for special tax
-30-
treatment meet all requirements for such treatment, and (iii) if they are
intended to be funded and/or book-reserved are fully funded and/or book
reserved, as appropriate, based upon reasonable actuarial assumptions
(m) Intellectual Property. (i) Except as would not reasonably be
---------------------
expected to have a Material Adverse Effect on Globespan, (A) Globespan and its
Subsidiaries own, or are licensed to use, all Intellectual Property used in and
necessary for the conduct of their business as it is currently conducted
("Globespan Intellectual Property"), (B) to the knowledge of Globespan, the
-------------------------------
business and operations of Globespan and its Subsidiaries as they are currently
conducted does not infringe on or otherwise violate the rights of any third
party, and, to the extent Globespan Intellectual Property is licensed,
Globespan's use of the Intellectual Property is in accordance in all material
respects with the applicable license pursuant to which Globespan acquired the
right to use such Intellectual Property, (C) to the knowledge of Globespan, no
third party is challenging, infringing on or otherwise violating any right of
Globespan in the Intellectual Property, (D) neither Globespan nor any of its
Subsidiaries has received any written notice of any pending claim, order or
proceeding with respect to any Intellectual Property used in and necessary for
the conduct of Globespan's and its Subsidiaries' business as it is currently
conducted, nor has Globespan received any demand from any other party to cease
and desist from infringement of the other party's Intellectual Property, and (E)
to the knowledge of Globespan, no Intellectual Property is being used or
enforced by Globespan or its Subsidiaries in a manner that would reasonably be
expected to result in the abandonment, estoppel, cancellation or
unenforceability of any Intellectual Property used in and necessary for the
conduct of Globespan's and its Subsidiaries' business as it is currently
conducted.
(ii) The execution, delivery and performance of this Agreement
by Globespan and the consummation by Globespan of the transactions contemplated
hereby will not (A) constitute a breach by Globespan or its Subsidiaries of any
instrument or agreement governing any Globespan Intellectual Property, (B)
pursuant to the terms of any license or agreement relating to any Globespan
Intellectual Property, cause the modification of any terms of any such license
or agreement, including but not limited to the modification of the effective
rate of any royalties or other payments provided for in any such license or
agreement, (C) cause the forfeiture or termination of any Globespan Intellectual
Property under the terms thereof, (D) give rise to a right of forfeiture or
termination of any Globespan Intellectual Property under the terms thereof or
(E) impair the right of Globespan, its Subsidiaries, or Virata to make, have
made, offer for sale, use, sell, export or license any products or processes
used by Globespan and Subsidiaries in the conduct of their business as it is
currently configured, except in each case for those matters that individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect on Globespan.
(n) State Takeover Laws. The Board of Directors of Globespan has
-------------------
approved this Agreement and the transactions contemplated by this Agreement as
required under any applicable state takeover laws so that any such state
takeover laws will not apply to this Agreement or any of the transactions
contemplated hereby.
(o) Opinion of Financial Advisor. Globespan has received the opinion
----------------------------
of Xxxxxx Xxxxxxx & Co. Incorporated, dated the date the Board of Directors of
Globespan
-31-
approved this Agreement and the transactions contemplated thereby, to the effect
that the Exchange Ratio is fair to the stockholders of Globespan from a
financial point of view.
(p) Board Approval. The Board of Directors of Globespan, at a meeting
--------------
duly called and held, has, by unanimous vote of those present, (i) determined
that this Agreement and the transactions contemplated hereby are advisable, fair
to and in the best interests of the stockholders of Globespan, (ii) approved and
adopted this Agreement and (iii) recommended that the issuance of Globespan
Common Stock pursuant to this Agreement be approved by the holders of Globespan
Common Stock.
(q) Brokers' Fees. Neither Globespan, Merger Sub nor any of their
-------------
Subsidiaries nor any of their respective officers or directors has employed any
broker or finder or incurred any liability for any brokers' fees, commissions or
finders' fees in connection with the transactions contemplated by this
Agreement, excluding fees to be paid by Globespan to Xxxxxx Xxxxxxx & Co.
Incorporated in accordance with Globespan's written agreement with such firm, a
copy of which has been made available to Virata.
(r) Taxes. (i) Each of Globespan and its Subsidiaries has duly and
-----
timely filed all Tax Returns required to be filed by it, and all such Tax
Returns are true, complete and accurate in all respects, except to the extent
that any failure to have filed or any inaccuracies in such Tax Returns would not
reasonably be expected to have a Material Adverse Effect on Globespan. Globespan
and each of its Subsidiaries has paid all Taxes required to be paid by it, and
has paid all Taxes that it was required to withhold from amounts owing to any
employee, creditor or third party, except to the extent that any failure to pay
such Taxes would not reasonably be expected to have a Material Adverse Effect on
Globespan. There are no pending or, to the knowledge of Globespan, threatened,
audits, examinations, investigations, deficiencies, claims or other proceedings
in respect of Taxes relating to Globespan or any Subsidiary of Globespan, except
for those that would not reasonably be expected to have a Material Adverse
Effect on Globespan. There are no Liens for Taxes upon the assets of Globespan
or any Subsidiary of Globespan, other than Liens for current Taxes not yet due,
Liens for Taxes that are being contested in good faith by appropriate
proceedings, and Liens for Taxes that would not reasonably be expected to have a
Material Adverse Effect on Globespan. Neither Globespan nor any of its
Subsidiaries has requested any extension of time within which to file any Tax
Returns in respect of any taxable year that have not since been filed, nor made
any request for waivers of the time to assess any Taxes that are pending or
outstanding, except where such request or waiver would not reasonably be
expected to have a Material Adverse Effect on Globespan. Neither Globespan nor
any of its U.S. Subsidiaries has been examined by the Internal Revenue Service
for any year. Neither Globespan nor any of its Subsidiaries has any liability
for Taxes of any Person (other than Globespan and its Subsidiaries) under
Treasury Regulation Section 1.1502-6 (or any comparable provision of state,
local or foreign law), except as would not reasonably be expected to have a
Material Adverse Effect on Globespan. Neither Globespan nor any Subsidiary of
Globespan is a party to any agreement (with any Person other than Globespan
and/or any of its Subsidiaries) relating to the allocation or sharing of Taxes,
except as would not reasonably be expected to have a Material Adverse Effect on
Globespan.
(ii) Globespan has not constituted either a "distributing
corporation" or a "controlled corporation" within the meaning of Section
355(a)(1)(A) of the Code in a
-32-
distribution of stock intended to qualify for tax-free treatment under Section
355 of the Code (A) in the two years prior to the date of this Agreement (or
will constitute such a corporation in the two years prior to the Closing Date)
or (B) in a distribution which otherwise constitutes part of a "plan" or "series
of related transactions" within the meaning of Section 355(e) of the Code in
conjunction with the Merger.
(s) Reorganization under the Code. As of the date of this Agreement,
-----------------------------
neither Globespan nor any of its Subsidiaries has taken any action or knows of
any fact that is reasonably likely to prevent the Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code.
(t) Form S-4; Joint Proxy Statement/Prospectus. None of the
------------------------------------------
information to be supplied by Globespan or its Subsidiaries in the Form S-4 or
the Joint Proxy Statement/Prospectus will, at the time of the mailing of the
Joint Proxy Statement/Prospectus and any amendments or supplements thereto, and
at the time of each of the Globespan Stockholders Meeting and the Virata
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
are made, not misleading. The Joint Proxy Statement/Prospectus will comply, as
of its mailing date, as to form in all material respects with all applicable
law, including the provisions of the Exchange Act, except that no representation
is made by Globespan or Merger Sub with respect to information supplied by
Virata for inclusion therein.
(u) Ownership of Virata Stock. As of the date of this Agreement,
-------------------------
neither Globespan nor any of its Subsidiaries own any shares of Virata Capital
Stock (other than those shares held in a fiduciary capacity for the benefit of
third parties).
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Covenants of Virata. During the period from the date of this
-------------------
Agreement and continuing until the Effective Time, Virata agrees as to itself
and its Subsidiaries that (except as expressly contemplated or permitted by this
Agreement or Section 5.1 of the Virata Disclosure Letter):
(a) Ordinary Course. (i) Virata and its Subsidiaries shall carry on
---------------
their respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore conducted, and
shall use their reasonable commercial efforts to keep available the services of
their respective present officers and key employees, preserve intact their
present lines of business, maintain their rights and franchises and preserve
their relationships with customers, suppliers and others having business
dealings with them to the end that their ongoing businesses shall not be
impaired in any material respect at the Effective Time.
(ii) Virata shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or (B) incur
or commit to any capital expenditures or
-33-
any obligations or liabilities in connection therewith other than capital
expenditures and obligations or liabilities in connection therewith which do not
exceed $5,000,000 in the aggregate for the fiscal quarter beginning on the date
hereof and $5,000,000 in the aggregate for the immediately following fiscal
quarter.
(b) Dividends; Changes in Share Capital. Virata shall not, and shall
-----------------------------------
not permit any of its Subsidiaries to, and shall not propose to, (i) declare or
pay any dividends on or make other distributions in respect of any of its
capital stock, except the declaration and payment of regular dividends from a
Subsidiary of Virata to Virata or to another Subsidiary of Virata in accordance
with past dividend practice, (ii) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, except for any such transaction by a wholly owned Subsidiary of
Virata which remains a wholly owned Subsidiary after consummation of such
transaction, or (iii) repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exercisable for any shares
of its capital stock.
(c) Issuance of Securities. Virata shall not, and shall not permit
----------------------
any of its Subsidiaries to, issue, deliver, sell, pledge or dispose of, or
authorize or propose the issuance, delivery, sale, pledge or disposition of, any
shares of its capital stock of any class, any Voting Debt or any securities
convertible into or exercisable for, or any rights, warrants, calls or options
to acquire, any such shares or Voting Debt, or enter into any commitment,
arrangement, undertaking or agreement with respect to any of the foregoing,
other than or in connection with (i) the issuance of Virata Common Stock upon
the exercise of Virata Stock Options in accordance with their present terms or
pursuant to Virata Stock Options or other stock-based awards granted pursuant to
clause (ii) below, (ii) the granting of Virata Stock Options or other
stock-based awards, other than "reload" stock options (e.g. stock options that,
pursuant to the terms thereof require a new grant of options to the holder upon
the exercise of such initial options), to acquire not more than 2,375,000 shares
of Virata Common Stock granted under Virata Benefit Plans outstanding on the
date hereof in the ordinary course of business consistent with past practice,
(iii) issuances, sales or deliveries by a wholly-owned Subsidiary of Virata of
capital stock to such Subsidiary's parent or another wholly-owned Subsidiary of
Virata, (iv) pursuant to acquisitions and investments as disclosed in Section
5.1(e) or 5.1(g) of the Virata Disclosure Letter or the financings therefor; or
(v) issuances in accordance with the Virata Rights Agreement.
(d) Governing Documents. Except to the extent required to comply with
-------------------
its obligations hereunder or with applicable law, Virata shall not, and shall
not permit its Subsidiaries to, amend or propose to so amend its Certificate of
Incorporation or its By-Laws or other governing documents.
(e) No Acquisitions. Virata shall not, and shall not permit any of
---------------
its Subsidiaries to, acquire or agree to acquire by merger or consolidation, or
by purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or otherwise
acquire or agree to acquire any assets (excluding the acquisition of assets used
in the operations of the business of Virata and its Subsidiaries in the ordinary
course, which assets do not constitute a business unit, division or all or
substantially all of the assets of the
-34-
transferor). Virata shall not, and shall not permit its Subsidiaries to, enter
into any material joint venture, partnership or other similar arrangement.
(f) No Dispositions. Virata shall not, and shall not permit any of
---------------
its Subsidiaries to, sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets (including capital stock of
Subsidiaries of Virata) other than in the ordinary course of business consistent
with past practice.
(g) Investments; Indebtedness. Virata shall not, and shall not permit
-------------------------
any of its Subsidiaries to (i) make any loans, advances or capital contributions
to, or investments in, any other Person, other than (A) loans or investments by
Virata or a Subsidiary of Virata to or in Virata or any Subsidiary of Virata,
(B) in the ordinary course of business consistent with past practice which are
not, individually or in the aggregate, material to Virata and its Subsidiaries
taken together as a whole (provided that none of such transactions referred to
in this clause (B) presents a material risk of making it more difficult to
obtain any approval or authorization required in connection with the Merger
under Regulatory Law) or (ii) except in the ordinary course consistent with past
practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person, issue or sell any debt securities or warrants or
other rights to acquire any debt securities of Virata 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 (other than any wholly owned Subsidiary) or enter into any
arrangement having the economic effect of any of the foregoing.
(h) Tax-Free Qualification. Virata shall use its reasonable
----------------------
commercial efforts not to, and shall use its reasonable commercial efforts not
to permit any of its Subsidiaries to, take any action (including any action
otherwise permitted by this Section 5.1) that would prevent or impede the Merger
from qualifying as a "reorganization" within the meaning of Section 368(a) of
the Code.
(i) Compensation. Except as required by law or by the terms of any
------------
collective bargaining agreement or other agreement in effect as of the date of
this Agreement between Virata or any Subsidiary of Virata and any director,
officer or employee thereof, Virata shall not increase the amount of
compensation of, or pay any severance to (other than in the ordinary course of
business consistent with past practice), any director, officer or (other than in
the ordinary course of business consistent with past practice) key employee of
Virata or any Subsidiary of Virata, or make any increase in or commitment to
increase or accelerate the payment of any employee benefits, grant any
additional Virata Stock Options (except as permitted by Section 5.1(c)), adopt
or amend or make any commitment to adopt or amend any Benefit Plan or fund or
make any contribution to any Virata Benefit Plan or any related trust or other
funding vehicles, other than regularly scheduled contributions to trusts funding
qualified plans. Virata shall not accelerate the vesting of, or the lapsing of
restrictions with respect to any Virata Stock Option, and any option granted or
committed to be granted after the date of this Agreement shall not accelerate as
a result of the approval or consummation of any transaction contemplated by this
Agreement.
(j) Accounting Methods; Tax Matters. Except as disclosed in Virata
-------------------------------
SEC Documents filed prior to the date of this Agreement, or as required by a
Governmental Entity,
-35-
Virata shall not change in any material respect its methods of accounting in
effect at April 1, 2001, except as required by changes in GAAP as concurred in
by Virata's independent public accountants. Virata shall not (i) change its
fiscal year; (ii) make any Tax election that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on Virata; (iii)
settle any material Tax claim or assessment or (iv) surrender any right to claim
a material Tax refund or to any extension or waiver of the limitations period
applicable to any material Tax claim or assessment.
(k) Litigation. Virata shall not, and shall not permit any of its
----------
Subsidiaries to, settle or compromise any material suit, action, proceeding or
regulatory investigation pending for an amount in excess of $100,000 or enter
into any consent decree, injunction or similar restraint or form of equitable
relief in settlement of any suit, action, proceeding or regulatory investigation
pending, except for such consent decrees, injunctions or restraints which would
not individually or in the aggregate have a Material Adverse Effect on Virata.
(l) Intellectual Property Virata shall not transfer or license to any
---------------------
Person or otherwise extend, amend or modify any rights to any Intellectual
Property owned by Virata or its Subsidiaries, other than in the ordinary course
of business or pursuant to any contracts, agreements, arrangements or
understandings currently in place (that have been disclosed in writing to
Globespan prior to the date of this Agreement);
(m) Certain Actions. Other than as expressly permitted by Section
---------------
6.5(b), Virata and its Subsidiaries shall not take any action or omit to take
any action for the purpose of preventing, delaying or impeding the consummation
of the Merger or the other transactions contemplated by this Agreement.
(n) No Related Actions. Virata shall not, and shall not permit any of
------------------
its Subsidiaries to, agree or commit to do any of the foregoing.
5.2 Covenants of Globespan. During the period from the date of this
----------------------
Agreement and continuing until the Effective Time, Globespan agrees as to itself
and its Subsidiaries that (except as expressly contemplated or permitted by this
Agreement or Section 5.2 of the Globespan Disclosure Letter):
(a) Ordinary Course. (i) Globespan and its Subsidiaries shall carry on
---------------
their respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore conducted, and
shall use their reasonable commercial efforts to keep available the services of
their respective present officers and key employees, preserve intact their
present lines of business, maintain their rights and franchises and preserve
their relationships with customers, suppliers and others having business
dealings with them to the end that their ongoing businesses shall not be
impaired in any material respect at the Effective Time.
(ii) Globespan shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or (B) incur
or commit to any capital expenditures or any obligations or liabilities in
connection therewith other than capital expenditures and obligations or
liabilities in connection therewith which do not exceed
-36-
$5,000,000 in the aggregate for the fiscal quarter beginning on the date hereof
and $5,000,000 in the aggregate for the immediately following fiscal quarter.
(b) Dividends; Changes in Share Capital. Globespan shall not, and
-----------------------------------
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except the declaration and payment of regular dividends from
a Subsidiary of Globespan to Globespan or to another Subsidiary of Globespan in
accordance with past dividend practice, (ii) split, combine or reclassify any of
its capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, except for any such transaction by a wholly owned Subsidiary of
Globespan which remains a wholly owned Subsidiary after consummation of such
transaction, or (iii) repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exercisable for any shares
of its capital stock.
(c) Issuance of Securities. Globespan shall not, and shall not
----------------------
permit any of its Subsidiaries to, issue, deliver, sell, pledge or dispose of,
or authorize or propose the issuance, delivery, sale, pledge or disposition of,
any shares of its capital stock of any class, any Voting Debt or any securities
convertible into or exercisable for, or any rights, warrants, calls or options
to acquire, any such shares or Voting Debt, or enter into any commitment,
arrangement, undertaking or agreement with respect to any of the foregoing,
other than or in connection with (i) the issuance of Globespan Common Stock and
Globespan Stock Options pursuant to the transactions contemplated by this
Agreement, (ii) the issuance of Globespan Common Stock upon the exercise of
Globespan Stock Options in accordance with their present terms or pursuant to
Globespan Stock Options or other stock-based awards, other than "reload" stock
options (e.g. stock options that, pursuant to the terms thereof require a new
grant of options to the holder upon the exercise of such initial options),
granted pursuant to clause (iii) below, (iii) the granting of Globespan Stock
Options or other stock-based awards to acquire not more than 2,677,500 shares of
Globespan Common Stock granted under Globespan Benefit Plans outstanding on the
date hereof in the ordinary course of business consistent with past practice,
(iv) issuances, sales or deliveries by a wholly-owned Subsidiary of Globespan of
capital stock to such Subsidiary's parent or another wholly-owned Subsidiary of
Globespan, (v) issuances upon conversion of the Globespan Convertible Notes,
(vi) issuances of up to 450,000 shares of Globespan Common Stock upon exercise
of the Globespan Warrant, or (vii) pursuant to acquisitions and investments as
disclosed in Section 5.2(e) or 5.2(g) of the Globespan Disclosure Letter or the
financings therefor.
(d) Governing Documents. Except to the extent required to comply
-------------------
with their respective obligations hereunder or with applicable law, Globespan
and Merger Sub shall not, and shall not permit their respective Subsidiaries to,
amend or propose to so amend their respective Certificates of Incorporation or
By-Laws or other governing documents.
(e) No Acquisitions. Globespan shall not, and shall not permit
---------------
any of its Subsidiaries to, acquire or agree to acquire by merger or
consolidation, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof or otherwise acquire or agree to acquire any assets (excluding
the acquisition of assets
-37-
used in the operations of the business of Globespan and its Subsidiaries in the
ordinary course, which assets do not constitute a business unit, division or all
or substantially all of the assets of the transferor). Globespan shall not, and
shall not permit its Subsidiaries to, enter into any material joint venture,
partnership or other similar arrangement.
(f) No Dispositions. Globespan shall not, and shall not permit any of
---------------
its Subsidiaries to, sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets (including capital stock of
Subsidiaries of Globespan) other than in the ordinary course of business
consistent with past practice.
(g) Investments; Indebtedness. Globespan shall not, and shall not
-------------------------
permit any of its Subsidiaries to (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (A) loans or
investments by Globespan or a Subsidiary of Globespan to or in Globespan or any
Subsidiary of Globespan, (B) in the ordinary course of business consistent with
past practice which are not, individually or in the aggregate, material to
Globespan and its Subsidiaries taken as a whole (provided that none of such
--------
transactions referred to in this clause (B) presents a material risk of making
it more difficult to obtain any approval or authorization required in connection
with the Merger under Regulatory Law) or (ii) except in the ordinary course
consistent with past practice, incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of
Globespan 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 (other than any wholly owned Subsidiary)
or enter into any arrangement having the economic effect of any of the
foregoing.
(h) Tax-Free Qualification. Globespan shall use its reasonable
----------------------
commercial efforts not to, and shall use its reasonable commercial efforts not
to permit any of its Subsidiaries to, take any action (including any action
otherwise permitted by this Section 5.2) that would prevent or impede the Merger
from qualifying as a "reorganization" within the meaning of Section 368(a) of
the Code.
(i) Compensation. Except as required by law or by the terms of any
------------
collective bargaining agreement or other agreement in effect as of the date of
this Agreement between Globespan or any Subsidiary of Globespan and any
director, officer or employee thereof, Globespan shall not increase the amount
of compensation of, or pay any severance to (other than in the ordinary course
of business consistent with past practice), any director, officer or (other than
in the ordinary course of business consistent with past practice) key employee
of Globespan or any Subsidiary of Globespan, or make any increase in or
commitment to increase or accelerate the payment of any employee benefits, grant
any additional Globespan Stock Options (except as permitted by Section 5.1(c)),
adopt or amend or make any commitment to adopt or amend any Benefit Plan (other
than as permitted herein) or fund or make any contribution to any Globespan
Benefit Plan or any related trust or other funding vehicles, other than
regularly scheduled contributions to trusts funding qualified plans. Globespan
shall not accelerate the vesting of, or the lapsing of restrictions with respect
to any Globespan Stock Option, and any option granted or committed to be granted
after the date of this Agreement shall not accelerate as a result of the
approval or consummation of any transaction contemplated by this Agreement.
-38-
(j) Accounting Methods; Tax Matters. Except as disclosed in Globespan
-------------------------------
SEC Documents filed prior to the date of this Agreement, or as required by a
Governmental Entity, Globespan shall not change in any material respect its
methods of accounting in effect at March 31, 2001, except as required by changes
in GAAP as concurred in by Globespan's independent public accountants. Globespan
shall not (i) change its fiscal year, (ii) make any Tax election that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Globespan, (iii) settle any material Tax claim or
assessment or (iv) surrender any right to claim a material Tax refund or to any
extension or waiver of the limitations period applicable to any material Tax
claim or assessment.
(k) Litigation. Globespan shall not, and shall not permit any of its
----------
Subsidiaries to, settle or compromise any material suit, action, proceeding or
regulatory investigation pending for an amount in excess of $100,000 or enter
into any consent decree, injunction or similar restraint or form of equitable
relief in settlement of any suit, action, proceeding or regulatory investigation
pending, except for such consent decrees, injunctions or restraints which would
not individually or in the aggregate have a Material Adverse Effect on
Globespan.
(l) Intellectual Property. Globespan shall not transfer or license to
---------------------
any Person or otherwise extend, amend or modify any rights to any Intellectual
Property owned by Globespan or its Subsidiaries, other than in the ordinary
course of business or pursuant to any contracts, agreements, arrangements or
understandings currently in place (that have been disclosed in writing to Virata
prior to the date of this Agreement);
(m) Certain Actions. Other than as expressly permitted by Section
---------------
6.5(b), Globespan and its Subsidiaries shall not take any action or omit to take
any action for the purpose of preventing, delaying or impeding the consummation
of the Merger or the other transactions contemplated by this Agreement.
(n) No Related Actions. Globespan shall not, and shall not permit any
------------------
of its Subsidiaries to, agree or commit to do any of the foregoing.
5.3 Governmental Filings. Virata and Globespan shall (a) confer on a
--------------------
reasonable basis with each other and (b) report to each other (to the extent
permitted by applicable law or regulation or any applicable confidentiality
agreement) on operational matters. Virata and Globespan shall file all reports
and correspondence required to be filed by each of them with the SEC (and all
other Governmental Entities) between the date of this Agreement and the
Effective Time and shall, if requested by the other party and (to the extent
permitted by applicable law or regulation or any applicable confidentiality
agreement) deliver to the other party copies of all such reports,
correspondence, announcements and publications promptly upon request.
5.4 Control of Other Party's Business. Nothing contained in this
---------------------------------
Agreement shall give Virata, directly or indirectly, the right to control or
direct Globespan's operations or give Globespan, directly or indirectly, the
right to control or direct Virata's operations prior to the Effective Time.
Prior to the Effective Time, each of Virata and Globespan shall exercise,
consistent with the terms and conditions of this Agreement, complete control and
supervision over its respective operations.
-39-
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Preparation of Proxy Statement; Stockholders Meetings. (a) As
-----------------------------------------------------
promptly as reasonably practicable following the date hereof, Globespan and
Virata shall cooperate in preparing and each shall cause to be filed with the
SEC mutually acceptable proxy materials that shall constitute the Joint Proxy
Statement/Prospectus and Globespan shall prepare and file with the SEC the Form
S-4. The Joint Proxy Statement/Prospectus will be included as a prospectus in
and will constitute a part of the Form S-4 as Globespan's prospectus. Each of
Globespan and Virata shall use reasonable commercial efforts to have the Joint
Proxy Statement/Prospectus cleared by the SEC and the Form S-4 declared
effective by the SEC and to keep the Form S-4 effective as long as is necessary
to consummate the Merger and the transactions contemplated hereby. Each of
Globespan and Virata shall, as promptly as practicable after receipt thereof,
provide the other party with copies of any written comments and advise each
other of any oral comments with respect to the Joint Proxy Statement/Prospectus
or Form S-4 received from the SEC. The parties shall cooperate and provide the
other party with a reasonable opportunity to review and comment on any amendment
or supplement to the Joint Proxy Statement/Prospectus and the Form S-4 prior to
filing such with the SEC and will provide each other with a copy of all such
filings made with the SEC. Notwithstanding any other provision herein to the
contrary, no amendment or supplement (including by incorporation by reference)
to the Joint Proxy Statement/Prospectus or the Form S-4 shall be made without
the approval of both Globespan and Virata, which approval shall not be
unreasonably withheld or delayed; provided that, with respect to documents filed
--------
by a party hereto that are incorporated by reference in the Form S-4 or Joint
Proxy Statement/Prospectus, this right of approval shall apply only with respect
to information relating to the other party or its business, financial condition
or results of operations; and provided, further, that Globespan, in connection
-------- -------
with a Change in the Globespan Recommendation, and Virata, in connection with a
Change in the Virata Recommendation, may amend or supplement the Joint Proxy
Statement/Prospectus or Form S-4 (including by incorporation by reference)
pursuant to a Qualifying Amendment to effect such a Change, and in such event,
this right of approval shall apply only with respect to information relating to
the other party or its business, financial condition or results of operations,
and shall be subject to the right of each party to have its Board of Directors'
deliberations and conclusions to be accurately described. Globespan will use
reasonable commercial efforts to cause the Joint Proxy Statement/Prospectus to
be mailed to Globespan stockholders, and Virata will use reasonable commercial
efforts to cause the Joint Proxy Statement/Prospectus to be mailed to Virata
stockholders, in each case, as promptly as practicable after the Form S-4 is
declared effective under the Securities Act. Each party hereto will advise the
other party, promptly after it receives notice thereof, of the time when the
Form S-4 has become effective, the issuance of any stop order, the suspension of
the qualification of the Globespan Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Joint Proxy Statement/Prospectus or the Form S-4. If, at any
time prior to the Effective Time, any information relating to Globespan or
Virata, or any of their respective affiliates, officers or directors, is
discovered by Globespan or Virata and such information should be set forth in an
amendment or supplement to any of the Form S-4 or the Joint Proxy
Statement/Prospectus so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light
-40-
of the circumstances under which they were made, not misleading, the party
hereto discovering such information shall promptly notify the other parties
hereto and, to the extent required by law, rules or regulations, an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and disseminated to the stockholders of Globespan and Virata.
(b) Virata shall duly take all lawful action to call, give notice of,
convene and hold the Virata Stockholders Meeting as soon as practicable on a
date determined in accordance with the mutual agreement of Globespan and Virata
for the purpose of obtaining the Virata Stockholder Approval and, subject to
Section 6.5, shall take all lawful action to solicit the Virata Stockholder
Approval. The Board of Directors of Virata shall recommend the approval of the
plan of merger contained in this Agreement by the stockholders of Virata to the
effect as set forth in Section 4.1(p) (the "Virata Recommendation"), and shall
---------------------
not (i) withdraw, modify or qualify (or propose to withdraw, modify or qualify)
in any manner adverse to Globespan such recommendation or (ii) take any action
or make any statement in connection with the Virata Stockholders Meeting
inconsistent with such recommendation (collectively, a "Change in the Virata
--------------------
Recommendation"); provided, however, that the Board of Directors of Virata may
-------------- -------- -------
make a Change in the Virata Recommendation pursuant to Section 6.5 hereof.
Notwithstanding any Change in the Virata Recommendation, this Agreement shall be
submitted to the stockholders of Virata at the Virata Stockholders Meeting for
the purpose of approving and adopting this Agreement and the Merger and nothing
contained herein shall be deemed to relieve Virata of such obligation.
(c) Globespan shall duly take all lawful action to call, give notice
of, convene and hold the Globespan Stockholders Meeting as soon as practicable
on a date determined in accordance with the mutual agreement of Globespan and
Virata for the purpose of obtaining the Globespan Stockholder Approval and,
subject to Section 6.5, shall take all lawful action to solicit the Globespan
Stockholder Approval. The Board of Directors of Globespan shall recommend the
approval of issuance of Globespan Common Stock in the Merger by the stockholders
of Globespan (the "Globespan Recommendation"), and shall not (i) withdraw,
------------------------
modify or qualify (or propose to withdraw, modify or qualify) in any manner
adverse to Virata such recommendation or (ii) take any action or make any
statement in connection with the Globespan Stockholders Meeting inconsistent
with such recommendation (collectively, a "Change in the Globespan
-----------------------
Recommendation"); provided, however, that the Board of Directors of Globespan
-------------- -------- -------
may make a Change in the Globespan Recommendation pursuant to Section 6.5
hereof. Notwithstanding any Change in the Globespan Recommendation, this
Agreement shall be submitted to the stockholders of Globespan at the Globespan
Stockholders Meeting for the purpose of approving and adopting this Agreement
and the Merger and the issuance of Globespan Common Stock in the Merger and
nothing contained herein shall be deemed to relieve Globespan of such
obligation.
6.2 Globespan Board of Directors and Officers; Headquarters;
-------------------------------------------------------
Integration and Transition. (a) At the Effective Time and for the duration of
--------------------------
the Transition Period,Globespan shall take all requisite action to cause its
Board of Directors to consist of eight individuals, four of whom shall be
designated by Globespan prior to the Effective Time and four of whom shall be
designated by Virata prior to the Effective Time. The By-laws of Globespan shall
be amended as of the Effective Time to provide that (1) if an individual
designated as a Globespan representative by Globespan resigns, dies or is
removed during the Transition Period such
-41-
individual be replaced by the remaining Globespan representatives (or their
successors), (2) if an individual designated as a Virata representative by
Virata resigns, dies or is removed during the Transition Period such individual
be replaced by the remaining Virata representatives (or their successors) and
(3) for the duration of the Transition Period, the affirmative vote of 75% or
more of the directors of the full Board of Directors of Globespan shall be
required to change the number of directors on the full Board of Directors of
Globespan.
(b) Immediately following the Effective Time, (i) Globespan shall take
all requisite action to appoint Xxxxxxx Xxxxx to serve, at the discretion of the
Board of Directors of Globespan, as the Chief Executive Officer of Globespan,
(ii) Globespan shall take all requisite action to appoint Xxxxxxx Xxxxxx to
serve, (A) during the Transition Period, at the discretion of the Board of
Directors of Globespan, as the Executive Chairman of the Board of Globespan, and
(B) following the Transition Period, at the discretion of the Board of
Directors, as the Non-Executive Chairman of the Board of Globespan, and (iii)
Globespan shall adopt appropriate amendments to the By-laws of Globespan,
effective as of the Effective Time, such that during the Transition Period
neither Xxxxxxx Xxxxx nor Xxxxxxx Xxxxxx may be removed from their respective
position as Chief Executive Officer and Chairman of the Board without the
affirmative vote of 75% of the full Board of Directors; and (iv) Globespan shall
take all requisite action to cause the individuals designated by the Transition
Committee to be appointed to the offices of Globespan designated by the
Transition Committee.
(c) Following the Effective Time, the headquarters for Globespan shall
be located in Red Bank, New Jersey.
(d) During the Transition Period, the Board of Directors of Globespan
shall create and empower a committee (the "Transition Committee") consisting
--------------------
initially of the Chief Executive Officer and the Chairman. For the avoidance of
doubt, the members of the Transition Committee need not be members of the Board
of Directors of Globespan or of the Board of Directors of Virata. The Transition
Committee shall be co-chaired by the Chief Executive Officer and the Chairman,
and subject to the authority of the full Board of Directors, the Transition
Committee shall oversee decisions regarding personnel and other matters relating
to the integration of Globespan and Virata. Globespan shall adopt appropriate
amendments to its By-laws, such that other than as provided herein, during the
Transition Period, any management decisions relating to changes in members of
management designated by the Transition Committee, significant reductions in
staff or facilities closure shall require the joint approval of the Chief
Executive Officer and the Chairman.
(e) As of the date hereof, Globespan has entered into an employment
agreement, to be effective as of the Closing, with each of Xxxxxxx Xxxxx and
Xxxxxxx Xxxxxx, such employment agreements shall not be amended or modified
prior to the Effective Time without the prior written consent of Virata.
(f) Each of Globespan and Virata shall endeavor to agree, prior to the
mailing of the Joint Proxy Statement/Prospectus, on appropriate employment
arrangements with the executives designated by the Transition Committee;
provided, however that neither Globespan nor Virata shall enter into any such
-------- -------
employment or other arrangement (other than as set forth in Sec-
-42-
tion 6.2(e) above), that would be effective after the Effective Time, without
the prior written consent of the other.
6.3 Access to Information. Upon reasonable notice, each of Globespan
---------------------
and Virata shall (and shall cause its Subsidiaries to) afford to the officers,
employees, accountants, counsel, financial advisors and other representatives of
the other party reasonable access during normal business hours, during the
period prior to the Effective Time, to all its properties, books, contracts,
commitments, records, officers and employees and, during such period, each of
Globespan and Virata shall (and shall cause its Subsidiaries to) furnish
promptly to the other party (a) a copy of each report, schedule, registration
statement and other document filed, published, announced or received by it
during such period pursuant to the requirements of U.S. federal or state
securities laws or the HSR Act or any other Regulatory Law, as applicable (other
than documents that such party is not permitted to disclose under applicable
law), and (b) all other information concerning it and its business, properties
and personnel as such other party may reasonably request; provided, however,
-------- -------
that either Globespan or Virata may restrict the foregoing access to the extent
that (i) any law, treaty, rule or regulation of any Governmental Entity
applicable to it or any contract requires it or its Subsidiaries to restrict or
prohibit access to any such properties or information or (ii) the information is
subject to confidentiality obligations to a third party. Each of Globespan and
Virata will hold any information obtained pursuant to this Section 6.3 in
confidence in accordance with, and shall otherwise be subject to, the provisions
of the confidentiality agreement dated July 19, 2001, between Globespan and
Virata (the "Confidentiality Agreement"), which Confidentiality Agreement shall
-------------------------
continue in full force and effect. Any investigation by either Globespan or
Virata shall not affect the representations and warranties of the other.
6.4 Reasonable Commercial Efforts. (a) Subject to the terms and
-----------------------------
conditions of this Agreement, each party hereto will use its reasonable
commercial efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable under this Agreement
and applicable laws and regulations to consummate the Merger and the other
transactions contemplated by this Agreement as soon as practicable after the
date hereof, including (i) preparing and filing as promptly as practicable all
documentation to effect all necessary applications, notices, petitions, filings,
and other documents and to obtain as promptly as practicable all Necessary
Consents and all other consents, waivers, licenses, orders, registrations,
approvals, permits, rulings, authorizations and clearances necessary or
advisable to be obtained from any third party and/or any Governmental Entity in
order to consummate the Merger or any of the other transactions contemplated by
this Agreement (collectively, the "Required Approvals") and (ii) taking all
------------------
reasonable steps as may be necessary to obtain all such Required Approvals. In
furtherance and not in limitation of the foregoing, each of Globespan and Virata
agrees (i) to make, as promptly as practicable, (A) an appropriate filing of a
Notification and Report Form pursuant to the HSR Act (and any other required
filing under any other Regulatory Law) with respect to the transactions
contemplated hereby and (B) all other necessary filings with other Governmental
Entities relating to the Merger and the other transactions contemplated by this
Agreement, and, to supply as promptly as practicable any additional information
or documentation that may be requested pursuant to such laws or by such
Governmental Entities and to use reasonable commercial efforts to cause the
expiration or termination of the applicable waiting periods under the HSR Act or
any other Regulatory Law and the receipt of Required Approvals under such other
laws or from such Governmental Entities
-43-
as soon as practicable and (ii) not to extend any waiting period under the HSR
Act or any other Regulatory Law or enter into any agreement with the FTC or the
DOJ not to consummate the transactions contemplated by this Agreement, except
with the prior written consent of the other parties hereto (which consent shall
not be unreasonably withheld or delayed). Notwithstanding anything to the
contrary in this Agreement, neither Globespan nor Virata nor any of their
respective Subsidiaries shall be required to hold separate (including by trust
or otherwise) or to divest or agree to divest any of their respective businesses
or assets, or to take or agree to take any action or agree to any limitation
that could reasonably be expected to have a Material Adverse Effect on Globespan
(assuming the Merger has been consummated) or to substantially impair the
benefits to Globespan and Virata expected, as of the date hereof, to be realized
from consummation of the Merger, and neither Globespan or Virata shall be
required to agree to or effect any divestiture, hold separate any business or
take any other action that is not conditional on the consummation of the Merger.
(b) Each of Virata and Globespan shall, in connection with the efforts
referenced in Section 6.4(a) to obtain all Required Approvals, use its
reasonable commercial efforts to (i) cooperate in all respects with each other
in connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party, (ii) subject to applicable law, permit the other party to review in
advance any proposed written communication between it and any Governmental
Entity, (iii) promptly inform each other of (and, at the other party's
reasonable request, supply to such other party) any communication (or other
correspondence or memoranda) received by such party from, or given by such party
to, the DOJ, the FTC or any other Governmental Entity and of any material
communication received or given in connection with any proceeding by a private
party, in each case regarding any of the transactions contemplated hereby, and
(iv) consult with each other in advance to the extent practicable of any meeting
or conference with the DOJ, the FTC or any other Governmental Entity or, in
connection with any proceeding by a private party, with any other Person, and to
the extent permitted by the DOJ, the FTC or such other applicable Governmental
Entity or other Person, give the other party the opportunity to attend and
participate in such meetings and conferences.
(c) In furtherance and not in limitation of the covenants of the
parties hereto contained in Section 6.4(a) and 6.4(b), if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Regulatory Law, or if any
statute, rule, regulation, executive order, decree, injunction or administrative
order is enacted, entered, promulgated or enforced by a Governmental Entity that
would make the Merger or the other transactions contemplated hereby illegal or
would otherwise prohibit or materially impair or delay the consummation of the
Merger or the other transactions contemplated hereby, each of Virata and
Globespan shall cooperate in all respects with each other and use its respective
reasonable commercial efforts, including, subject to Section 6.4(a), selling,
holding separate or otherwise disposing of or conducting their business in a
specified manner, or agreeing to sell, hold separate or otherwise dispose of or
conduct their business in a specified manner or permitting the sale, holding
separate or other disposition of, any assets of Globespan, Virata or their
respective Subsidiaries or the conducting of their business in a specified
manner, to contest and resist any such action or proceeding and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or other order,
whether temporary,
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preliminary or permanent, that is in effect and that prohibits, prevents or
restricts consummation of the Merger or the other transactions contemplated by
this Agreement and to have such statute, rule, regulation, executive order,
decree, injunction or administrative order repealed, rescinded or made
inapplicable so as to permit consummation of the transactions contemplated by
this Agreement. Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 6.4 shall limit a party hereto's right to
terminate this Agreement pursuant to Section 8.1(b) or 8.1(c) so long as such
party hereto has up to then complied with its obligations under this Section
6.4.
(d) Each of Globespan and Virata and their respective Boards of
Directors shall, if any state takeover statute or similar statute becomes
applicable to this Agreement, the Merger or any other transactions contemplated
hereby, take all action reasonably necessary to ensure that the Merger and the
other transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated hereby and otherwise to minimize the
effect of such statute or regulation on this Agreement, the Merger and the other
transactions contemplated hereby.
6.5 Acquisition Proposals. (a) Each of Globespan and Virata agrees
---------------------
that neither it nor any of its Subsidiaries nor any of the officers and
directors of it or its Subsidiaries shall, and that it shall use its reasonable
commercial efforts to cause its and its Subsidiaries' employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly, (i)
initiate, solicit, encourage or knowingly facilitate any inquiries or the making
of any proposal or offer with respect to, or a transaction to effect, a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving it
or any of its Significant Subsidiaries, or any purchase or sale of 20% or more
of the consolidated assets (including stock of its Subsidiaries) of it and its
Subsidiaries, taken as a whole, or any purchase or sale of, or tender or
exchange offer for, its equity securities that, if consummated, would result in
any Person (or the stockholders of such Person) beneficially owning securities
representing 20% or more of its total voting power (or of the surviving parent
entity in such transaction) or the voting power of any of its Significant
Subsidiaries (any such proposal, offer or transaction (other than a proposal or
offer made by any party to this Agreement or an Affiliate thereof), an
"Acquisition Proposal"), (ii) have any discussion with or provide any
--------------------
confidential information or data to any Person relating to an Acquisition
Proposal, or engage in any negotiations concerning an Acquisition Proposal, or
knowingly facilitate any effort or attempt to make or implement an Acquisition
Proposal, (iii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal or (iv) approve or recommend, or propose to
approve or recommend, or execute or enter into, any letter of intent, agreement
in principle, merger agreement, acquisition agreement, option agreement or other
similar agreement or propose publicly or agree to do any of the foregoing
related to any Acquisition Proposal.
(b) Notwithstanding anything in this Agreement to the contrary, each
of Globespan and Virata (and their respective Boards of Directors) shall be
permitted to (i) comply with applicable law (including Rule 14d-9 and Rule 14e-2
promulgated under the Exchange Act) with regard to an Acquisition Proposal, (ii)
effect a Change in the Globespan Recommendation or a Change in the Virata
Recommendation, as the case may be, or (iii) engage in discussions or
negotiations with, or provide any information to, any Person in response to an
unsolicited bona
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fide written Acquisition Proposal by any such Person, if and only to the extent
that, in any such case referred to in clause (ii) or (iii), (A) in the case of
Globespan, the Globespan Stockholders Meeting shall not have occurred, or in the
case of Virata, the Virata Stockholders Meeting shall not have occurred, (B) (I)
in the case of clause (ii) above, it has received an unsolicited bona fide
written Acquisition Proposal from a third party and its Board of Directors
concludes in good faith that such Acquisition Proposal constitutes a Superior
Proposal and (II) in the case of clause (iii) above, its Board of Directors
concludes in good faith that there is a reasonable likelihood that such
Acquisition Proposal could constitute a Superior Proposal, (C) in the case of
clause (ii) or (iii) above, its Board of Directors, after consultation with
outside counsel, determines in good faith that it is required to do so in the
exercise of its fiduciary duties under applicable law, (D) prior to providing
any information or data to any Person in connection with an Acquisition Proposal
by any such Person, its Board of Directors receives from such Person an executed
confidentiality agreement having provisions that are at least as restrictive to
such Person as the comparable provisions contained in the Confidentiality
Agreement, and (E) prior to providing any information or data to any Person or
entering into discussions or negotiations with any Person, it notifies the other
party promptly of such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought to be
initiated or continued with, any of its representatives, indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any inquiries, proposals or offers. Each of Globespan and Virata
agrees that it will promptly keep each other reasonably informed of the status
and terms of any inquiries, proposals or offers and the status and terms of any
discussions or negotiations, including the identity of the party making such
inquiry, proposal or offer. Each of Globespan and Virata agrees that it will,
and will cause its officers, directors and representatives to, immediately cease
and cause to be terminated any activities, discussions or negotiations existing
as of the date of this Agreement with any parties (other than the parties to
this Agreement) conducted heretofore with respect to any Acquisition Proposal.
Each of Globespan and Virata agrees that it will use reasonable commercial
efforts to promptly inform its directors, officers, key employees, agents and
representatives of the obligations undertaken in this Section 6.5. Nothing in
this Section 6.5 shall (x) permit Globespan or Virata to terminate this
Agreement (except as specifically provided in Article VIII hereof) or (y) affect
or limit any other obligation of Globespan or Virata under this Agreement except
as specifically provided in Sections 6.1(b) and 6.1(c).
6.6 Fees and Expenses. Subject to Section 8.2, whether or not the
-----------------
Merger is consummated, all Expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party hereto
incurring such Expenses, except Expenses incurred in connection with the filing,
printing and mailing of the Joint Proxy Statement/Prospectus and Form S-4, which
shall be shared equally by Globespan and Virata.
6.7 Directors' and Officers' Indemnification and Insurance. Following
------------------------------------------------------
the Effective Time, Globespan shall (a) indemnify and hold harmless, and provide
advancement of expenses to, all past and present directors, officers and
employees of Virata and its Subsidiaries (in all of their capacities) (i) to the
same extent such individuals are indemnified or have the right to advancement of
expenses as of the date of this Agreement by Virata pursuant to Virata's
Certificate of Incorporation, By-Laws and indemnification agreements, if any, in
existence on the date hereof with, or for the benefit of, any directors,
officers and employees of Virata and its Subsidiaries and (ii) without
limitation to subclause (i) above, to the fullest extent permitted by
-46-
law, in each case for acts or omissions 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),
(b) include and cause to be maintained in effect in the Surviving Corporation's
(or any successor's) Certificate of Incorporation and By-Laws for a period of
six (6) years after the Effective Time, provisions regarding elimination of
liability of directors, indemnification of officers, directors and employees and
advancement of expenses that are, in the aggregate, no less advantageous to the
intended beneficiaries than the corresponding provisions contained in the
current Certificate of Incorporation and By-Laws of Virata and (c) cause to be
maintained, for a period of six (6) years after the Effective Time, the current
policies of directors' and officers' liability insurance and fiduciary liability
insurance maintained by Virata (provided that Globespan (or any successor
thereto) may substitute therefor one or more policies of at least the same
coverage and amounts containing terms and conditions that are, in the aggregate,
no less advantageous to the insured) with respect to claims arising from facts
or events that occurred on or before the Effective Time; provided, however, that
-------- -------
in no event shall Globespan be required to expend in any one year an amount in
excess of 300% of the annual premiums paid by Virata on the date hereof for such
insurance; and, provided further that if the annual premiums of such insurance
-------- -------
coverage exceed such amount, Globespan shall obtain a policy with the greatest
coverage available for a cost not exceeding such amount. The obligations of
Globespan under this Section 6.7 shall not be terminated or modified in such a
manner as to adversely affect any indemnitee to whom this Section 6.7 applies
without the consent of such affected indemnitee (it being expressly agreed that
the indemnitees to whom this Section 6.7 applies shall be third-party
beneficiaries of this Section 6.7).
6.8 Employee Benefits. (a) Globespan agrees that, from and after the
-----------------
Effective Time, except as explicitly provided herein, Globespan and its
Subsidiaries shall assume and honor all Virata Benefit Plans in accordance with
their terms as in effect immediately before the Effective Time, subject to any
amendment or termination thereof that may be permitted by such terms or as
otherwise permitted by applicable law. For a period of not less than one year
following the Effective Time, Globespan shall provide, or shall cause to be
provided, to individuals who are employees of Virata and its Subsidiaries
immediately before the Effective Time (other than any employees subject to
collective bargaining agreements) and who continue to be employed by Globespan
and its Subsidiaries after the Effective Time (the "Virata Employees")
----------------
compensation and employee benefits that are, in the aggregate, not less
favorable than those provided to Virata Employees immediately before the
Effective Time (it being understood that discretionary equity and equity based
awards will remain discretionary), as disclosed by Virata to Globespan before
the date of this Agreement; provided, that, with the approval of the Transition
Committee, Globespan may provide Virata Employees with compensation and employee
benefits that are, in the aggregate, not less favorable than those provided to
similarly situated employees of Globespan and its Subsidiaries (it being
understood that discretionary equity and equity based awards will remain
discretionary). Globespan further agrees to honor the terms of all employment
agreements between Globespan and Virata Employees. The foregoing shall not be
construed to prevent the termination of employment of any Virata Employee or the
amendment or termination of any particular Virata Benefit Plan to the extent
permitted by its terms as in effect immediately before the Effective Time or as
otherwise permitted by applicable law. Notwithstanding the foregoing, for a
period of one year following the Effective Time, Globespan and its Subsidiaries
shall not reduce the compensation
-47-
or benefits provided to any current employee of Virata designated by the
Transition Committee without the consent of such person.
(b) For purposes of vesting, eligibility to participate and level of
benefits under the employee benefit plans of Globespan and its Subsidiaries
providing benefits to any Virata Employees after the Effective Time (the "New
---
Plans"), each Virata Employee shall be credited with his or her years of service
-----
with Virata and its Subsidiaries and predecessor employers before the Effective
Time, to the same extent as such Virata Employee was entitled, before the
Effective Time, to credit for such service under any similar Virata Benefit
Plans, except to the extent (i) such credit would result in a duplication of
benefits (ii) such credit would result in benefit accruals under defined benefit
pension plans or similar plans or (iii) prior service credit is not provided to
Globespan employees under a plan. In addition, and without limiting the
generality of the foregoing: (i) each Virata Employee shall be immediately
eligible to participate, without any waiting time, in any and all New Plans to
the extent coverage under such New Plan replaces coverage under a Virata Benefit
Plan in which such Virata Employee participated immediately before the Effective
Time (such plans, collectively, the "Old Plans"); and (ii) for purposes of each
---------
New Plan providing medical, dental, pharmaceutical and/or vision benefits to any
Virata Employee, Globespan shall cause all pre-existing condition exclusions and
actively-at-work requirements of such New Plan to be waived for such employee
and his or her covered dependents, unless such conditions would not have been
waived under the comparable plans of Virata and its Subsidiaries in which such
Virata Employee participated immediately prior to the Effective Time, and
Globespan shall cause any eligible expenses incurred by such employee and his or
her covered dependents during the portion of the plan year of the Old Plan
ending on the date such employee's participation in the corresponding New Plan
begins to be taken into account under such New Plan for purposes of satisfying
all deductible, coinsurance and maximum out-of-pocket requirements applicable to
such employee and his or her covered dependents for the applicable plan year as
if such amounts had been paid in accordance with such New Plan.
(c) The Boards of Directors of Globespan and Virata shall take all
action reasonably necessary (including amending the Virata Stock Plans) such
that, following the Effective Time, Globespan may grant Globespan Common Stock
based equity awards under the Virata Stock Plans by converting the remaining
unissued reserved shares of Virata Common Stock under the Virata Stock Plans
(the "Virata Reserved Shares") into reserved shares of Globespan Common Stock.
----------------------
The number of such shares of Globespan Common Stock shall equal the Virata
Reserved Shares multiplied by the Exchange Ratio.
(d) The Board of Directors of Virata shall take all action to the
extent necessary (including amending the Virata ESPP) such that, the Virata ESPP
will terminate immediately prior to the Effective Time and all participants will
automatically exercise their purchase rights immediately prior to the
termination of the plan. The Board of Directors of Globespan shall take all
action to the extent necessary (including amending the Globespan ESPP) such that
the employees of Virata prior to the Effective Time who become employees of
Globespan or one of its Subsidiaries ("Continuing Virata Employees") after the
Effective Time shall be eligible to participate in the Globespan ESPP as soon as
practicable after the Effective Time. For the avoidance of doubt, Virata agrees
that Globespan may take all action necessary (including amending the Globespan
ESPP) so that current Globespan employees may be afforded the same benefits as
afforded the Continuing Virata Employees.
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6.9 Public Announcements. Globespan and Virata shall use reasonable
--------------------
commercial efforts to develop a joint communications plan and each shall use
reasonable commercial efforts (a) to ensure that all press releases (including a
joint press release announcing the execution of this Agreement) and other public
statements with respect to the transactions contemplated hereby shall be
consistent with such joint communications plan and (b) unless otherwise required
by applicable law or by obligations pursuant to any listing agreement with or
rules of any securities exchange, to consult with the other party before issuing
any press release or, to the extent practical, otherwise making any public
statement with respect to this Agreement or the transactions contemplated
hereby. In addition to the foregoing, except to the extent disclosed in or
consistent with the Joint Proxy Statement/Prospectus in accordance with the
provisions of Section 6.1, neither Globespan nor Virata shall issue any press
release or otherwise make any public statement or disclosure concerning the
other party or the other party's business, financial condition or results of
operations without the consent of the other party, which consent shall not be
unreasonably withheld or delayed.
6.10 Listing of Shares of Globespan Common Stock. Globespan shall use
-------------------------------------------
its reasonable commercial efforts to cause the shares of Globespan Common Stock
to be issued in the Merger and the shares of Globespan Common Stock to be
reserved for issuance upon exercise of the Virata Converted Options to be
approved for listing on NASDAQ, subject to official notice of issuance, prior to
the Closing Date.
6.11 Affiliates. Not less than 45 days prior to the date of the Virata
----------
Stockholders Meeting, Virata shall deliver to Globespan a letter identifying all
Persons who, in the judgment of Virata, may be deemed on such date to be
"affiliates" of Virata for purposes of Rule 145 under the Securities Act and
applicable SEC rules and regulations, and such list shall be updated from time
to time as may be reasonably necessary to reflect changes from the date thereof.
Virata shall use reasonable commercial efforts to cause each Person identified
on such list to deliver to Globespan not later than ten days prior to the
Effective Time, a written agreement substantially in the form attached as
Exhibit B hereto (an "Affiliate Agreement").
--------- -------------------
6.12 Section 16 Matters. Prior to the Effective Time, Globespan and
------------------
Virata shall take all such steps as may be required to cause any dispositions of
Virata Common Stock (including derivative securities with respect to Virata
Common Stock) or acquisitions of Globespan Common Stock (including derivative
securities with respect to Globespan Common Stock) resulting from the
transactions contemplated by Article II or Article III by each individual who is
subject to the reporting requirements of Section 16(a) of the Exchange Act with
respect to Virata or will become subject to such reporting requirements with
respect to Globespan, to be exempt under Rule 16b-3 promulgated under the
Exchange Act.
6.13 Notification of Certain Matters. Globespan and Virata shall
-------------------------------
promptly notify each other of (i) the occurrence or non-occurrence of any fact
or event which would be reasonably likely (A) to cause any of its
representations or warranties contained in this Agreement or in the Exhibits,
Schedules, disclosure letters and the other agreements and instruments delivered
in connection herewith to be untrue or inaccurate in any material respect at any
time from the date hereof to the Effective Time or (B) to cause any of the
covenants, conditions or agreements to which it is subject under this Agreement
or in the Exhibits, Schedules, disclosure letters and the other agreements and
instruments delivered in connection
-49-
herewith not to be complied with or satisfied in any material respect and (ii)
any failure of Globespan or Virata, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder or pursuant to the Exhibits, Schedules, disclosure letters and the
other agreements and instruments delivered in connection herewith in any
material respect; provided, however, that no such notification shall affect the
-------- -------
representations or warranties of any party or the conditions to the obligations
of any party hereunder. Each of Globespan and Virata shall give prompt notice to
the other party of any notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement.
6.14 Accountants' Letters. Virata shall use its reasonable commercial
--------------------
efforts to cause to be delivered to Globespan a letter from its independent
public accountants addressed to Globespan, dated a date within two Business Days
before the date on which the Form S-4 shall become effective, in form and
substance reasonably satisfactory to Globespan and customary in scope and
substance for letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.
6.15 Rights Agreement. The Board of Directors of Virata shall take all
----------------
action to the extent necessary (including amending the Virata Rights Agreement)
in order to render the Virata Rights inapplicable to the Merger and the other
transactions contemplated by this Agreement. Except in connection with the
foregoing sentence, the Board of Directors of Virata shall not, without the
prior written consent of Globespan, (i) amend the Virata Rights Agreement or
(ii) take any action with respect to, or make any determination under, the
Virata Rights Agreement, including a redemption of the Virata Rights, in each
case in order to facilitate any Acquisition Proposal with respect to Virata.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
----------------------------------------------------------
respective obligations of Virata and Globespan to effect the Merger are subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. (i) Virata shall have obtained the Virata
--------------------
Stockholder Approval and (ii) Globespan shall have obtained the Globespan
Stockholder Approval.
(b) No Injunctions or Restraints; Illegality. No law shall have been
----------------------------------------
adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other Governmental
Entity of competent jurisdiction shall be in effect, having the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger.
(c) HSR Act; Other Approvals. (i) The waiting period (and any
------------------------
extension thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired, and (ii) all other required approvals,
applications or notices with Governmental Entities
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shall have been obtained (the "Other Approvals"), except those Other Approvals
---------------
the failure of which to obtain would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Globespan or Virata.
(d) NASDAQ Listing. The shares of Globespan Common Stock to be issued
--------------
in the Merger and such other shares of Globespan Common Stock to be reserved for
issuance in connection with the Merger shall have been approved for listing on
NASDAQ, subject to official notice of issuance.
(e) Effectiveness of the Form S-4. The Form S-4 shall have been
-----------------------------
declared effective by the SEC under the Securities Act and no stop order
suspending the effectiveness of the Form S-4 shall have been issued by the SEC
and no proceedings for that purpose shall have been initiated or threatened by
the SEC.
7.2 Additional Conditions to Obligations of Globespan. The obligations
-------------------------------------------------
of Globespan to effect the Merger are subject to the satisfaction, or waiver by
Globespan, on or prior to the Closing Date, of the following conditions:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties of Virata set forth in this Agreement, disregarding all
qualifications and exceptions contained therein relating to knowledge,
materiality or Material Adverse Effect, shall be true and correct as of the date
of this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except to the extent that such representations and warranties
speak as of another date, in which case such representations and warranties
shall be true and correct as of such other date), except where the failure of
such representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Virata; and Globespan shall have received a certificate of an
executive officer of Virata to such effect.
(b) Performance of Obligations. Virata shall have performed or
--------------------------
complied with all material agreements and covenants required to be performed by
it under this Agreement, at or prior to the Closing Date that are qualified as
to materiality or Material Adverse Effect and shall have performed or complied
in all material respects with all other material agreements and covenants
required to be performed by it under this Agreement at or prior to the Closing
Date that are not so qualified; and Globespan shall have received a certificate
of an executive officer of Virata to such effect.
(c) Tax Opinion. Globespan shall have received from Wachtell, Lipton,
-----------
Xxxxx & Xxxx, counsel to Globespan, a written opinion, dated the Closing Date,
to the effect that for federal income tax purposes the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Code. In rendering
such opinion, counsel to Globespan shall be entitled to rely upon customary
assumptions and representations reasonably satisfactory to such counsel,
including representations set forth in certificates of officers of Globespan and
Virata.
7.3 Additional Conditions to Obligations of Virata. The obligations of
----------------------------------------------
Virata to effect the Merger are subject to the satisfaction, or waiver by
Virata, on or prior to the Closing Date, of the following additional conditions:
-51-
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties of Globespan and Merger Sub set forth in this Agreement, disregarding
all qualifications and exceptions contained therein relating to knowledge,
materiality or Material Adverse Effect, shall be true and correct as of the date
of this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except to the extent that such representations and warranties
speak as of another date, in which case such representations and warranties
shall be true and correct as of such other date), except where the failure of
such representations and warranties to be true and correct would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Globespan; and Virata shall have received a certificate of an
executive officer of Globespan to such effect.
(b) Performance of Obligations. Globespan and Merger Sub shall have
--------------------------
performed or complied with all material agreements and covenants required to be
performed by it under this Agreement, at or prior to the Closing Date that are
qualified as to materiality or Material Adverse Effect and shall have performed
or complied in all material respects with all other material agreements and
covenants required to be performed by it under this Agreement at or prior to the
Closing Date that are not so qualified; and Virata shall have received a
certificate of an executive officer of Globespan and Merger Sub to such effect.
(c) Tax Opinion. Virata shall have received from Xxxxxx, Xxxx &
-----------
Xxxxxxxx LLP, counsel to Virata, a written opinion, dated the Closing Date, to
the effect that for federal income tax purposes the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Code. In rendering
such opinion, counsel to Virata shall be entitled to rely upon customary
assumptions and representations reasonably satisfactory to such counsel,
including representations set forth in certificates of officers of Globespan and
Virata.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time and, except as specifically provided below, whether before or
after the Globespan Stockholders Meeting or the Virata Stockholders Meeting:
(a) By mutual written consent of Globespan and Virata;
(b) By either Globespan or Virata, if the Effective Time shall not
have occurred on or before March 1, 2002 (the "Termination Date"), however if
----------------
the conditions set forth in Section 7.1(c) have not been satisfied or waived
prior to the Termination Date as set forth in the preceding clause, the
Termination date shall be May 1, 2002; provided, however, that the right to
-------- -------
terminate this Agreement under this Section 8.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement (including
such party's obligations set forth in Section 6.4) has been the primary cause
of, or resulted in, the failure of the Effective Time to occur on or before the
Termination Date;
(c) By either Globespan or Virata, if any Governmental Entity (i)
shall have issued an order, decree or ruling or taken any other action (which
such party shall have used its
-52-
reasonable commercial efforts to resist, resolve or lift, as applicable, in
accordance with Section 6.4) permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and nonappealable or (ii)
shall have failed to issue an order, decree or ruling or to take any other
action which is necessary to fulfill the conditions set forth in Section 7.1(c),
(d) or (e), as applicable, and such denial of a request to issue such order,
decree, ruling or the failure to take such other action shall have become final
and nonappealable (which order, decree, ruling or other action such party shall
have used its reasonable commercial efforts to obtain, in accordance with
Section 6.4); provided, however, that the right to terminate this Agreement
-------- -------
under this Section 8.1(c) shall not be available to any party hereto whose
failure to comply with Section 6.4 has been the primary cause of such action or
inaction;
(d) By either Globespan or Virata, if either the Globespan Stockholder
Approval or the Virata Stockholder Approval has not been obtained by reason of
the failure to obtain the required vote at the Globespan Stockholders Meeting or
the Virata Stockholders Meeting, as applicable;
(e) By Globespan, if Virata shall have (i) failed to make the Virata
Recommendation, failed to reconfirm the Virata Recommendation within ten (10)
Business Days following the reasonable request of Globespan to do so, or
effected a Change in the Virata Recommendation, whether or not permitted by the
terms hereof, (ii) willfully and materially breached its obligations under
Section 6.5, or (iii) materially breached its obligations under this Agreement
by reason of a failure to call the Virata Stockholders Meeting in accordance
with Section 6.1(b) or a failure to prepare and mail to its stockholders the
Joint Proxy Statement/Prospectus in accordance with Section 6.1(a);
(f) By Virata, if Globespan shall have (i) failed to make the
Globespan Recommendation, failed to reconfirm the Globespan Recommendation
within ten (10) Business Days following the reasonable request of Virata to do
so, or effected a Change in the Globespan Recommendation, whether or not
permitted by the terms hereof, (ii) willfully and materially breached its
obligations under Section 6.5, or (iii) materially breached its obligations
under this Agreement by reason of a failure to call the Globespan Stockholders
Meeting in accordance with Section 6.1(c) or a failure to prepare and mail to
its stockholders the Joint Proxy Statement/Prospectus in accordance with Section
6.1(a);
(g) By Globespan, if Virata shall have breached or failed to perform
any of its representations, warranties, covenants or other agreements contained
in this Agreement, such that the conditions set forth in Section 7.2(a) or (b)
are not capable of being satisfied on or before the Termination Date; or
(h) By Virata, if Globespan shall have breached or failed to perform
any of its representations, warranties, covenants or other agreements contained
in this Agreement, such that the conditions set forth in Section 7.3(a) or (b)
are not capable of being satisfied on or before the Termination Date.
8.2 Effect of Termination. (a) In the event of termination of this
---------------------
Agreement by either Virata or Globespan as provided in Section 8.1, this
Agreement shall forthwith become
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void and there shall be no liability or obligation on the part of any party
hereto or their respective officers or directors except with respect to Section
4.1(q), Section 4.2(q), the last sentence of Section 6.3, Section 6.6, this
Section 8.2 and Article IX, which provisions shall survive such termination;
provided that, notwithstanding anything to the contrary contained in this
--------
Agreement, neither Globespan nor Virata shall be relieved or released from any
liabilities or damages arising out of its willful and material breach of this
Agreement.
(b) If (i) (A) (I) either Virata or Globespan terminates this
Agreement pursuant to Section 8.1(d) (provided that the basis for such
--------
termination is the failure to obtain the Virata Stockholder Approval) or
pursuant to Section 8.1(b) without the Virata Stockholders Meeting having
occurred or (II) Globespan terminates this Agreement pursuant to Section 8.1(g),
(B) at any time after the date of this Agreement and before such termination an
Acquisition Proposal with respect to Virata shall have been publicly announced
or otherwise communicated to the senior management, Board of Directors or
stockholders of Virata and (C) within twelve months of such termination Virata
or any of its Subsidiaries enters into any definitive agreement with respect to,
or consummates, any Acquisition Proposal (provided, that, for purposes of this
--------
Section 8.2(b) the references in the definition of "Acquisition Proposal" to
"20%" shall be "50%") or (ii) Globespan terminates this Agreement pursuant to
Section 8.1(e), then Virata shall promptly, but in no event later than one
Business Day after the date of such termination (or in the case of clause (i),
the earlier of the date Virata or its Subsidiary enters into such agreement with
respect to or consummates such Acquisition Proposal), pay Globespan an amount
equal to the Virata Termination Fee, by wire transfer of immediately available
funds.
(c) If (i) (A) (I) either Virata or Globespan terminates this
Agreement pursuant to Section 8.1(d) (provided that the basis for such
--------
termination is the failure to obtain the Globespan Stockholder Approval) or
pursuant to Section 8.1(b) without the Globespan Stockholders Meeting having
occurred or (II) Virata terminates this Agreement pursuant to Section 8.1(h),
(B) at any time after the date of this Agreement and before such termination an
Acquisition Proposal with respect to Globespan shall have been publicly
announced or otherwise communicated to the senior management, Board of Directors
or stockholders of Globespan and (C) within twelve months of such termination
Globespan or any of its Subsidiaries enters into any definitive agreement with
respect to, or consummates, any Acquisition Proposal (provided, that, for
--------
purposes of this Section 8.2(c) the references in the definition of "Acquisition
Proposal" to "20%" shall be "50%") or (ii) Virata terminates this Agreement
pursuant to Section 8.1(f), then Globespan shall promptly, but in no event later
than one Business Day after the date of such termination (or in the case of
clause (i), the earlier of the date Globespan or its Subsidiary enters into such
agreement with respect to or consummates such Acquisition Proposal), pay Virata
an amount equal to the Globespan Termination Fee, by wire transfer of
immediately available funds.
(d) The parties hereto acknowledge that the agreements contained in
this Section 8.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, no party hereto would enter into
this Agreement; accordingly, if any party hereto fails promptly to pay any
amount due pursuant to this Section 8.2, and, in order to obtain such payment,
the other party commences a suit which results in a judgment against such party
for the fee set forth in this Section 8.2, such party shall pay to the other
party its costs and expenses (including attorneys' fees and expenses) in
connection with such suit, together with
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interest on the amount of the fee at the prime rate of Citibank, N.A. in effect
on the date such payment was required to be made, notwithstanding the provisions
of Section 6.6. The parties hereto agree that any remedy or amount payable
pursuant to this Section 8.2 shall not preclude any other remedy or amount
payable hereunder, and shall not be an exclusive remedy, for any willful and
material breach of any representation, warranty, covenant or agreement contained
in this Agreement.
8.3 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 the Globespan Stockholder Approval or the Virata
Stockholder Approval, but, after any such approval, no amendment shall be made
which by law or in accordance with the rules of any relevant stock exchange
requires further approval by such stockholders without such further approval.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
8.4 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 hereto. The
failure of any party hereto to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
ARTICLE IX
GENERAL PROVISIONS
9.1 Non-Survival of Representations, Warranties and Agreements. None
----------------------------------------------------------
of the representations, warranties, covenants and other agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants, agreements and other provisions, shall survive the Closing Date,
except for those covenants, agreements and other provisions contained herein
that by their terms apply or are to be performed in whole or in part after the
Closing Date and this Article IX.
9.2 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or facsimile, upon verbal confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the fifth Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
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(i) if to Globespan to:
Globespan. Inc.
000 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxx
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Silk, Esq.
(ii) if to Virata to:
Virata Corporation
0000 Xxx Xxxxx Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
9.3 Interpretation. When a reference is made in this Agreement to
--------------
Articles, Sections, Exhibits or Schedules, such reference shall be to an Article
or Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." In addition, each Section of this Agreement is
qualified by the matters set forth in the related Section on the Globespan
Disclosure Letter, on the Virata Disclosure Letter and on the other Schedules to
this Agreement. Whenever the term material is used with respect to an entity,
such term shall refer to the entity and all of its Subsidiaries taken together.
9.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts and by facsimile, 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
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and delivered to the other party, it being understood that all parties need not
sign the same counterpart.
9.5 Entire Agreement; No Third Party Beneficiaries. (a) This
----------------------------------------------
Agreement, the Confidentiality Agreement and the Exhibits, Schedules and
disclosure letters and the other agreements and instruments of the parties
hereto delivered in connection herewith constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, other than
Section 6.7 (which is intended to be for the benefit of the Persons covered
thereby).
9.6 Governing Law. This Agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware (without giving effect to
choice of law principles thereof).
9.7 Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties hereto as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
9.8 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns.
9.9 Submission to Jurisdiction; Waivers. Each of Globespan and Virata
-----------------------------------
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect hereof
shall be brought and determined in the Chancery or other Courts of the State of
Delaware, and each of Globespan and Virata hereby irrevocably submits with
regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the exclusive jurisdiction of the
aforesaid courts. Each of Globespan and Virata hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement, (a) any claim that
it is not personally subject to the jurisdiction of the above-named courts for
any reason other than the failure to lawfully serve process, (b) that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process
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commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), (c) to the fullest extent permitted by applicable law, that (i) the
suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts and (d) any right to a trial by jury.
9.10 Enforcement. 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. It is accordingly agreed that
the parties hereto shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled at
law or in equity.
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IN WITNESS WHEREOF, Globespan, Merger Sub and Virata have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
GLOBESPAN, INC.
By: /s/ Globespan, Inc.
_____________________________________
Name:
Title:
WINE ACQUISITION CORP.
By: /s/ Wine Acquisition Corp.
_____________________________________
Name:
Title:
VIRATA CORPORATION
By: /s/ Virata Corporation
_____________________________________
Name:
Title:
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