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EXHIBIT 1
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AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
PROXIM, INC.,
ALK ACQUISITION CORP.
AND
NETOPIA, INC.
DATED AS OF JANUARY 23, 2001
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TABLE OF CONTENTS
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ARTICLE I THE MERGER....................................... 2
1.1 The Merger........................................ 2
1.2 Effective Time; Closing........................... 2
1.3 Effect of the Merger.............................. 2
1.4 Certificate of Incorporation; Bylaws.............. 2
1.5 Directors and Officers............................ 2
1.6 Effect on Capital Stock........................... 3
1.7 Surrender of Certificates; Payment of Cash and
Stock Consideration.................................... 4
1.8 No Further Ownership Rights in Company Common
Stock.................................................. 5
1.9 Lost, Stolen or Destroyed Certificates............ 5
1.10 Tax and Accounting Consequences.................... 5
1.11 Taking of Necessary Action; Further Action......... 5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY....... 6
2.1 Organization and Qualification; Subsidiaries...... 6
2.2 Certificate of Incorporation and Bylaws........... 6
2.3 Capitalization.................................... 6
2.4 Authority Relative to this Agreement.............. 8
2.5 No Conflict; Required Filings and Consents........ 8
2.6 Compliance; Permits............................... 9
2.7 SEC Filings; Financial Statements................. 9
2.8 No Undisclosed Liabilities........................ 10
2.9 Absence of Certain Changes or Events.............. 10
2.10 Absence of Litigation.............................. 10
2.11 Employee Benefit Plans............................. 10
2.12 Labor Matters...................................... 12
2.13 Registration Statement; Joint Proxy
Statement/Prospectus................................... 12
2.14 Restrictions on Business Activities................ 13
2.15 Property........................................... 13
2.16 Taxes.............................................. 13
2.17 Environmental Matters.............................. 15
2.18 Brokers............................................ 15
2.19 Intellectual Property.............................. 15
2.20 Agreements, Contracts and Commitments.............. 19
2.21 Insurance.......................................... 20
2.22 Opinion of Financial Advisor....................... 20
2.23 Board Approval..................................... 20
2.24 Vote Required...................................... 20
2.25 State Takeover Statutes............................ 20
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB................................................ 20
3.1 Organization and Qualification; Subsidiaries...... 20
3.2 Certificate of Incorporation and Bylaws........... 21
3.3 Capitalization.................................... 21
3.4 Parent Common Stock............................... 21
3.5 Authority Relative to this Agreement.............. 21
3.6 No Conflict; Required Filings and Consents........ 22
3.7 SEC Filings; Financial Statements................. 22
3.8 No Undisclosed Liabilities........................ 23
3.9 Absence of Certain Changes or Events.............. 23
3.10 Absence of Litigation.............................. 23
3.11 Registration Statement; Joint Proxy
Statement/Prospectus................................... 23
3.12 Operations of Merger Sub........................... 24
3.13 Brokers............................................ 24
3.14 Intellectual Property.............................. 24
3.15 Opinion of Financial Advisor....................... 24
3.16 Board Approval..................................... 24
3.17 Vote Required...................................... 24
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME............. 24
4.1 Conduct of Business by Company.................... 24
4.2 Conduct of Business by Parent..................... 27
ARTICLE V ADDITIONAL AGREEMENTS............................ 27
5.1 Joint Proxy Statement/Prospectus; Registration
Statement.............................................. 27
5.2 Stockholder Meetings.............................. 28
5.3 Confidentiality; Access to Information............ 29
5.4 No Solicitation................................... 29
5.5 Public Disclosure................................. 30
5.6 Reasonable Efforts; Notification.................. 30
5.7 Third Party Consents.............................. 31
5.8 Stock Options; 401(k) Plan; Employee Benefit
Matters................................................ 31
5.9 Form S-8.......................................... 32
5.10 Indemnification.................................... 33
5.11 Nasdaq Listing..................................... 33
5.12 Affiliates......................................... 33
5.13 Regulatory Filings; Reasonable Efforts............. 33
5.14 Parent Board of Directors.......................... 34
5.15 Obligations of Merger Sub.......................... 34
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ARTICLE VI CONDITIONS TO THE MERGER........................ 34
6.1 Conditions to Obligations of Each Party to Effect
the Merger............................................. 34
6.2 Additional Conditions to Obligations of Company... 35
6.3 Additional Conditions to the Obligations of Parent
and Merger Sub......................................... 35
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.............. 36
7.1 Termination....................................... 36
7.2 Notice of Termination; Effect of Termination...... 37
7.3 Fees and Expenses................................. 37
7.4 Amendment......................................... 38
7.5 Extension; Waiver................................. 38
ARTICLE VIII GENERAL PROVISIONS............................ 38
8.1 Survival of Representations and Warranties........ 38
8.2 Notices........................................... 38
8.3 Interpretation; Definitions....................... 39
8.4 Counterparts...................................... 40
8.5 Entire Agreement; Third Party Beneficiaries....... 40
8.6 Severability...................................... 40
8.7 Other Remedies; Specific Performance.............. 40
8.8 Governing Law..................................... 41
8.9 Rules of Construction............................. 41
8.10 Assignment......................................... 41
INDEX OF EXHIBITS
Exhibit A-1 Form of Company Voting Agreement
Exhibit A-2 Form of Parent Voting Agreement
Exhibit B Form of Stock Option Agreement
Exhibit C Officers Signing Employment and Non-Competition Agreements
Exhibit D Form of Affiliate Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
January 23, 2001, by and among Proxim, Inc., a Delaware corporation ("Parent"),
ALK Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and Netopia, Inc., a Delaware corporation ("Company").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the Delaware General
Corporation Law ("Delaware Law"), Parent and Company intend to enter into a
business combination transaction.
B. The Board of Directors of Company has unanimously (except for director
Xxxxx Xxxx who has recused himself from substantive discussions and votes taken
by the Board of Directors of Company with respect to the transactions
contemplated by this Agreement) (i) approved and declared advisable this
Agreement and has approved the Merger (as defined in Section 1.1) and the other
transactions contemplated hereby, (ii) determined that the Merger is consistent
with and in furtherance of the long-term business strategy of Company and fair
to, and in the best interests of, Company and its stockholders and (iii)
determined to recommended that the stockholders of Company adopt and approve
this Agreement and approve the Merger.
C. The Board of Directors of Parent (i) has determined that the Merger is
consistent with and in furtherance of the long-term business strategy of Parent
and is fair to, and in the best interests of, Parent and its stockholders, (ii)
has approved this Agreement, the Merger and the other transactions contemplated
by this Agreement, and (iii) has determined to recommend that the stockholders
of Parent approve the issuance of shares of Parent Common Stock (as defined
below) pursuant to the Merger (the "Share Issuance").
D. Concurrently with the execution of this Agreement, (i) as a condition
and inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company are entering into Voting Agreements in the form attached
hereto as Exhibit A-1 (the "Company Voting Agreements") and (ii) as a condition
and inducement to Company's willingness to enter into this Agreement, certain
affiliates of Parent are entering into Voting Agreements in the form attached
hereto as Exhibit A-2 (the "Parent Voting Agreements").
E. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, Company is
entering into a Stock Option Agreement in favor of Parent in the form attached
hereto as Exhibit B (the "Option Agreement").
F. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, each of the
officers of Company listed on Exhibit C is entering into an Employment and
Noncompetition Agreement with Parent and Company (the "Employment Agreements").
G. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"). For accounting purposes, the parties intend
that the Merger be treated as a purchase.
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NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Company (the "Merger"), the separate corporate existence of Merger Sub shall
cease, and Company shall continue as the surviving corporation and as a
wholly-owned subsidiary of Parent. Company as the surviving corporation after
the Merger is hereinafter sometimes referred to as the "Surviving Corporation."
1.2 Effective Time; Closing. Subject to the provisions of this Agreement,
the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger, and such other articles, certificates or other
appropriate filing documents with the Secretary of State of the State of
Delaware in accordance with the relevant provisions of Delaware Law
(collectively, the "Certificate of Merger") (the time of such filing (or such
later time as may be agreed in writing by Company and Parent and specified in
the Certificate of Merger) being the "Effective Time") as soon as practicable on
or after the Closing Date (as herein defined). Unless the context otherwise
requires, the term "Agreement" as used herein refers collectively to this
Agreement and Plan of Reorganization and the Certificate of Merger. The closing
of the Merger (the "Closing") shall take place at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx at a time and date to be specified by the parties, which shall be no
later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location as
the parties hereto agree in writing (the "Closing Date").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all the property, rights, privileges, powers, and franchises
of Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of Company and Merger Sub shall become the debts,
liabilities, and duties of the Surviving Corporation.
1.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of the
Surviving Corporation shall, subject to Section 5.10(a) of this Agreement, be
amended and restated to be identical to the Certificate of Incorporation of
Merger Sub as in effect immediately prior to the Effective Time until thereafter
amended as provided by law; provided, however, that at the Effective Time the
Certificate of Incorporation of the Surviving Corporation shall be amended and
restated so that the name of the Surviving Corporation shall be Netopia, Inc.
(b) The Bylaws of the Surviving Corporation shall, subject to Section
5.10(a) of this Agreement, be amended and restated to be identical to those in
effect for Merger Sub immediately prior to the Effective Time until thereafter
amended.
1.5 Directors and Officers. The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and qualified. The initial officers of
the Surviving Corporation shall be the officers of Merger Sub immediately prior
to the Effective Time, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation until their respective
successors are duly appointed.
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1.6 Effect on Capital Stock. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of Merger Sub, Company or the holders of any of the following
securities, the following shall occur:
(a) Conversion of Company Common Stock. Each share of Common Stock,
$0.001 par value per share, of Company (the "Company Common Stock") issued
and outstanding immediately prior to the Effective Time, other than any
shares of Company Common Stock ("Shares") to be cancelled pursuant to
Section 1.6(b), will be cancelled and extinguished and automatically
converted (subject to Sections 1.6(e) and (f)) into the right to receive
that number of shares of Common Stock, $0.001 par value per share, of
Parent (the "Parent Common Stock") equal to 0.3 (the "Exchange Ratio"),
upon surrender of the certificate representing such share of Company Common
Stock in the manner provided in Section 1.7 (or in the case of a lost,
stolen or destroyed certificate, upon delivery of an affidavit (and bond,
if required) in the manner provided in Section 1.9). If any shares of
Company Common Stock outstanding immediately prior to the Effective Time
are unvested or are subject to a repurchase option, risk of forfeiture or
other condition under any applicable restricted stock purchase agreement or
other agreement with the Company, then the shares of Parent Common Stock
issued in exchange for such shares of Company Common Stock will also be
unvested and subject to the same repurchase option, risk of forfeiture or
other condition, and the certificates representing such shares of Parent
Common Stock may accordingly be marked with appropriate legends. The
Company shall take all action that may be necessary to ensure that, from
and after the Effective Time, Parent is entitled to exercise any such
repurchase option or other right set forth in any such restricted stock
purchase agreement or other agreement.
(b) Cancellation of Company-Owned and Parent-Owned Stock. Each share
of Company Common Stock held by Company or owned by Merger Sub, Parent or
any direct or indirect wholly-owned subsidiary of Company or of Parent
immediately prior to the Effective Time shall be cancelled and extinguished
without any conversion thereof.
(c) Stock Options. At the Effective Time, all options to purchase
Company Common Stock and stock appreciation rights then outstanding under
each of Company's 1987 Stock Option Plan, 1996 Stock Option Plan and 2000
Incentive Plan (collectively, the "Company Option Plans"), whether vested
or unvested and whether exercisable or unexercisable, with an exercise
price per share (as of immediately prior to the Effective Time) of less
than $14.87, and the Company Option Plans shall be assumed by Parent in
accordance with Section 5.8 hereof.
(d) Capital Stock of Merger Sub. Each share of Common Stock, $0.001
par value per share, of Merger Sub (the "Merger Sub Common Stock") issued
and outstanding immediately prior to the Effective Time shall be converted
into one validly issued, fully paid and nonassessable share of Common
Stock, $0.001 par value per share, of the Surviving Corporation. Each
certificate evidencing ownership of shares of Merger Sub Common Stock shall
evidence ownership of such shares of capital stock of the Surviving
Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Parent Common Stock or Company Common Stock),
reorganization, recapitalization, reclassification or other like change
with respect to Parent Common Stock or Company Common Stock occurring on or
after the date hereof and prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Parent Common Stock
will be issued by virtue of the Merger, but in lieu thereof, each holder of
shares of Company Common Stock who would otherwise be entitled to a
fraction of a share of Parent Common Stock (after aggregating all
fractional shares of Parent Common Stock that otherwise would be received
by such holder) shall, upon surrender of such holder's Certificates(s) (as
defined in Section 1.7(c)), receive from Parent an amount of cash (rounded
to the nearest whole cent), without interest, equal to the product of (i)
such fraction and (ii) the average closing price of Parent Common Stock for
the five trading days
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immediately preceding the last full trading day prior to the Effective
Time, as reported on the Nasdaq National Market System ("NASDAQ").
1.7 Surrender of Certificates; Payment of Cash and Stock Consideration.
(a) Exchange Agent. Parent shall select a bank or trust company reasonably
acceptable to Company to act as the exchange agent (the "Exchange Agent") in the
Merger.
(b) Parent to Provide Common Stock and Cash Consideration. When and as
needed, Parent shall make available to the Exchange Agent, for exchange in
accordance with this Article I, (i) the shares of Parent Common Stock issuable
pursuant to Section 1.6 in exchange for outstanding shares of Company Common
Stock, and (ii) cash in an amount sufficient for payment in lieu of fractional
shares pursuant to Section 1.6(f) and any dividends or distributions to which
holders of shares of Company Common Stock may be entitled pursuant to Section
1.7(d).
(c) Exchange Procedures. As soon as practicable after the Effective Time,
and in any event not later than ten (10) business days, Parent shall cause the
Exchange Agent to mail to each holder of record (as of the Effective Time) of a
certificate or certificates (the "Certificates"), which immediately prior to the
Effective Time represented outstanding Shares whose Shares were converted into
the right to receive shares of Parent Common Stock pursuant to Section 1.6, cash
in lieu of any fractional shares pursuant to Section 1.6(f), and any dividends
or other distributions pursuant to Section 1.7(d), (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent and shall contain such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of Parent Common
Stock, cash in lieu of any fractional shares pursuant to Section 1.6(f) and any
dividends or other distributions pursuant to Section 1.7(d). Upon surrender of
Certificates for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
the holders of such Certificates shall be entitled to receive in exchange
therefor certificates representing the number of whole shares of Parent Common
Stock into which their shares of Company Common Stock were converted at the
Effective Time, payment in lieu of fractional shares which such holders have the
right to receive pursuant to Section 1.6(f) and any dividends or distributions
payable pursuant to Section 1.7(d), and the Certificates so surrendered shall
forthwith be cancelled. Until so surrendered, outstanding Certificates will be
deemed from and after the Effective Time, for all corporate purposes, subject to
Section 1.7(d) as to the payment of dividends, to evidence only the ownership of
the number of full shares of Parent Common Stock into which such shares of
Company Common Stock shall have been so converted and the right to receive an
amount in cash in lieu of the issuance of any fractional shares in accordance
with Section 1.6(f) and any dividends or distributions payable pursuant to
Section 1.7(d).
(d) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the date of this Agreement with respect to
Parent Common Stock with a record date after the Effective Time will be paid to
the holders of any unsurrendered Certificate(s) with respect to the shares of
Parent Common Stock represented thereby until the holders of record of such
Certificate(s) shall surrender such Certificate(s). Subject to applicable law,
following surrender of any such Certificate(s), the Exchange Agent shall deliver
to the record holders thereof, without interest, a certificate(s) representing
whole shares of Parent Common Stock issued in exchange therefor along with
payment in lieu of fractional shares pursuant to Section 1.6(f) hereof and the
amount of any such dividends or other distributions with a record date after the
Effective Time payable with respect to such whole shares of Parent Common Stock.
(e) Transfers of Ownership. If any certificate representing shares of
Parent Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to Parent or any agent designated by it
any transfer or other taxes required by reason of the issuance of
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certificates representing shares of Parent Common Stock in any name other than
that of the registered holder of the Certificates surrendered, or established to
the satisfaction of Parent or any agent designated by it that such tax has been
paid or is not payable.
(f) Required Withholding. Each of the Exchange Agent, Parent, and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Company Common Stock such amounts as may be required
to be deducted or withheld therefrom under the Code or under any provision of
state, local or foreign tax law or under any other applicable legal requirement.
To the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the person
to whom such amounts would otherwise have been paid.
(g) No Liability. Notwithstanding anything to the contrary in this Section
1.7, neither of the Exchange Agent, Parent, the Surviving Corporation, or any
party hereto shall be liable to a holder of shares of Parent Common Stock or
Company Common Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat, or similar law.
1.8 No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued in accordance with the terms hereof (together with
any cash paid in respect thereof pursuant to Sections 1.6(f) and 1.7(d)) shall
be deemed to have been issued in full satisfaction of all rights pertaining to
such shares of Company Common Stock, and there shall be no further registration
of transfers on the records of the Surviving Corporation of shares of Company
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
this Article I.
1.9 Lost, Stolen or Destroyed Certificates. In the event that any
Certificate shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock into which the shares of Company
Common Stock represented by such Certificates were converted pursuant to Section
1.6, cash for fractional shares, if any, as may be required pursuant to Section
1.6(f) and any dividends or distributions payable pursuant to Section 1.7(d);
provided, however, that Parent may, in its discretion and as a condition
precedent to the issuance of such certificates representing shares of Parent
Common Stock and other distributions, require the owner of such lost, stolen or
destroyed Certificate to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Parent, the Surviving
Corporation, or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
1.10 Tax and Accounting Consequences.
(a) It is intended by the parties hereto that the Merger shall constitute a
reorganization within the meaning of Section 368 of the Code. The parties hereto
adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.
(b) It is intended by the parties hereto that the Merger shall be treated
as a purchase for accounting purposes.
1.11 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title, and possession to all assets, property, rights, privileges, powers
and franchises of Company and Merger Sub, the officers and directors of Company
and Merger Sub are fully authorized in the manner of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
As of the date hereof and as of the Closing Date, Company represents and
warrants to Parent and Merger Sub, subject to such exceptions as are
specifically disclosed in writing in the disclosure letter and schedules thereto
(each such exception referencing the specific section number of this Article II
to which it applies and each other section number of this Article II to the
extent such applicability is reasonably apparent on the face of such exception),
dated as of the date hereof (the "Company Schedule"), as follows:
2.1 Organization and Qualification; Subsidiaries.
(a) Each of Company and its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority to own, lease
and operate its assets and properties and to carry on its business as it is now
being conducted. Each of Company and its subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates, approvals and orders ("Approvals") necessary to own, lease and
operate the properties it purports to own, operate or lease and to carry on its
business as it is now being conducted, except where the failure to have such
Approvals has not had, and would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect (as defined in
Section 8.3(b)(ii)), on Company. Each of Company and its subsidiaries is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that have not had, and would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect on Company.
(b) Company has no subsidiaries except for the corporations identified in
Section 2.1(b) of the Company Schedule. Neither Company nor any of its
subsidiaries has agreed nor is obligated to make nor be bound by any written,
oral or other agreement, contract, subcontract, lease, binding understanding,
instrument, note, option, warranty, purchase order, license, sublicense,
insurance policy, benefit plan, commitment or undertaking of any nature, as of
the date hereof or as may hereafter be in effect (a "Contract") under which it
may become obligated to make, any future investment in or capital contribution
to any other entity. Neither Company nor any of its subsidiaries directly or
indirectly owns any equity or similar interest in or any interest convertible,
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business, association or
entity.
2.2 Certificate of Incorporation and Bylaws. Company has previously
furnished to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date (together, the "Company Charter
Documents"). Such Company Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Company is
not in violation of any of the provisions of the Company Charter Documents, and
no subsidiary of Company is in violation of its equivalent organizational
documents.
2.3 Capitalization.
(a) The authorized capital stock of Company consists of 25,000,000 shares
of Company Common Stock, $0.001 par value, and 5,000,000 shares of Preferred
Stock, $0.001 par value ("Company Preferred Stock"). At the close of business on
January 22, 2001, (i) 17,735,858 shares of Company Common Stock were issued and
outstanding, all of which are validly issued, fully paid and nonassessable; (ii)
no shares of Company Common Stock were held in treasury by Company or by
subsidiaries of Company; (iii) 5,055,731 shares of Company Common Stock were
reserved for issuance upon the exercise of outstanding options to purchase
Company Common Stock under the Company Option Plans; (iv) 960,849 shares of
Company Common Stock were available for future grant under the Company Option
Plans; (v) 138,580 shares of Company Common Stock were available for future
issuance under the Company ESPP; (vi) 3,545,398 shares of Company Common Stock
were reserved for issuance upon exercise of the
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Option Agreement; and (vii) 5,000 shares of Company Common Stock were reserved
for issuance upon the exercise of outstanding warrants to purchase Company
Common Stock (the "Company Warrants"). As of the date hereof, no shares of
Company Preferred Stock were issued or outstanding. Section 2.3(a) of the
Company Schedule sets forth the following information with respect to each
Company Stock Option (as defined in Section 5.8) outstanding as of the close of
business on January 22, 2001: (i) the name and address of the optionee; (ii) the
particular plan pursuant to which such Company Stock Option was granted; (iii)
the number of shares of Company Common Stock subject to such Company Stock
Option; (iv) the exercise price of such Company Stock Option; (v) the date on
which such Company Stock Option was granted; (vi) the applicable vesting
schedule; and (vii) the date on which such Company Stock Option expires. Section
2.3(a) of the Company Schedule also sets forth each outstanding Company Warrant
as of the close of business on January 22, 2001, the name of the holder of such
Company Warrant and the exercise price therefor. Company has made available to
Parent accurate and complete copies of all stock option plans pursuant to which
the Company has granted such Company Stock Options that are currently
outstanding and the form of all stock option agreements evidencing such Company
Stock Options. All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the instrument
pursuant to which they are issuable, would be duly authorized, validly issued,
fully paid and nonassessable. Except as set forth in Section 2.3(a) of the
Company Schedule, there are no commitments or agreements of any character to
which the Company is bound obligating the Company to accelerate the vesting of
any Company Stock Option as a result of the Merger. All outstanding shares of
Company Common Stock, all outstanding Company Stock Options, and all outstanding
shares of capital stock of each subsidiary of the Company have been issued and
granted in compliance in all material respects with (i) all applicable
securities laws and other applicable Legal Requirements (as defined below) and
(ii) all requirements set forth in applicable Contracts. For the purposes of
this Agreement, "Legal Requirements" means any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issues, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity (as defined
below) and (ii) all requirements set forth in applicable contracts, agreements,
and instruments.
(b) Except for securities Company owns free and clear of all liens,
pledges, hypothecations, charges, mortgages, security interests, encumbrances,
claims, infringements, interferences, options, right of first refusals,
preemptive rights, community property interests or restriction of any nature
(including any restriction on the voting of any security, any restriction on the
transfer of any security or other asset, any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset) directly
or indirectly through one or more subsidiaries, and except for shares of capital
stock or other similar ownership interests of subsidiaries of the Company that
are owned by certain nominee equity holders as required by the applicable law of
the jurisdiction of organization of such subsidiaries (which shares or other
interests do not materially affect the Company's control of such subsidiaries),
as of the date of this Agreement, there are no equity securities, partnership
interests or similar ownership interests of any class of equity security of any
subsidiary of the Company, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as set
forth in Section 2.3(a) and except for the Option Agreement, there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Company or any of its
subsidiaries is a party or by which it is bound obligating Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership interests
or similar ownership interests of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to grant, extend, accelerate
the vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement. As of the date of this
Agreement, except as contemplated by this Agreement, there are no registration
rights and there is, except for the Company Voting Agreements, no voting trust,
proxy, rights plan, antitakeover plan or other agreement or understanding to
which the Company or any of its subsidiaries is a party or by which they
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12
are bound with respect to any equity security of any class of the Company or
with respect to any equity security, partnership interest or similar ownership
interest of any class of any of its subsidiaries. Stockholders of Company will
not be entitled to dissenters' rights under applicable state law in connection
with the Merger.
2.4 Authority Relative to this Agreement. Company has all necessary
corporate power and authority to execute and deliver this Agreement and the
Option Agreement and subject to obtaining the approval of the stockholders of
Company of the Merger and the transactions contemplated hereby and thereby, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Option Agreement by Company and the consummation by Company of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Company, and no
other corporate proceedings on the part of Company are necessary to authorize
this Agreement and the Option Agreement or to consummate the transactions so
contemplated (other than, with respect to the Merger, the approval and adoption
of this Agreement by Company's stockholders in accordance with Delaware Law and
the Company Charter Documents and the filing and recordation of the Certificate
of Merger as required by Delaware Law). This Agreement and the Option Agreement
each has been duly and validly executed and delivered by Company and, assuming
the due authorization, execution and delivery by Parent and Merger Sub,
constitute legal and binding obligations of Company, enforceable against Company
in accordance with their respective terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
2.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and the Option Agreement
by Company do not, and the performance of this Agreement and the Option
Agreement by Company will not, (i) conflict with or violate the Company Charter
Documents or the equivalent organizational documents of any of Company's
subsidiaries; (ii) subject to obtaining the approval of Company's stockholders
of the Merger and compliance with the requirements set forth in Section 2.5(b)
below, to the knowledge of Company, conflict with, or result in any violation
of, any law, rule, regulation, order, judgment or decree applicable to Company
or any of its subsidiaries or by which either Company or any of its subsidiaries
or any of their respective properties is bound or affected; or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or impair Company's or any of its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a material lien or encumbrance on
any of the properties or assets of Company or any of its subsidiaries pursuant
to, any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Company or
any of its subsidiaries is a party or by which Company or any of its
subsidiaries or its or any of their respective properties are bound or affected.
(b) The execution and delivery of this Agreement and the Option Agreement
by Company do not, and the performance of this Agreement by Company will not,
require any consent, waiver, approval, authorization or permit of, or filing
with or notification to, any court, administrative agency, commission,
governmental or regulatory authority, domestic or foreign (a "Governmental
Entity"), except (A) for applicable requirements, if any, of the Securities Act
of 1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
"Exchange Act"), state securities laws ("Blue Sky Laws"), the pre-merger
notification requirements (the "HSR Approval") of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (together with the rules and
regulations promulgated thereunder, the "HSR Act"), the rules and regulations of
Nasdaq, state takeover laws and the filing and recordation of the Certificate of
Merger as required by Delaware Law and (B) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings
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or notifications, would not reasonably be expected to have a Material Adverse
Effect on Company or a material adverse effect on the ability of Company to
perform its obligations under this Agreement, or prevent consummation of the
Merger or otherwise prevent the parties hereto from performing their obligations
under this Agreement.
2.6 Compliance; Permits.
(a) Neither Company nor any of its subsidiaries is in conflict with, or in
default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to Company or any of its subsidiaries or by which its or any
of their respective properties is bound or affected or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Company or any of its subsidiaries is a
party or by which Company or any of its subsidiaries or its or any of their
respective properties is bound or affected, except for any conflicts, defaults
or violations that (individually or in the aggregate) would not be material to
the business of Company as currently conducted. No investigation or review by
any governmental or regulatory body or authority is pending or, to the knowledge
of Company, threatened against Company or its subsidiaries, nor has any
governmental or regulatory body or authority indicated to Company or any of its
subsidiaries an intention to conduct the same, other than, in each such case,
those the outcome of which would not, individually or in the aggregate,
reasonably be expected to have the effect of prohibiting or materially impairing
any current business practice of the Company or any of its subsidiaries, any
acquisition of material property by the Company or any of its subsidiaries or
the conduct of business by the Company or any of its subsidiaries.
(b) Company and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities which are
material to operation of the business of Company and its subsidiaries taken as a
whole (collectively, the "Company Permits"). Company and its subsidiaries are in
compliance in all material respects with the terms of the Company Permits.
2.7 SEC Filings; Financial Statements.
(a) Company has made available to Parent a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Company with the Securities and Exchange Commission ("SEC") since
December 31, 1999 (the "Company SEC Reports"), which are all the forms, reports
and documents required to be filed by Company with the SEC since December 31,
1999. The Company SEC Reports (A) complied in all material respects as of their
respective dates with the requirements of the Securities Act or the Exchange
Act, as the case may be, and (B) did not at the time they were filed (and if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a 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
were made, not misleading. None of Company's subsidiaries is required to file
any reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Company SEC Reports was prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, do not contain
footnotes as permitted by Form 10-Q of the Exchange Act) and each fairly
presents the consolidated financial position of Company and its subsidiaries at
the respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments that were not or are not expected to be material in amount.
(c) Company has previously furnished to Parent a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC pursuant to
the Securities Act or the Exchange Act.
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14
2.8 No Undisclosed Liabilities. Neither Company nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise) of
a nature required to be disclosed on a balance sheet or in the related notes to
the consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations or financial condition of Company and its subsidiaries taken as a
whole, except (i) liabilities provided for in Company's balance sheet as of
September 30, 2000 and (ii) liabilities incurred since September 30, 2000 in the
ordinary and usual course of business, consistent with past practice, none of
which would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on Company.
2.9 Absence of Certain Changes or Events. Since September 30, 2000, there
has not been: (i) any Material Adverse Effect on Company; (ii) any declaration,
setting aside or payment of any dividend on, or other distribution (whether in
cash, stock, or property) in respect of, any of Company's or any of its
subsidiaries' capital stock, or any purchase, redemption or other acquisition by
Company of any of Company's capital stock or any other securities of Company or
its subsidiaries or any options, warrants, calls or rights to acquire any such
shares or other securities except for repurchases from employees following their
termination pursuant to the terms of their pre-existing stock option or purchase
agreements; (iii) any split, combination or reclassification of any of Company's
or any of its subsidiaries' capital stock; (iv) any granting by Company or any
of its subsidiaries of any increase in compensation or fringe benefits, except
for normal increases of cash compensation to non-officer employees in the
ordinary and usual course of business consistent with past practice, or any
payment by Company or any of its subsidiaries of any bonus, except for bonuses
made to non-officer employees in the ordinary course of business consistent with
past practice, or any granting by Company or any of its subsidiaries of any
increase in severance or termination pay or any entry by Company or any of its
subsidiaries into any currently effective employment, severance, termination or
indemnification agreement or any agreement the benefits of which are contingent
or the terms of which are materially altered upon the occurrence of a
transaction involving Company of the nature contemplated hereby; (v) entry by
Company or any of its subsidiaries into any licensing or other agreement with
regard to the acquisition or disposition of any Intellectual Property (as
defined in Section 2.19) other than licenses in the ordinary and usual course of
business, consistent with past practice, or any amendment or consent with
respect to any licensing agreement filed or required to be filed by Company with
the SEC; (vi) any material change by Company in its accounting methods,
principles or practices, except as required by concurrent changes in GAAP; or
(vii) any revaluation by Company of any of its assets, including, without
limitation, writing down the value of capitalized inventory or writing off notes
or accounts receivable or any sale of assets of the Company other than in the
ordinary and usual course of business, consistent with past practice.
2.10 Absence of Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of Company, threatened (or, to the
knowledge of Company, any governmental or regulatory investigation pending or
threatened) against Company or any of its subsidiaries or any properties or
rights of Company or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign, except for any claims, actions, suits or proceedings which seek damages
of less than $50,000, do not seek injunctive relief and do not challenge or seek
to delay the transactions contemplated by this Agreement.
2.11 Employee Benefit Plans.
(a) All employee compensation, incentive, fringe or benefit plans,
programs, policies, commitments or other arrangements (whether or not set forth
in a written document and including, without limitation, all "employee benefit
plans" within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) covering any active, former
employee, director or consultant of Company, any subsidiary of Company or any
trade or business (whether or not incorporated) which is a member of a
controlled group or which is under common control with Company within the
meaning of Section 414 of the Code (an "Affiliate"), or with respect to which
Company has or may in the future have liability, are listed in Section 2.11(a)
of the Company Schedule (the "Plans"). Company has provided to Parent: (i)
correct and complete copies of all documents embodying each Plan including
(without limitation) all amendments thereto, all related trust documents, and
all material written
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agreements and contracts relating to each such Plan; (ii) the three (3) most
recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Plan; (iii) the most recent summary plan description
together with the summary(ies) of material modifications thereto, if any,
required under ERISA with respect to each Plan; (iv) all Internal Revenue
Service ("IRS") or United States Department of Labor ("DOL") determination,
opinion, notification and advisory letters; (v) all material correspondence to
or from any governmental agency relating to any Plan; (vi) all COBRA (as defined
below) forms and related notices; (vii) all discrimination tests for each Plan
for the most recent three (3) plan years; (viii) the most recent annual
actuarial valuations, if any, prepared for each Plan; (ix) if the Plan is
funded, the most recent annual and periodic accounting of Plan assets; (x) all
material written agreements and contracts relating to each Plan, including, but
not limited to, administrative service agreements, group annuity contracts and
group insurance contracts; (xi) all material communications to employees or
former employees regarding in each case, relating to any amendments,
terminations, establishments, increases or decreases in benefits, acceleration
of payments or vesting schedules or other events which would result in any
material liability under any Plan or proposed Plan; (xii) all policies
pertaining to fiduciary liability insurance covering the fiduciaries for each
Plan; and (xiii) all registration statements, annual reports (Form 11-K and all
attachments thereto) and prospectuses prepared in connection with any Plan.
(b) Each Plan has been maintained and administered in all material respects
in compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations (foreign or domestic), including but not
limited to ERISA and the Code, which are applicable to such Plans. No suit,
action or other litigation (excluding claims for benefits incurred in the
ordinary course of Plan activities) has been brought, or to the knowledge of
Company, is threatened, against or with respect to any such Plan. There are no
audits, inquiries or proceedings pending or, to the knowledge of Company,
threatened by the IRS or DOL with respect to any Plan. All contributions,
reserves or premium payments required to be made or accrued as of the date
hereof to the Plans have been timely made or accrued. Any Plan intended to be
qualified under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code (i) has either obtained a favorable
determination notification, advisory and/or opinion letter, as applicable, as to
its qualified status from the IRS or still has a remaining period of time under
applicable Treasury Regulations or IRS pronouncements in which to apply for such
letter and to make any amendments necessary to obtain a favorable determination
and (ii) incorporates or has been amended to incorporate all provisions required
to comply with the Tax Reform Act of 1986 and subsequent legislation. Company
does not have any plan or commitment to establish any new Plan, to modify any
Plan (except to the extent required by law or to conform any such Plan to the
requirements of any applicable law, in each case as previously disclosed to
Parent in writing, or as required by this Agreement), or to enter into any new
Plan. Each Plan can be amended, terminated or otherwise discontinued after the
Effective Time in accordance with its terms, without liability to Parent,
Company or any of its Affiliates (other than ordinary administration expenses).
(c) Neither Company, any of its subsidiaries, nor any of their Affiliates
has at any time ever maintained, established, sponsored, participated in, or
contributed to any plan subject to Title IV of ERISA or Section 412 of the Code
and at no time has Company or any of its subsidiaries contributed to or been
requested to contribute to any "multiemployer plan," as such term is defined in
ERISA or to any plan described in Section 413(c) of the Code. Neither Company,
any of its subsidiaries, nor any officer or director of Company or any of its
subsidiaries is subject to any liability or penalty under Sections 4975 through
4980B of the Code or Title I of ERISA. There are no audits, inquiries or
proceedings pending or, to the knowledge of Company, threatened by the IRS or
DOL with respect to any Plan. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 408 of ERISA, has occurred with respect to any Plan.
(d) Neither Company, any of its subsidiaries, nor any of their Affiliates
has, prior to the Effective Time and in any material respect, violated any of
the health continuation requirements of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), the requirements of the Family
Medical Leave Act of 1993, as amended, the requirements of the Women's Health
and Cancer Rights
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Act, as amended, the requirements of the Newborns' and Mothers' Health
Protection Act of 1996, as amended, or any similar provisions of state law
applicable to employees of the Company or any of its subsidiaries. None of the
Plans promises or provides retiree medical or other retiree welfare benefits to
any person except as required by applicable law, and neither Company nor any of
its subsidiaries has represented, promised or contracted (whether in oral or
written form) to provide such retiree benefits to any employee, former employee,
director, consultant or other person, except to the extent required by statute.
(e) Neither Company nor any of its subsidiaries is bound by or subject to
(and none of its respective assets or properties is bound by or subject to) any
arrangement with any labor union. No employee of Company or any of its
subsidiaries is represented by any labor union or covered by any collective
bargaining agreement and, to the knowledge of Company, no campaign to establish
such representation is in progress. There is no pending or, to the knowledge of
Company, threatened labor dispute involving Company or any of its subsidiaries
and any group of its employees nor has Company or any of its subsidiaries
experienced any labor interruptions over the past three (3) years, and Company
and its subsidiaries consider their relationships with their employees to be
good. The Company and its subsidiaries are in compliance in all material
respects with all applicable material foreign, federal, state and local laws,
rules and regulations respecting employment, employment practices, terms and
conditions of employment and wages and hours.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, bonus
or otherwise) becoming due to any shareholder, director or employee of Company
or any of its subsidiaries under any Plan or otherwise, (ii) increase any
benefits otherwise payable under any Plan, or (iii) result in the acceleration
of the time of payment or vesting of any such benefits. Without limiting the
foregoing, no payment or benefit which will or may be made by the Company with
respect to any person as a result of the transactions contemplated by this
Agreement will be characterized as an "excess parachute payment," within the
meaning of Section 280G(b)(1) of the Code.
2.12 Labor Matters. (i) There are no controversies pending or, to the
knowledge of each of Company and its respective subsidiaries, threatened,
between Company or any of its subsidiaries and any of their respective
employees; (ii) as of the date of this Agreement, neither Company nor any of its
subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by Company or its subsidiaries nor
does Company or its subsidiaries have knowledge of any activities or proceedings
of any labor union to organize any such employees; and (iii) as of the date of
this Agreement, neither Company nor any of its subsidiaries has any knowledge of
any strikes, slowdowns, work stoppages or lockouts, or threats thereof, by or
with respect to any employees of Company or any of its subsidiaries. Company and
its subsidiaries are in compliance in all material respects with all applicable
material foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours.
2.13 Registration Statement; Joint Proxy Statement/Prospectus. None of the
information supplied or to be supplied by Company for inclusion or incorporation
by reference in (i) the registration statement on Form S-4 to be filed with the
SEC by Parent in connection with the issuance of the Parent Common Stock in or
as a result of the Merger (the "S-4") will, at the time the S-4 becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and (ii) the joint
proxy statement/prospectus to be filed with the SEC by Company and Parent
pursuant to Section 5.1 hereof (the "Joint Proxy Statement/ Prospectus") will,
at the dates mailed to the stockholders of Company, at the times of the
stockholders meeting of Company (the "Company Stockholders' Meeting") in
connection with the transactions contemplated hereby at the dates mailed to the
stockholders of Parent, at the times of the stockholders' meeting of Parent (the
"Parent Stockholders' Meeting") in connection with the Share Issuance and as of
the Effective Time, 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
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circumstances under which they are made, not misleading. The Joint Proxy
Statement/Prospectus will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations promulgated by the
SEC thereunder. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent or
Merger Sub which is contained in any of the foregoing documents.
2.14 Restrictions on Business Activities. There is no agreement,
commitment, judgment, injunction, order or decree binding upon Company or its
subsidiaries or to which the Company or any of its subsidiaries is a party which
has or would reasonably be expected to have the effect of prohibiting or
materially impairing any business practice material to Company or any of its
subsidiaries, any acquisition of property by Company or any of its subsidiaries
or the conduct of business by Company or any of its subsidiaries as currently
conducted.
2.15 Property. Neither Company nor any of its subsidiaries owns any
material real property. Section 2.15(a) of the Company Schedule is a complete
and accurate list of all real property leases to which Company or any of its
subsidiaries is a party and each amendment thereto. Each premises subject to a
lease is hereinafter referred to as a "Leased Property." Company has provided or
made available to Parent true, complete and correct copies of each such lease;
no term or condition of any such lease has been modified, amended or waived
except as shown in such copies; each such lease constitutes the entire agreement
of the landlord and the tenant thereunder; and there are no other agreements or
arrangements whatsoever relating to Company's use or occupancy of any of the
premises described in such leases. Company has not transferred, mortgaged or
assigned any interest in any such lease, nor has Company subleased or otherwise
granted rights of use or occupancy of any of the premises described therein to
any other person or entity. Company and each of its subsidiaries have good and
valid title to all of their material properties and assets, free and clear of
all liens, charges and encumbrances except liens for taxes not yet due and
payable, except as reflected in the financial statements contained in the
Company SEC Reports and except for such liens or other imperfections of title,
if any, as do not materially detract from the value of or interfere with the
present use of the property affected thereby; and all leases pursuant to which
Company or any of its subsidiaries lease from others material real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
material default or event of default (or any event which with notice or lapse of
time, or both, would constitute a material default and in respect of which
Company or subsidiary has not taken adequate steps to prevent such default from
occurring). All the plants, structures and equipment of Company and its
subsidiaries, except such as may be under construction, are in good operating
condition and repair, in all material respects. There is no pending or, to
Company's knowledge, threatened condemnation or similar proceeding affecting any
Leased Property or any portion thereof, and Company has no knowledge that any
such action is currently contemplated.
2.16 Taxes.
(a) For the purposes of this Agreement, "Tax" or "Taxes" refers to any and
all federal, state, local and foreign taxes, assessments and other governmental
charges, duties, impositions and liabilities relating to taxes, including taxes
based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, together with all
interest, penalties and additions imposed with respect to such amounts and any
obligations under any agreements or arrangements with any other person with
respect to such amounts and including any liability for taxes of a predecessor
entity.
(b) Company and each of its subsidiaries have timely filed, or will timely
file, all federal, state, local and foreign returns, estimates, information
statements and reports ("Returns") relating to Taxes required to be filed by
Company and each of its subsidiaries prior to the Effective Time with any Tax
authority, except such Returns which are not material to Company. Such returns
are, or will be when filed, true and
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correct in all material respects and have been or will be completed in
accordance with applicable Law, and Company and each of its subsidiaries have
paid or will pay all Taxes shown to be due on such Returns.
(i) Company and each of its subsidiaries as of the Effective Time will
have withheld with respect to its employees all federal and state income
taxes, Taxes pursuant to the Federal Insurance Contribution Act, Taxes
pursuant to the Federal Unemployment Tax Act and other Taxes required to be
withheld.
(ii) Neither Company nor any of its subsidiaries has been delinquent
in the payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Company or any of its
subsidiaries, nor has Company or any of its subsidiaries executed any
unexpired waiver or extension of any statute of limitations on or extending
the period for the assessment or collection of any Tax, nor has any such
waiver or extension been requested from the Company or any of its
subsidiaries other than an extension resulting from the filing of a Tax
Return after its due date in the ordinary course of business.
(iii) No audit or other examination of any Return of Company or any of
its subsidiaries by any Tax authority is presently in progress, nor has
Company or any of its subsidiaries been notified of any request for such an
audit or other examination.
(iv) No adjustment relating to any Returns filed by Company or any of
its subsidiaries has been proposed in writing formally or informally by any
Tax authority to Company or any of its subsidiaries or any representative
thereof.
(v) Neither Company nor any of its subsidiaries has any liability for
any material unpaid Taxes which has not been accrued for or reserved on
Company balance sheet dated September 30, 2000 in accordance with GAAP,
whether asserted or unasserted, contingent or otherwise, which is material
to Company, other than any liability for unpaid Taxes that may have accrued
since September 30, 2000 in connection with the operation of the business
of Company and its subsidiaries in the ordinary course.
(vi) There is no contract, agreement, plan or arrangement to which
Company or any of its subsidiaries is a party as of the date of this
Agreement, including but not limited to the provisions of this Agreement,
covering any employee or former employee or any director of the Company or
any of its subsidiaries that, individually or collectively, would
reasonably be expected to give rise to the payment of any amount that would
not be deductible by reason of Sections 280G, 404 or 162(m) of the Code.
There is no contract, agreement, plan or arrangement to which the Company
or any of its subsidiaries is a party or by which it is bound to compensate
any individual for excise taxes paid pursuant to Section 4999 of the Code.
(vii) Neither Company nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as defined in Section 341(f)(4) of the Code) owned by the Company or
any of its subsidiaries.
(viii) Except as between Company and its current subsidiaries, neither
Company nor any of its subsidiaries is, or has ever been, a party to or
bound by any tax indemnity agreement, tax sharing agreement, tax allocation
agreement or similar Contract (such agreements and Contracts, "Tax
Indemnity Agreements"), including any obligation arising by reason of
Treasury Regulations Section 1.1502-6, and neither Company nor any of its
subsidiaries has or, by reason of the consummation of the transactions
contemplated under this Agreement, will have any liability or obligation
under any Tax Indemnity Agreement.
(ix) No claim or action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry or investigation commenced, brought,
conducted or heard by or before, or otherwise involving, any court or other
governmental body or any arbitrator or arbitration panel is pending or, to
the Company's knowledge, has been
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threatened against or with respect to the Company or any of its
subsidiaries in respect of any material Tax.
(x) Neither the Company nor any of its subsidiaries has been or will
be required to include any material adjustment in taxable income for any
tax period (or portion thereof) pursuant to Section 481 of the Code or any
comparable provision under any Tax laws as a result of transactions or
events occurring, or accounting methods employed, prior to the Closing.
(xi) Neither the Company nor any of its subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" (as such
terms are defined in Section 355(a) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (x) in the
two years prior to the date of this Agreement, or (y) in a distribution
that could otherwise constitute part of a "plan" or "series of related
transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
2.17 Environmental Matters. Company (i) has obtained all applicable
permits, licenses and other authorizations that are required under Environmental
Laws the absence of which would have a Material Adverse Effect on Company; (ii)
is in compliance in all material respects with all material terms and conditions
of such required permits, licenses and authorizations, and also is in compliance
in all material respects with all other material limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in such laws or contained in any regulation, code, plan,
order, decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder; and (iii) as of the date hereof, has no knowledge of and
has not received notice of any event, condition, circumstance, activity,
practice, incident, action or plan that is reasonably likely to interfere with
or prevent continued compliance or that would give rise to any common law or
statutory liability, or otherwise form the basis of any Environmental Claim with
respect to Company or any person or entity whose liability for any Environmental
Claim Company has retained or assumed either contractually or by operation of
law. No Hazardous Materials are present in, on or under any properties owned,
leased or used at any time (including both land and improvements thereon) by
Company, so as to give rise to any liability or corrective or remedial
obligation under any Environmental Laws. For the purposes of this Section 2.17,
"Environmental Claim" means any notice, claim, act, cause of action or
investigation by any person alleging potential liability (including potential
liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries or penalties)
arising out of, based on or resulting from (i) the presence, or release into the
environment, of any Hazardous Materials or (ii) any violation, or alleged
violation, of any Environmental Laws. For the purposes of this Section 2.17,
"Environmental Laws" means all Federal, state, local and foreign laws and
regulations relating to pollution of the environment (including ambient air,
surface water, ground water, land surface or subsurface strata) or the
protection of human health and worker safety, including, without limitation,
laws and regulations relating to emissions, discharges, releases or threatened
releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials. "Hazardous Materials" means chemicals,
pollutants, contaminants, wastes, toxic substances, radioactive and biological
materials, asbestos-containing materials, hazardous substances, petroleum and
petroleum products or any fraction thereof, excluding, however, Hazardous
Materials contained in products typically used for office and janitorial
purposes properly and safely maintained in accordance with Environmental Laws.
2.18 Brokers. Except for fees payable to Xxxxxxxxx Xxxxxxxx Inc. pursuant
to an engagement letter dated September 7, 1999, a copy of which has been
provided to Parent, Company has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
2.19 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"Intellectual Property" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States
and foreign patents and applications therefor and all
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reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof ("Patents"); (ii) all inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing; (iii) all
copyrights, copyright registrations and applications therefor and all other
rights corresponding thereto throughout the world; (iv) all semiconductor
and semiconductor circuit designs; (v) all rights to all mask works and
reticles, mask work registrations and applications therefor; (vi) all
industrial designs and any registrations and applications therefor
throughout the world; (vii) all trade names, logos, common law trademarks
and service marks; trademark and service xxxx registrations and
applications therefor and all goodwill associated therewith throughout the
world; (viii) all databases and data collections and all rights therein
throughout the world; (ix) all computer software including all source code,
object code, firmware, development tools, files, records and data, all
media on which any of the foregoing is recorded, all Web addresses, sites
and domain names; (x) any similar, corresponding or equivalent rights to
any of the foregoing; and (xi) all documentation related to any of the
foregoing.
"Company Intellectual Property" shall mean any Intellectual Property that
is owned by or exclusively licensed to the Company or any of its
subsidiaries, including the Company Registered Intellectual Property (as
defined below). Without in any way limiting the generality of the
foregoing, Company Intellectual Property includes all Intellectual Property
owned or exclusively licensed by the Company related to the Company's
products, including without limitation all rights in any design code,
documentation, and tooling for packaging of semiconductors in connection
with all current products and products in design and development.
"Registered Intellectual Property" shall mean all United States,
international and foreign: (i) patents, patent applications (including
provisional applications); (ii) registered trademarks, applications to
register trademarks, intent-to-use applications, or other registrations or
applications related to trademarks; (iii) registered copyrights and
applications for copyright registration; (iv) any mask work registrations
and applications to register mask works; and (v) any other Company
Intellectual Property that is the subject of an application, certificate,
filing, registration or other document issued by, filed with, or recorded
by, any state, government or other public legal authority.
"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, the Company or any
of its subsidiaries.
(a) Section 2.19(a) of the Company Schedule is a complete and accurate
list of all Company Registered Intellectual Property and specifies, where
applicable, the jurisdictions in which each such item of Company Registered
Intellectual Property has been issued or registered and lists any
proceedings or actions before any court, tribunal (including the United
States Patent and Trademark Office (the "PTO") or equivalent authority
anywhere in the world) related to any of the Company Registered
Intellectual Property.
(b) No Company Intellectual Property or software products owned by, or
service offerings of, the Company or any of its subsidiaries ("Company
Products") are subject to any proceeding or outstanding decree, order,
judgment, contract, license, agreement, or stipulation materially
restricting the use, transfer, or licensing thereof by Company or any of
its subsidiaries, or which may materially adversely affect the validity,
use or enforceability of such Company Intellectual Property or Company
Product.
(c) Each material item of Company Registered Intellectual Property is
valid and subsisting, all necessary registration, maintenance and renewal
fees currently due in connection with such Company Registered Intellectual
Property have been made and all necessary documents, recordations and
certificates in connection with such Company Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or
other authorities in the United States or foreign jurisdictions, as the
case may be, for the purposes of maintaining such Company Registered
Intellectual Property.
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(d) Company owns and has good and exclusive title to, each material
item of Company Intellectual Property purported to be owned by Company free
and clear of any lien or encumbrance (excluding non-exclusive licenses and
related restrictions granted in the ordinary course). Without limiting the
foregoing: (i) Company is the exclusive owner of all trademarks and trade
names purported to be owned by Company used in connection with the
operation or conduct of the business of Company and its subsidiaries,
including the sale, distribution or provision of any services or Company
Products by Company or its subsidiaries; (ii) with respect to all
trademarks and trade names not covered by the preceding (i), Company has
all rights and licenses necessary to use such trademarks and trade names in
connection with the operation or conduct of the business of Company and its
subsidiaries, including the sale, distribution or provision of any services
of Company Products by Company or its subsidiaries; (iii) Company owns
exclusively, and has good title to, all Copyrighted works that are Company
Products or which Company or any of its subsidiaries otherwise purports to
own; and (iv) to Company's knowledge, to the extent that any Patents would
be infringed by any Company Products, Company is the exclusive owner of
such Patents.
(e) To the extent that any material technology, software or
Intellectual Property has been developed or created independently or
jointly by a third party for Company or any of its subsidiaries or is
incorporated into any of the Company Products, Company has a written or
electronic agreement with such third party with respect thereto and Company
thereby either (i) has obtained ownership of, and is the exclusive owner
of, or (ii) has obtained a license (sufficient for the conduct of its
business as currently conducted and as proposed to be conducted) to such
third party's Intellectual Property in such work, material or invention by
operation of law or by valid assignment or license, to the fullest extent
it is legally possible to do so.
(f) The Company Intellectual Property and other Intellectual Property
licensed or exploited by Company constitutes all the technology, software
and Intellectual Property Rights used in and/or necessary to the conduct of
the business of the Company as it currently is conducted and, to the
knowledge of Company, as it is currently planned or contemplated to be
conducted by the Company, including, without limitation, the design,
development, manufacture, use, import and sale of Company Products, except
for items that may reasonably be expected to be available for licensing on
reasonable terms from third parties.
(g) No person who has licensed any technology, software or
Intellectual Property Rights to the Company has ownership rights or license
rights granted by Company to improvements made by the Company in such
Technology or Intellectual Property Rights.
(h) Neither Company nor any of its subsidiaries has transferred
ownership of, or granted any exclusive license with respect to, any
Intellectual Property that is or was Company Intellectual Property, to any
third party, or permitted Company's rights in such Company Intellectual
Property to lapse or enter the public domain.
(i) Section 2.19(i) of the Company Schedule lists all material
contracts, licenses and agreements to which Company or any of its
subsidiaries is a party: (i) with respect to Company Intellectual Property
licensed or transferred to any third party (other than end-user licenses or
related support and maintenance agreements in the ordinary course); or (ii)
pursuant to which a third party has licensed or transferred any material
Intellectual Property to Company (other than with respect to standard,
generally commercially available "off the shelf" products).
(j) All contracts, licenses and agreements material to the business of
the Company as currently conducted and relating to either (i) Company
Intellectual Property or (ii) Intellectual Property of a third party
licensed to Company or any of its subsidiaries, are in full force and
effect (other than those which have expired by their terms). The
consummation of the transactions contemplated by this Agreement will
neither violate nor result in the breach, modification, cancellation,
termination or suspension of such contracts, licenses and agreements. Each
of Company and its subsidiaries is in material compliance with, and has not
materially breached any material term of any such contracts, licenses and
agreements and, to the knowledge of Company, all other parties to such
contracts,
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licenses and agreements are in compliance with, and have not materially
breached any term of, such contracts, licenses and agreements. Following
the Closing Date, the Surviving Corporation will be permitted to exercise
all of Company's rights under such contracts, licenses and agreements to
the same extent Company and its subsidiaries would have been able to had
the transactions contemplated by this Agreement not occurred and without
the payment of any additional amounts or consideration other than ongoing
fees, royalties or payments which Company would otherwise be required to
pay. Neither this Agreement nor the transactions contemplated by this
Agreement, including the assignment to Parent or Surviving Corporation by
operation of law or otherwise of any contracts or agreements to which the
Company is a party, will result in (i) either Parent's or the Surviving
Corporation's granting to any third party any right to or with respect to
any material Intellectual Property right owned by, or licensed to, either
of them (other than the rights granted in any contracts or agreements so
assigned), (ii) either the Parent's or the Surviving Corporation's being
bound by, or subject to, any non-compete or other material restriction on
the operation or scope of their respective businesses or (iii) either the
Parent's or the Surviving Corporation being obligated to pay any royalties
or other material amounts to any third party in excess of those payable by
Parent or Surviving Corporation, respectively, prior to Closing (other than
any royalties or other material amounts which Company would have otherwise
been required to pay had the transactions contemplated by this Agreement
not occurred). The foregoing sentence shall only apply with respect to
contracts of Company.
(k) The operation of the business of the Company and its subsidiaries
as such business currently is conducted or is contemplated to be conducted
by the Company or any of its subsidiaries, including without limitation (i)
Company's and its subsidiaries' design, development, manufacture,
distribution, reproduction, marketing or sale of the products or services
of Company and its subsidiaries (including Company Products) and (ii) the
Company's use of any product, device or process, has not, does not, and
will not when conducted by Parent and/or Surviving Corporation in
substantially the same manner following the Closing, infringe or
misappropriate, to the knowledge of Company with respect to patents,
trademarks, service marks and trade names only, the Intellectual Property
of any third party or constitute unfair competition or trade practices
under the laws of any jurisdiction.
(l) Neither Company nor any of its subsidiaries has received notice
from any third party that the operation of the business of Company or any
of its subsidiaries or any act, product or service of Company or any of its
subsidiaries, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the
laws of any jurisdiction.
(m) To the knowledge of Company, there are no material contracts,
licenses or agreements between the Company and any other person with
respect to Company Intellectual Property under which there is any material
dispute regarding the scope of such agreement, or performance under such
agreement, including with respect to any payments to be made or received by
the Company thereunder.
(n) To the knowledge of Company, no person has or is infringing or
misappropriating any Company Intellectual Property.
(o) Company and each of its subsidiaries has taken reasonable steps to
protect Company's and its subsidiaries' rights in Company's confidential
information and trade secrets that it wishes to protect or any trade
secrets or confidential information of third parties provided to Company or
any of its subsidiaries under an obligation of confidentiality, and,
without limiting the foregoing, each of Company and its subsidiaries has
and enforces a policy requiring each employee and contractor to execute a
proprietary information/confidentiality agreement substantially in the form
provided to Parent and all current and former employees, contractors and
consultants of Company and any of its subsidiaries have executed such an
agreement.
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2.20 Agreements, Contracts and Commitments. Neither Company nor any of its
subsidiaries is a party to or is bound by:
(a) any employment or consulting agreement, contract or commitment
with any officer or director or higher level employee or member of
Company's Board of Directors, other than those that are terminable by
Company or any of its subsidiaries on no more than thirty (30) days' notice
without liability or financial obligation to the Company;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement;
(c) any agreement of indemnification or any guaranty other than any
agreement of indemnification entered into in connection with the sale or
license or purchase of products or services in the ordinary course of
business;
(d) any agreement, contract or commitment containing any covenant
limiting in any material respect the right of Company or any of its
subsidiaries to engage in any line of business or to compete with any
person or granting any exclusive distribution rights;
(e) any agreement, contract or commitment currently in force relating
to the disposition or acquisition by Company or any of its subsidiaries
after the date of this Agreement of a material amount of assets not in the
ordinary course of business or pursuant to which Company or any of its
subsidiaries has any material ownership interest in any corporation,
partnership, joint venture or other business enterprise other than
Company's subsidiaries;
(f) any dealer, distributor, joint marketing or development agreement
currently in force under which Company or any of its subsidiaries have
continuing material obligations to jointly market any product, technology
or service and which may not be canceled without penalty upon notice of
ninety (90) days or less, or any material agreement pursuant to which
Company or any of its subsidiaries have continuing material obligations to
jointly develop any intellectual property that will not be owned, in whole
or in part, by Company or any of its subsidiaries and which may not be
canceled without penalty upon notice of ninety (90) days or less;
(g) any agreement, contract or commitment currently in force to
provide source code to any third party for any product or technology that
is material to Company and its subsidiaries taken as a whole;
(h) any material agreement, contract or commitment, other than
standard end-user license agreements and related maintenance and support
agreements entered into in the ordinary course of business, currently in
force to license any third party to manufacture or reproduce any Company
product, service or technology or any material agreement, contract or
commitment currently in force to sell or distribute any Company products,
service or technology except agreements with distributors or sales
representative in the normal course of business cancelable without penalty
upon notice of ninety (90) days or less and substantially in the form
previously provided to Parent;
(i) any mortgages, leases, indentures, guarantees, loans or credit
agreements, security agreements or other agreements or instruments relating
to the borrowing of money or extension of credit;
(j) any settlement agreement entered into within five (5) years prior
to the date of this Agreement; or
(k) any other agreement, contract or commitment that has a value of
$250,000 or more individually.
Neither Company nor any of its subsidiaries, nor to Company's knowledge any
other party to a Company Contract (as defined below), is in breach, violation or
default under, and neither Company nor
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any of its subsidiaries has received written notice that it has breached,
violated or defaulted under, any of the material terms or conditions of any of
the agreements, contracts or commitments to which Company or any of its
subsidiaries is a party or by which it is bound that are required to be
disclosed in the Company Schedule (any such agreement, contract or commitment, a
"Company Contract") in such a manner as would permit any other party to cancel
or terminate any such Company Contract, or would reasonably be expected, either
individually or in the aggregate, to result in a Material Adverse Effect on
Company.
2.21 Insurance. Company has provided or made available to Parent true,
correct and complete copies of all insurance policies and fidelity bonds to
which each of Company and its subsidiaries are a party or a beneficiary or named
insured, which are of the type and in amounts the Company believes are
appropriate for its business. There is no claim by Company or any of its
subsidiaries pending under any of the insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of Company and its subsidiaries as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds.
2.22 Opinion of Financial Advisor. Company has been advised in writing by
its financial advisor, Xxxxxxxxx Xxxxxxxx Inc., that in its opinion, as of the
date of this Agreement, the Exchange Ratio is fair to the stockholders of
Company from a financial point of view.
2.23 Board Approval. The Board of Directors of Company has, as of the date
of this Agreement, unanimously (except for director Xxxxx Xxxx who has recused
himself from substantive discussions and votes taken by the Board of Directors
of Company with respect to the transactions contemplated by this Agreement) (i)
approved and declared advisable this Agreement and has approved the Merger and
the other transactions contemplated hereby, (ii) determined that the Merger is
consistent with and in furtherance of the long-term business strategy of Company
and fair to, and in the best interests of, Company and its stockholders and
(iii) determined to recommended that the stockholders of Company adopt and
approve this Agreement and approve the Merger.
2.24 Vote Required. The affirmative vote of a majority of the votes that
holders of the outstanding shares of Company Common Stock are entitled to vote
with respect to the Merger is the only vote of the holders of any class or
series of Company's capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
2.25 State Takeover Statutes. The Board of Directors of the Company has
approved the Merger, the Merger Agreement, the Company Voting Agreements, the
Option Agreement and the transactions contemplated hereby and thereby, and such
approval is sufficient to render inapplicable to the Merger, the Merger
Agreement, the Company Voting Agreements, the Option Agreement and the
transactions contemplated hereby and thereby the provisions of Section 203 of
the Delaware Law to the extent, if any, such section is applicable to the
Merger, the Merger Agreement, the Company Voting Agreements, the Option
Agreement and the transactions contemplated hereby and thereby. No other state
takeover statute or similar statute or regulation applies to or purports to
apply to the Merger, the Merger Agreement, the Company Voting Agreements, the
Option Agreement or the transactions contemplated hereby and thereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
Company, subject to such exceptions as are specifically disclosed in writing in
the disclosure letter and schedules thereto (each such exception referencing the
specific section number of this Article III to which it applies and each other
section number of this Article III to the extent such applicability is
reasonably apparent on the face of such exception), dated as of the date hereof
(the "Parent Schedule"), as follows:
3.1 Organization and Qualification; Subsidiaries. Each of Parent and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
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and has the requisite corporate power and authority to own, lease and operate
its assets and properties and to carry on its business as it is now being
conducted, except where the failure to do so would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect on Parent.
Each of Parent and its subsidiaries is in possession of all Approvals necessary
to own, lease and operate the properties it purports to own, operate or lease
and to carry on its business as it is now being conducted, except where the
failure to have such Approvals would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect on Parent. Each of Parent
and its subsidiaries is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would
not, either individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect on Parent.
3.2 Certificate of Incorporation and Bylaws. Parent has previously
furnished to Company complete and correct copies of its Certificate of
Incorporation and Bylaws as amended to date (together, the "Parent Charter
Documents"). Such Parent Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Parent is
not in violation of any of the provisions of the Parent Charter Documents, and
no subsidiary of Parent is in violation of any of its equivalent organizational
documents.
3.3 Capitalization.
(a) The authorized capital stock of Parent consists of (i) 100,000,000
shares of Parent Common Stock, par value $0.001 per share, and (ii) 5,000,000
shares of Preferred Stock, par value $0.001 per share (the "Parent Preferred
Stock").
(b) At the close of business on January 22, 2001, (i) 26,924,099 shares of
Parent Common Stock were issued and outstanding, all of which are duly
authorized, validly issued, fully paid and non-assessable; (ii) no shares of
Parent Common Stock are held in the treasury of Parent or by its subsidiaries;
(iii) 4,585,707 shares of Parent Common Stock were reserved for issuance upon
the exercise of outstanding options to purchase Parent Common Stock under the
Parent's 1986 Stock Option Plan, 1995 Long-Term Incentive Plan, 1994 Director
Option Plan, 1993 Employee Stock Purchase Plan and 1999 Nonstatutory Stock
Option Plan; (iv) 363,421 shares of Parent Common Stock were reserved for
issuance upon the exercise of outstanding warrants to purchase Parent Common
Stock. As of the date hereof, no shares of Parent Preferred Stock were issued or
outstanding. Except as set forth in this Section 3.3(b), there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Parent or any of its
subsidiaries is a party or by which it is bound obligating Parent or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, any shares of capital stock, partnership interests or similar ownership
interests of Parent or any of its subsidiaries or obligating Parent or any of
its subsidiaries to grant, extend, or enter into any such subscription, option,
warrant, equity security, call, right, commitment or agreement.
(c) The authorized stock of Merger Sub consists of 1,000 shares of common
stock, par value $0.001 per share, all of which are duly authorized, validly
issued, fully paid and nonassessable and free of any preemptive rights in
respect thereof, and all of which are owned by Parent.
3.4 Parent Common Stock. The Parent Common Stock to be issued pursuant to
the Merger has been duly authorized and will, when issued in accordance with
this Agreement be validly issued, fully paid, and unassessable and will not be
subject to any restrictions on resale under the Securities Act, other than
restrictions imposed by Rule 145 under the Securities Act.
3.5 Authority Relative to this Agreement. Each of Parent and Merger Sub
has all necessary corporate power and authority to execute and deliver this
Agreement and, in the case of Parent, the Option Agreement and, subject to
obtaining the approval of the stockholders of Parent of the Share Issuance, to
perform its obligations hereunder and thereunder and to consummate the
transactions
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contemplated hereby and thereby. The execution and delivery of this Agreement by
Parent and Merger Sub and of the Option Agreement by Parent and the consummation
by Parent and Merger Sub of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary corporate action on the
part of Parent and Merger Sub, and no other corporate proceedings on the part of
Parent or Merger Sub are necessary to authorize this Agreement or on the part of
Parent to authorize the Option Agreement, or to consummate the transactions so
contemplated, subject only to the approval of the Share Issuance by Parent's
stockholders and the filing and recordation of the Certificate of Merger as
required by Delaware Law. Each of this Agreement and the Option Agreement has
been duly and validly executed and delivered by Parent and, in the case of this
Agreement, Merger Sub and, assuming the due authorization, execution and
delivery by Company, constitute legal and binding obligations of Parent and, in
the case of this Agreement, Merger Sub, enforceable against Parent and Merger
Sub in accordance with their respective terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
3.6 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and the Option Agreement
by each of Parent and Merger Sub do not, and the performance of this Agreement
and the Option Agreement by each of Parent and Merger Sub will not, (i) conflict
with or violate the Parent Charter Documents or the equivalent organizational
documents of any of Parent's subsidiaries; (ii) subject to obtaining the
approval of Parent's stockholders of the Share Issuance and compliance with the
requirements set forth in Section 3.6(b) below, conflict with, or result in any
violation of, any law, rule, regulation, order, judgment or decree applicable to
Parent or any of its subsidiaries or by which either Parent or any of its
subsidiaries or any of their respective properties is bound or affected; or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or impair
Parent's or any of its subsidiaries' rights or alter the rights or obligations
of any third party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a
material lien or encumbrance on any of the properties or assets of Parent or any
of its subsidiaries pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which
Parent or any of its subsidiaries or its or any of their respective properties
are bound or affected.
(b) The execution and delivery of this Agreement and the Option Agreement
by each of Parent and Merger Sub do not, and the performance of this Agreement
by each of Parent and Merger Sub will not, require any consent, waiver,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity, except (A) for applicable requirements, if any, of the
Securities Act, the Exchange Act, Blue Sky Laws, HSR Approval, the rules and
regulations of Nasdaq, state takeover laws and the filing and recordation of the
Certificate of Merger as required by Delaware Law and (B) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not reasonably be expected to have a Material
Adverse Effect on Parent or a material adverse effect on the ability of Parent
or Merger Sub to perform their respective obligations under this Agreement.
3.7 SEC Filings; Financial Statements.
(a) Parent has made available to Company a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Parent with the SEC on or after December 31, 1999 (the "Parent SEC
Reports"), which are all the forms, reports and documents required to be filed
by Parent with the SEC since December 31, 1999. The Parent SEC Reports (A)
complied in all material respects as of their respective dates with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
(B) did not at the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Parent's
subsidiaries is required to file any reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the Parent SEC Reports was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited statements, do not contain footnotes as permitted by Form 10-Q of the
Exchange Act) and each fairly presents the consolidated financial position of
Parent and its subsidiaries at the respective dates thereof and the consolidated
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments that were not or are not expected to be material
in amount.
(c) Parent has previously furnished to Company a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Parent with the SEC pursuant to
the Securities Act or the Exchange Act.
3.8 No Undisclosed Liabilities. Neither Parent nor any of its subsidiaries
has any liabilities (absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or in the related notes to the
consolidated financial statements prepared in accordance with GAAP which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Parent and its subsidiaries taken as a
whole, except (i) liabilities provided for in Parent's balance sheet as of
September 30, 2000, and (ii) liabilities incurred since September 30, 2000 in
the ordinary and usual course of business, consistent with past practice, none
of which would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on Parent.
3.9 Absence of Certain Changes or Events. Since September 30, 2000, there
has not been: (i) any Material Adverse Effect on Parent; (ii) any declaration,
setting aside or payment of any dividend on, or other distribution (whether in
cash, stock or property) in respect of, any of Parent's or any of its
subsidiaries' capital stock, or any purchase, redemption or other acquisition by
Parent of any of Parent's capital stock or any other securities of Parent or its
subsidiaries or any options, warrants, calls or rights to acquire any such
shares or other securities except for repurchases from employees following their
termination pursuant to the terms of their pre-existing stock option or purchase
agreements; (iii) any split, combination or reclassification of any of Parent's
or any of its subsidiaries' capital stock; (iv) any material change by Parent in
its accounting methods, principles or practices, except as required by
concurrent changes in GAAP; or (v) any revaluation by Parent of any of its
assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable or any sale of assets of
the Parent other than in the ordinary course of business.
3.10 Absence of Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of Parent, threatened (or, to the
knowledge of Parent, any governmental or regulatory investigation pending or
threatened) against Parent or any of its subsidiaries or any properties or
rights of Parent or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign, except for any claims, actions, suits or proceedings which seek damages
of less than $50,000, do not seek injunctive relief and do not challenge or seek
to delay the transactions contemplated by this Agreement.
3.11 Registration Statement; Joint Proxy Statement/Prospectus. None of the
information supplied or to be supplied by Parent for inclusion or incorporation
by reference in (i) the S-4 will, at the time the S-4 becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading; and (ii) the Joint Proxy Statement/Prospectus will, at the
dates mailed to the stockholders of Company and of Parent, at the time of the
Company Stockholders' Meeting, the time of the Parent Stockholders' Meeting and
as of the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required
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to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The S-4
will comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations promulgated by the SEC thereunder.
Notwithstanding the foregoing, Parent makes no representation or warranty with
respect to any information supplied by the Company which is contained in any of
the foregoing documents.
3.12 Operations of Merger Sub. Merger Sub is a direct, wholly owned
subsidiary of Parent, was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement, has engaged in no other business
activities and has conducted its operations only as contemplated by this
Agreement.
3.13 Brokers. Except for fees payable to UBS Warburg LLC, Parent has not
incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby.
3.14 Intellectual Property. Parent owns each of the patents and patent
applications referred to in Parent SEC Reports and, except as set forth in the
Parent SEC Reports, (i) to the knowledge of Parent, Parent owns or possesses, or
could obtain ownership or possession of (on terms not materially adverse to the
consolidated financial position, stockholders' equity, or results of operations
of Parent) adequate and enforceable rights to use all other Intellectual
Property necessary for the conduct of its business, (ii) no claims are pending
or, to the knowledge of Parent, threatened that Parent is infringing on or
otherwise violating the rights of any person with regard to any Intellectual
Property that, if the subject of an unfavorable decision, ruling or finding,
could reasonably be expected to have a Material Adverse Effect and Parent knows
of no basis therefor, and (iii) to the knowledge of Parent, no person is
infringing on or otherwise violating any right of Parent with respect to any
Intellectual Property owned by or licensed to Parent.
3.15 Opinion of Financial Advisor. Parent's Board of Directors has
received an opinion from UBS Warburg LLC, dated as of the date hereof to the
effect that as of the date hereof the Exchange Ratio is fair to Parent from a
financial point of view.
3.16 Board Approval. The Board of Directors of Parent has, as of the date
of this Agreement, (i) has determined that the Merger is consistent with and in
furtherance of the long-term business strategy of Parent and is fair to, and in
the best interests of, Parent and its stockholders; (ii) has approved this
Agreement, the Merger and the other transactions contemplated by this Agreement;
and (iii) has determined to recommend that the stockholders of Parent approve
the Share Issuance.
3.17 Vote Required. The affirmative vote of a majority of the shares of
Parent Common Stock that cast votes regarding the Share Issuance in person or by
proxy at the Parent Stockholders' Meeting is the only vote of the holders of any
class or series of Parent's capital stock necessary to approve this Agreement
and the transactions contemplated hereby.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Company. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Company and each of its
subsidiaries shall, except (i) as set forth in Section 4.1 of the Company
Schedule, (ii) in connection with specific actions that Company is explicitly
required to take pursuant to this Agreement or (iii) to the extent that Parent
shall otherwise consent in writing (which consent shall not be unreasonably
delayed), carry on its business, in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance with all
applicable laws and regulations, pay its debts and taxes when due subject to
good faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its commercially reasonable efforts consistent
with past practices and policies to (i) preserve intact its present business
organization, (ii) keep available the
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services of its present officers and employees and (iii) preserve its
relationships with customers, suppliers, distributors, licensors, licensees, and
others with which it has business dealings.
In addition, except (i) in connection with specific actions that Company is
explicitly required to take pursuant to this Agreement, (ii) as set forth in
Section 4.1 of the Company Schedule or (iii) to the extent that Parent shall
otherwise consent in writing (which consent shall not be unreasonably delayed),
during the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Company shall not do any of the following and shall not permit
its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of
such plans;
(b) Grant any severance or termination pay (cash, equity or otherwise)
to any officer or employee, except (x) pursuant to written agreements
outstanding, or policies existing, on the date hereof and (y) as previously
disclosed in writing to Parent in the Company Schedule, or adopt any new
severance plan;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify any rights to the Company Intellectual Property that are
material to the business of Company as currently conducted, or enter into
grants to transfer or license to any person future patent rights other than
in the ordinary course of business consistent with past practices, provided
that in no event shall Company license on an exclusive basis or sell any
Company Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock or split, combine or reclassify any capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Company or its subsidiaries, except repurchases
of unvested shares at cost in connection with the termination of the
employment relationship with any employee pursuant to stock option or
purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or
propose any of the foregoing with respect to, any shares of capital stock
or any securities convertible into shares of capital stock, or
subscriptions, rights, warrants or options to acquire any shares of capital
stock or any securities convertible into shares of capital stock, or enter
into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than (x) the
issuance, delivery and/or sale of shares of Company Common Stock pursuant
to the exercise of stock options outstanding as of the date of this
Agreement or granted pursuant to clause (y) hereof, and (y) the granting of
stock options, in the ordinary course of business and consistent with past
practices, to newly hired employees in an amount not to exceed options to
purchase 100,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter
Documents (or similar governing instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a 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 or enter into any joint ventures, strategic
partnerships or alliances in any case for any amount in excess of $250,000;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets except sales of inventory in the ordinary course of
business consistent with past practice, except for the sale, lease or
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disposition (other than through licensing) of property or assets which are
not material, individually or in the aggregate, to the business of Company
and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of
Company, enter into any "keep well" or other agreement to maintain any
financial statement condition or enter into any arrangement having the
economic effect of any of the foregoing other than in connection with the
financing of ordinary course trade payables consistent with past practice;
(k) Adopt or amend any employee benefit plan, policy or arrangement,
any employee stock purchase or employee stock option plan, or enter into
any employment contract or collective bargaining agreement (other than
offer letters and letter agreements entered into in the ordinary course of
business consistent with past practice with employees who are terminable
"at will"), pay any special bonus or special remuneration (cash, equity or
otherwise) to any director or employee (other than payments to non-officer
employees in accordance with past practice), or increase the salaries or
wage rates or fringe benefits (including rights to severance or
indemnification) of its directors, officers, employees or consultants
(other than increases for non-officer employees or consultants in
accordance with past practice);
(l)(i) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), or litigation (whether or not commenced prior to the date of
this Agreement) other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, or liabilities recognized or
disclosed in the most recent consolidated financial statements (or the
notes thereto) of Company included in the Company SEC Reports or incurred
since the date of such financial statements, or (ii) waive the benefits of,
agree to modify in any manner, terminate, release any person from or fail
to enforce any confidentiality or similar agreement to which Company or any
of its subsidiaries is a party or of which Company or any of its
subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the
ordinary course of business (including payments to financial, legal,
accounting or other professional service advisors, other than reasonable
payments to such professional service advisors in connection with the
Merger and the transactions contemplated thereby) in excess of $200,000;
(n) Except in the ordinary course of business consistent with past
practice, modify, amend or terminate any material contract or agreement to
which Company or any subsidiary thereof is a party or waive, delay the
exercise of, release or assign any material rights or claims thereunder;
(o) Except in the ordinary course of business consistent with past
practice, enter into any material contracts, agreements, or obligations
relating to the distribution, sale, license or marketing by third parties
of Company's products or products licensed by Company;
(p) Revalue any of its assets or, except as required by GAAP, make any
change in accounting methods, principles or practices;
(q) Incur or enter into any agreement, contract or commitment outside
of the ordinary course of business in excess of $250,000 individually;
(r) Intentionally take any action that could reasonably be expected to
cause the Merger to fail to qualify as a "reorganization" under Section
368(a) of the Code, whether or not otherwise permitted by the provisions of
this Article IV, or fail to take any action reasonably necessary to cause
the Merger to so qualify;
(s) Make any tax election that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the tax
liability or tax attributes of Company or any of its subsidiaries or settle
or compromise any material income tax liability;
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(t) Make any loan, advance or capital contribution to or investment in
any person (other than a subsidiary of Company) other than in the ordinary
course of business consistent with past practice, but in no event in the
amount (to persons other than subsidiaries) of more than $100,000 in the
aggregate, and other than investments in cash equivalents made in the
ordinary course of business consistent with past practice;
(u) Modify or amend in any manner that is adverse to Company, or
terminate, any confidentiality agreement entered into by Company or any
subsidiary in the ordinary course of business, or release or waive any
material rights for claims, or modify or amend in any manner adverse to
Company, any confidentiality, standstill or similar agreements to which
Company or any of its subsidiaries is a party;
(v) Engage in any action with the intent to directly or indirectly
adversely impact any of the transactions contemplated by this Agreement;
(w) Agree in writing or otherwise to take any of the actions described
in Section 4.1(a) through (v) above.
4.2 Conduct of Business by Parent. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Parent shall not do any of the
following, except to the extent that Company shall otherwise consent in writing
(which consent shall not be unreasonably withheld or delayed), and shall not
permit its subsidiaries to do any of the following:
(a) Intentionally take any action that could reasonably be expected to
cause the Merger to fail to qualify as a "reorganization" under Section
368(a) of the Code, whether or not otherwise permitted by the provisions of
this Article IV or fail to take any action reasonably necessary to cause
the Merger to so qualify;
(b) Declare, set aside or pay any dividends on or make any other
distributions in cash or property in respect of any capital stock;
(c) Cause, permit or propose any amendments to the Parent Charter
Documents (or similar governing instruments of any of its subsidiaries),
except as contemplated by this Agreement, that would have an adverse effect
on the rights of the holders of Parent Common Stock (including the Parent
Common Stock to be issued in the Merger);
(d) Revalue any of its assets or, except as required by GAAP, make any
changes in accounting methods, principles or practices;
(e) Agree in writing or otherwise to take any of the actions described
in Section 4.2(a) through (d) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Joint Proxy Statement/Prospectus; Registration Statement.
(a) As promptly as practicable after the execution of this Agreement,
Parent and Company shall jointly prepare and shall file with the SEC a document
or documents that will constitute (i) the prospectus forming part of the
registration statement on the S-4 and (ii) the Joint Proxy Statement/
Prospectus. Each of the parties hereto shall use all reasonable efforts to cause
the S-4 to become effective as promptly as practicable after the date hereof,
and, prior to the effective date of the S-4, the parties hereto shall take all
action required under any applicable Laws in connection with the issuance of
shares of Parent Common Stock pursuant to the Merger. Parent or Company, as the
case may be, shall furnish all information concerning Parent or Company as the
other party may reasonably request in connection with such actions and the
preparation of the S-4 and the Joint Proxy Statement/Prospectus. As promptly as
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practicable after the effective date of the S-4, the Joint Proxy
Statement/Prospectus shall be mailed to the stockholders of Company and of
Parent. Each of the parties hereto shall cause the Joint Proxy Statement/
Prospectus to comply as to form and substance to such party in all material
respects with the applicable requirements of (i) the Exchange Act, (ii) the
Securities Act, and (iii) the rules and regulations of the Nasdaq. If at any
time prior to the Effective Time, any event relating to Parent or Company or any
of their respective affiliates, officers or directors should be discovered by
Parent or Company, as the case may be, which should be set forth in an amendment
to the S-4 or a supplement to the Joint Proxy Statement/ Prospectus, Parent or
Company, as the case may be, shall promptly inform the other.
(b) The Joint Proxy Statement/Prospectus shall include (i) the approval of
this Agreement and the Merger and the recommendation of the Board of Directors
of Company to Company's stockholders that they vote in favor of approval of this
Agreement and the Merger, subject to the right of the Board of Directors of the
Company to withdraw its recommendation and recommend a Superior Proposal
determined to be such in compliance with Section 5.4 of this Agreement and (ii)
the opinion of Xxxxxxxxx Xxxxxxxx Inc. referred to in Section 2.22; provided,
however, that the Board of Directors of Company shall submit this Agreement to
Company's stockholders whether or not at any time subsequent to the date hereof
such board determines that it can no longer make such recommendation. The Joint
Proxy Statement/Prospectus shall also include (i) the approval of the Share
Issuance and the recommendation of the Board of Directors of Parent to Parent's
stockholders that they vote in favor of approval of the Share Issuance and (ii)
the opinion of UBS Warburg LLC referred to in Section 3.8.
(c) No amendment or supplement to the Joint Proxy Statement/Prospectus or
the S-4 shall be made without the approval of Parent and Company, which approval
shall not be unreasonably withheld or delayed. Each of the parties hereto shall
advise the other parties hereto, promptly after it receives notice thereof, of
the time when the S-4 has become effective or any supplement or amendment has
been filed, of the issuance of any stop order, of the suspension of the
qualification of the Parent Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or of any request by the SEC for
amendment of the Joint Proxy Statement/Prospectus or the S-4 or comments thereon
and responses thereto or requests by the SEC for additional information.
5.2 Stockholder Meetings. Company shall call and hold the Company
Stockholders' Meeting and Parent shall call and hold the Parent Stockholders'
Meeting as promptly as practicable after the date hereof for the purpose of
voting upon the approval of this Agreement and the Merger or the Share Issuance,
as the case may be, pursuant to the Joint Proxy Statement/Prospectus, and Parent
and Company shall use all reasonable efforts to hold the Parent Stockholders'
Meeting and the Company Stockholders' Meeting on the same day and as soon as
practicable after the date on which the S-4 becomes effective. Nothing herein
shall prevent Company or Parent from adjourning or postponing the Company
Stockholders' Meeting or the Parent Stockholders' Meeting, as the case may be,
if there are insufficient shares of Company Common Stock or Parent Common Stock,
as the case may be, necessary to conduct business at their respective meetings
of the stockholders. Unless Company's Board of Directors has withdrawn its
recommendation of this Agreement and the Merger in compliance with Section 5.4,
Company shall use all reasonable best efforts to solicit from its stockholders
proxies in favor of the approval of this Agreement and the Merger pursuant to
the Joint Proxy Statement/Prospectus and shall take all other action necessary
or advisable to secure the vote or consent of stockholders required by Delaware
Law or applicable stock exchange requirements to obtain such approval. Parent
shall use all reasonable best efforts to solicit from its stockholders proxies
in favor of the Share Issuance pursuant to the Joint Proxy Statement/Prospectus
and shall take all other action necessary or advisable to secure the vote or
consent of stockholders required by the Delaware Law or applicable stock
exchange requirements to obtain such approval. Company shall call and hold the
Company Stockholders' Meeting for the purpose of voting upon the approval of
this Agreement and the Merger whether or not Company's Board of Directors at any
time subsequent to the date hereof determines that this Agreement is no longer
advisable or recommends that Company's stockholders reject it.
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5.3 Confidentiality; Access to Information.
(a) The parties acknowledge that Company and Parent have previously
executed a Confidentiality Agreement, dated as of December 27, 2000 (the
"Confidentiality Agreement"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms.
(b) Each of the Company and Parent will afford the other and the other's
accountants, counsel and other representatives reasonable access to its
properties, books, records and personnel during the period prior to the
Effective Time to obtain all information concerning its business as such other
party may reasonably request. No information or knowledge obtained in any
investigation pursuant to this Section 5.3 will affect or be deemed to modify
any representation or warranty contained herein or the conditions to the
obligations of the parties to consummate the Merger.
5.4 No Solicitation.
(a) From and after the date of this Agreement until the Effective Time or
termination of this Agreement pursuant to Article VII, Company and its
subsidiaries will not, nor will they authorize or permit any of their respective
officers, directors, controlled affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them to,
directly or indirectly, (i) solicit, initiate, induce or knowingly encourage the
making, submission or announcement of any Acquisition Proposal (as defined
below), (ii) participate in any discussions or negotiations with a third party
regarding, or furnish to any person any information with respect to, or take any
other action to knowingly facilitate any inquiries or the making of any proposal
that constitutes or may reasonably be expected to lead to, any Acquisition
Proposal, (iii) engage in discussions with any person with respect to any
Acquisition Proposal, (iv) approve, endorse or recommend any Acquisition
Proposal or (v) enter into any letter of intent or similar document or any
contract, agreement or commitment contemplating or otherwise relating to any
Acquisition Transaction (as defined below); provided, however, that nothing
contained in this Section 5.4 shall prohibit the Board of Directors of Company
from (i) complying with Rule 14d-9 or 14e-2(a) promulgated under the Exchange
Act or (ii) in response to an unsolicited, bona fide written Acquisition
Proposal that Company's Board of Directors reasonably concludes constitutes a
Superior Proposal (as defined below), engaging in discussions or participating
in negotiations with and furnishing information to the party making such
Acquisition Proposal and approving, endorsing or recommending such Acquisition
Proposal and withdrawing its recommendation of this Agreement and the Merger to
the extent (A) the Board of Directors of Company determines in good faith after
consultation with its outside legal counsel (who may be Company's independent
legal counsel acting with respect to this Agreement) its fiduciary obligations
under applicable law require it to do so, (B) (x) at least three (3) (which
shall include at least two (2) business days) days prior to furnishing any such
nonpublic information to, or entering into discussions or negotiations with,
such party, Company gives Parent written notice of Company's intention to
furnish nonpublic information to, or enter into discussions or negotiations
with, such party and (y) Company receives from such party an executed
confidentiality agreement containing customary limitations on the use and
disclosure of all nonpublic written and oral information furnished to such party
by or on behalf of Company, and (C) contemporaneously with furnishing any such
nonpublic information to such party, Company furnishes such nonpublic
information to Parent (to the extent such nonpublic information has not been
previously furnished by the Company to Parent). Company and its subsidiaries
will immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in this Section 5.4 by any officer,
director, controlled affiliate or employee of Company or any of its subsidiaries
or any investment banker, attorney or other advisor or representative of Company
or any of its subsidiaries shall be deemed to be a breach of this Section 5.4 by
Company.
For purposes of this Agreement, (A) "Acquisition Proposal" shall mean any
offer or proposal (other than an offer or proposal by Parent) relating to any
Acquisition Transaction. For the purposes of this Agreement; (B) "Acquisition
Transaction" shall mean any transaction or series of related transactions other
than the transactions contemplated by this Agreement involving: (1) any
acquisition or
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purchase from the Company by any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) of more than
a 15% interest in the total outstanding voting securities of the Company or any
of its subsidiaries or any tender offer or exchange offer that if consummated
would result in any person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) beneficially owning 15%
or more of the total outstanding voting securities of the Company or any of its
subsidiaries or any merger, consolidation, business combination or similar
transaction involving the Company pursuant to which the stockholders of the
Company immediately preceding such transaction hold less than 85% of the equity
interests in the surviving or resulting entity of such transaction; (2) any
sale, lease (other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than 15% of the assets of the Company; or (3) any
liquidation, dissolution, recapitalization or other significant corporate
reorganization of the Company; and (C) "Superior Proposal" shall mean an
Acquisition Proposal with respect to which (x) Company's Board of Directors
shall have reasonably determined (based upon the advice of Company's independent
financial advisors) that the acquiring party is capable of consummating
(including, if relevant, obtaining any necessary financing) the proposed
Acquisition Transaction on the terms proposed, and (y) Company's Board of
Directors shall have reasonably determined that the proposed Acquisition
Transaction provides greater value to the stockholders of Company than the
Merger (based upon the advice of Company's independent financial advisors).
(b) In addition to the obligations of Company set forth in paragraph (a) of
this Section 5.4, Company as promptly as practicable, and in any event within
one (1) business day, shall advise Parent orally and in writing of any request
for information which Company reasonably believes would lead to an Acquisition
Proposal or of any Acquisition Proposal, or any inquiry with respect to or which
Company reasonably should believe would lead to any Acquisition Proposal, the
material terms and conditions of such request, Acquisition Proposal or inquiry,
and the identity of the person or group making any such request, Acquisition
Proposal or inquiry. Company will keep Parent informed in all material respects
of the status and details (including material amendments or proposed amendments)
of any such request, Acquisition Proposal or inquiry. In addition to the
foregoing, Company shall (i) provide Parent with at least one (1) business day
prior notice (or such lesser prior notice as provided to the members of
Company's Board of Directors but in no event less than eight (8) hours) of any
meeting of Company's Board of Directors at which Company's Board of Directors is
reasonably expected to consider an Acquisition Proposal and (ii) provide Parent
with at least two (2) business days prior written notice of a meeting of
Company's Board of Directors at which Company's Board of Directors is reasonably
expected to recommend a Superior Proposal to its stockholders and together with
such notice a copy of the definitive documentation relating to such Superior
Proposal.
5.5 Public Disclosure. Parent and Company will consult with each other and
agree before issuing any press release or otherwise making any public statement
with respect to the Merger, this Agreement or an Acquisition Proposal and will
not issue any such press release or make any such public statement prior to such
agreement, except as may be required by law or any listing agreement with a
national securities exchange, in which case reasonable efforts to consult with
the other party will be made prior to any such release or public statement. The
parties have agreed to the text of the joint press release announcing the
signing of this Agreement.
5.6 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use commercially reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including using commercially reasonable efforts to accomplish the
following: (i) the taking of all reasonable acts necessary to cause the
conditions precedent set forth in Article VI to be satisfied, (ii) the obtaining
of all necessary actions or nonactions, waivers, consents, approvals, orders and
authorizations from Governmental Entities and the making of all necessary
registrations, declarations and filings (including registrations, declarations
and filings with Governmental
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Entities, if any) and the taking of all reasonable steps as may be necessary to
avoid any suit, claim, action, investigation or proceeding by any Governmental
Entity, (iii) the obtaining of all necessary consents, approvals or waivers from
third parties, (iv) the defending of any suits, claims, actions, investigations
or proceedings, whether judicial or administrative, challenging this Agreement
or the consummation of the transactions contemplated hereby, including seeking
to have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (v) the execution or delivery of any
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement. In connection with and
without limiting the foregoing, Company and its Board of Directors shall, if any
state takeover statute or similar statute or regulation is or becomes applicable
to the Merger, this Agreement, the Company Voting Agreements, the Option
Agreement or any of the transactions contemplated hereby and thereby, use
commercially reasonable efforts to ensure that the Merger, this Agreement, the
Company Voting Agreements, the Option Agreement and the other transactions
contemplated hereby and thereby may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise to minimize the effect of
such statute or regulation on the Merger, this Agreement, the Company Voting
Agreements, the Option Agreement and the transactions contemplated hereby and
thereby. Notwithstanding anything herein to the contrary, nothing in this
Agreement shall be deemed to require Parent or Company or any subsidiary or
affiliate thereof to agree to any divestiture by itself or any of its affiliates
of shares of capital stock or of any business, assets or property, or the
imposition of any material limitation on the ability of any of them to conduct
their business or to own or exercise control of such assets, properties and
stock.
(b) Company shall give prompt notice to Parent of any representation or
warranty made by it contained in this Agreement becoming untrue or inaccurate,
or any failure of Company to comply with or satisfy in any respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement, in each case, such that the conditions set forth in Section 6.3(a) or
6.3(b) would not be satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement.
(c) Parent shall give prompt notice to Company of any representation or
warranty made by it or Merger Sub contained in this Agreement becoming untrue or
inaccurate, or any failure of Parent or Merger Sub to comply with or satisfy in
any respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement, in each case, such that the conditions set
forth in Section 6.2(a) or 6.2(b) would not be satisfied; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
5.7 Third Party Consents. As soon as practicable following the date
hereof, Parent and Company will each use commercially reasonable efforts to
obtain any consents, waivers and approvals under any of its or its subsidiaries'
respective agreements, contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby.
5.8 Stock Options; 401(k) Plan; Employee Benefit Matters.
(a) At the Effective Time, Parent shall assume all options to purchase
Common Stock issued by the Company pursuant to the Company Option Plans, whether
vested or unvested and whether exercisable or unexercisable, provided, however,
that no option shall be assumed if, as of immediately prior to the Effective
Time, the exercise price per share is $14.87 or greater (each a "Company
Option"). The Company's repurchase right with respect to any unvested shares
acquired by the exercise of Company Options shall be assigned to Parent by
virtue of the Merger and without any further action on the part of the Company
or the holder of the outstanding Company Option. Immediately after the Effective
Time, each Company Option outstanding immediately prior to the Effective Time
shall be deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under such Company Option at the Effective Time,
such number of shares of Parent Common Stock as is equal to the number of shares
of Company Common Stock subject to the unexercised portion of such option
multiplied by the Exchange Ratio, rounded down to the nearest whole number. The
exercise price per share of each such assumed
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Company Option shall be equal to the exercise price of such option immediately
prior to the Effective Time divided by the Exchange Ratio, rounded up to the
nearest whole cent. The term, vesting schedule, status as an "incentive stock
option" under Section 422 of the Code, if applicable, and all of the other terms
of the Company Options shall otherwise remain unchanged. It is the intention of
the parties that the Company Options so assumed by Parent qualify following the
Effective Time as incentive stock options as defined in Section 422 of the Code
to the extent such Company Options qualified as incentive stock options prior to
the Effective Time. Within 30 business days after the Effective Time, Parent
will issue to each person who, immediately prior to the Effective Time, was a
holder of a Company Option assumed by Parent a document evidencing the foregoing
assumption of such option by Parent.
(b) 401(k) Plans. Effective as of the day immediately preceding the Closing
Date, the Company and its Affiliates, as applicable, shall each terminate any
and all plans intended to include a Code Section 401(k) arrangement (unless
Parent provides written notice to the Company that such 401(k) plan(s) shall not
be terminated). Unless Parent provides such written notice to the Company, no
later than five business days prior to the Closing Date, the Company shall
provide Parent with evidence that such 401(k) plan(s) have been terminated
(effective as of the day immediately preceding the Closing Date) pursuant to
resolutions of the Company's Board of Directors. The form and substance of such
resolutions shall be subject to review and approval of Parent. The Company also
shall take such other actions in furtherance of terminating such 401(k) Plan(s)
as Parent may reasonably require.
(c) ESPP. The rights of participants in the Company ESPP with respect to
any offering then underway under the Company ESPP shall be determined by
treating the last business day prior to the Effective Time as the last day of
such offering and by making such other pro rata adjustments as may be necessary
to reflect the shortened offering but otherwise treating such shortened offering
as a fully effective and completed offering for all purposes under the Company
ESPP. Outstanding rights to purchase shares of Company Common Stock shall be
exercised in accordance with Section 13(b) of the Company ESPP, and each share
of Company Common Stock purchased pursuant to such exercise shall by virtue of
the Merger, and without any action on the part of the holder thereof, be
converted into the right to receive a number of shares of Parent Common Stock
equal to the Exchange Ratio, without issuance of certificates representing
issued and outstanding shares of Company Common Stock to participants under the
Company ESPP. As of the Effective Time, the Company ESPP shall be terminated.
Prior to the Effective Time, Company shall (i) provide Parent with evidence that
the Company ESPP has been terminated pursuant to resolutions of Company's Board
of Directors; the form and substance of such resolutions shall be subject to
prior review and approval of Parent and (ii) take such other actions (including,
but not limited to, if appropriate, amending the Company ESPP) that are
necessary to give effect to the transaction contemplated by this Section 5.8(c).
Employees of Company who become employees of Parent shall be eligible to
participate in the employee stock purchase plan of Parent (the "Parent ESPP")
(subject to such plan's terms and conditions) at a special offering period
beginning at the Effective Time.
(d) Employee Benefit Matters. All employees of Company shall continue on
their existing benefit plans until such time as, in Parent's sole discretion, an
orderly transition can be accomplished to employee benefit plans and programs
maintained by Parent for its and its affiliates' employees. Parent shall take
such reasonable actions, to the extent permitted by Parent's benefits programs,
as are necessary to allow eligible employees of Company to participate in the
health, welfare and other employee benefits (it being understood that equity
incentive plans and tax qualified plans are not considered employee benefits)
programs of Parent or alternative benefits programs that are, in the aggregate,
substantially similar to those applicable to employees of Parent in similar
functions and positions on similar terms. Pending such action, Parent shall
maintain the effectiveness of Company's benefit plans.
5.9 Form S-8. Parent agrees to file, if available for use by Parent, a
registration statement on Form S-8 for the shares of Parent Common Stock
issuable with respect to assumed Company Stock Options within thirty (30) days
following the Closing.
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5.10 Indemnification.
(a) From and after the Effective Time, Parent will cause to be maintained
in effect in all respects the current obligations of Company pursuant to any
indemnification agreements between Company and its directors and officers in
effect immediately prior to the Effective Time and any indemnification
provisions under the Company Charter Documents as in effect on the date hereof.
The Certificate of Incorporation and Bylaws of the Surviving Corporation will
contain provisions with respect to exculpation and indemnification that are at
least as favorable to the indemnified parties thereunder (the "Indemnified
Parties") as those contained in the Company Charter Documents as in effect on
the date hereof, which provisions will not be amended, repealed or otherwise
modified for a period of six (6) years from the Effective Time in any manner
that would adversely affect the rights thereunder of the Indemnified Parties,
unless such modification is required by law.
(b) For a period of six (6) years after the Effective Time, Parent will
cause the Surviving Corporation to maintain in effect, if available, directors'
and officers' liability insurance covering those persons who are currently
covered by the Company's directors' and officers' liability insurance policy on
terms comparable to those applicable to the current directors and officers of
the Company; provided, however, that in no event will Parent or the Surviving
Corporation be required to expend an annual premium for such coverage in excess
of 150% of the annual premium currently paid by the Company, it being understood
that Parent shall nevertheless be obligated to provide such coverage as may be
obtained for such 150% amount.
(c) This Section 5.10 is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
respective successors and assigns. In the event Parent or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity in such consolidation or merger or (ii)
transfers all or substantially all its properties and assets to any person,
then, and in each case, proper provision shall be made so that the successors
and assigns of Parent or the Surviving Corporation, as the case may be, honor
the indemnification obligations set forth in this Section 5.10.
5.11 Nasdaq Listing. Parent agrees to authorize for listing on Nasdaq the
shares of Parent Common Stock issuable, and those required to be reserved for
issuance, in connection with the Merger, upon official notice of issuance.
5.12 Affiliates. Set forth in Section 5.12 of the Company Schedule is a
list of those persons who may be deemed to be, in Company's reasonable judgment,
affiliates of Company within the meaning of Rule 145 promulgated under the
Securities Act (each, a "Company Affiliate"). Company will provide Parent with
such information and documents as Parent reasonably requests for purposes of
reviewing such list. Company will use its commercially reasonable efforts to
deliver or cause to be delivered to Parent, as promptly as practicable on or
following the date hereof, from each Company Affiliate an executed affiliate
agreement in substantially the form attached hereto as Exhibit F (the "Company
Affiliate Agreement"). Parent will be entitled to place appropriate legends on
the certificates evidencing any Parent Common Stock to be received by a Company
Affiliate pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the Parent Common Stock,
consistent with the terms of the Company Affiliate Agreement.
5.13 Regulatory Filings; Reasonable Efforts. As soon as may be reasonably
practicable, Company and Parent each shall file with the United States Federal
Trade Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") Notification and Report Forms relating to the
transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by the
parties. Company and Parent each shall promptly (a) supply the other with any
information which may be required in order to effectuate such filings and (b)
supply any additional information which reasonably may be required by the FTC,
the DOJ or the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem
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appropriate; provided, however, that Parent shall not be required to agree to
any divestiture by Parent or the Company or any of Parent's subsidiaries or
affiliates of shares of capital stock or of any business, assets or property of
Parent or its subsidiaries or affiliates or of the Company, its affiliates, or
the imposition of any material limitation on the ability of any of them to
conduct their businesses or to own or exercise control of such assets,
properties and stock (assuming for purposes of determining materiality in this
Section 5.13 that the Merger shall have been effected).
5.14 Parent Board of Directors. The Board of Directors of Parent will take
all actions necessary such that one member of Company's Board of Directors
reasonably acceptable to Parent (which initially shall be Xxxx Xxxxxx, provided
that he has executed an employment agreement with Parent which shall be in full
force and effect as of the Effective Time), shall be appointed as a director and
co-Chairman of Parent's Board of Directors as of the Effective Time with a term
expiring at the next annual meeting of Parent's stockholders after such
appointment.
5.15 Obligations of Merger Sub. Parent shall take all action necessary to
cause Merger Sub to perform its obligations under this Agreement and to
consummate the Merger on the terms and conditions set forth in this Agreement.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) Stockholder Approvals. This Agreement shall have been approved and
adopted, and the Merger shall have been duly approved, by the requisite
vote under applicable law, by the stockholders of Company. The Share
Issuance shall have been approved by the requisite vote under applicable
Nasdaq rules by the stockholders of Parent.
(b) Registration Statement Effective; Joint Proxy Statement. The SEC
shall have declared the S-4 effective. No stop order suspending the
effectiveness of the S-4 or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of the
Joint Proxy Statement/Prospectus, shall have been initiated or threatened
in writing by the SEC.
(c) No Order; HSR Act. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of
making the Merger illegal or otherwise prohibiting consummation of the
Merger. All waiting periods, if any, under the HSR Act relating to the
transactions contemplated hereby will have expired or terminated early and
all material foreign antitrust approvals required to be obtained prior to
the Merger in connection with the transactions contemplated hereby shall
have been obtained.
(d) Tax Opinions. Parent and Company shall each have received written
opinions from their respective tax counsel (Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, Professional Corporation, and Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP, respectively), in form and substance reasonably
satisfactory to them, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code and such
opinions shall not have been withdrawn; provided, however, that if the
counsel to either Parent or Company does not render such opinion, this
condition shall nonetheless be deemed to be satisfied with respect to such
party if counsel to the other party renders such opinion to such party. The
parties to this Agreement agree to make such reasonable representations as
requested by such counsel for the purpose of rendering such opinions.
(e) Nasdaq Listing. The shares of Parent Common Stock issuable to the
stockholders of Company pursuant to this Agreement and such other shares
required to be reserved for issuance in
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connection with the Merger shall have been authorized for listing on Nasdaq
upon official notice of issuance.
6.2 Additional Conditions to Obligations of Company. The obligation of
Company to consummate and effect the Merger shall be subject to the satisfaction
at or prior to the Closing Date of each of the following conditions, any of
which may be waived, in writing, exclusively by Company:
(a) Representations and Warranties. Each representation and warranty
of Parent and Merger Sub contained in this Agreement (i) shall have been
true and correct in all respects as of the date of this Agreement and (ii)
shall be true and correct on and as of the Closing Date with the same force
and effect as if made on the Closing Date except, in the case of clauses
(i) and (ii), (A) for such failures to be true and correct that do not in
the aggregate constitute a Material Adverse Effect on Parent and Merger
Sub, or, with respect to representations and warranties contained in
Sections 3.3, 3.16 and 3.17, that are not material, and (B) for those
representations and warranties which address matters only as of a
particular date (which representations shall have been true and correct
(subject to the qualifications set forth in the preceding clause (A)) as of
such particular date) (it being understood that, for purposes of
determining the accuracy of such representations and warranties, (i) all
"Material Adverse Effect" qualifications and other qualifications based on
the word "material" or similar phrases contained in such representations
and warranties shall be disregarded and (ii) any update of or modification
to the Parent Schedule made or purported to have been made after the date
of this Agreement shall be disregarded). Company shall have received a
certificate with respect to the foregoing signed on behalf of Parent by an
authorized officer of Parent.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
them on or prior to the Closing Date, and Company shall have received a
certificate to such effect signed on behalf of Parent by an authorized
officer of Parent.
(c) No Parent Material Adverse Effect. No Material Adverse Effect on
Parent shall have occurred from the date of this Agreement. Company shall
have received a certificate with respect to the foregoing signed on behalf
of Parent by the Chief Executive Officer of Parent.
(d) Election of Director. The Board of Directors of Parent shall have
elected Xxxx Xxxxxx as a director and co-Chairman of the Board of Directors
of Parent contingent upon, and effective as of, the Closing; provided,
however, that the conditions set forth in Section 5.14 are satisfied.
6.3 Additional Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) Representations and Warranties. Each representation and warranty
of Company contained in this Agreement (i) shall have been true and correct
in all respects as of the date of this Agreement and (ii) shall be true and
correct on and as of the Closing Date with the same force and effect as if
made on and as of the Closing Date except, in the case of clauses (i) and
(ii), (A) for such failures to be true and correct that do not in the
aggregate constitute a Material Adverse Effect on the Company or, with
respect to representations and warranties contained in Sections 2.3, 2.23,
2.24 and 2.25, that are not material, and (B) for those representations and
warranties which address matters only as of a particular date (which
representations shall have been true and correct (subject to the
qualifications set forth in the preceding clause (A)) as of such particular
date) (it being understood that, for purposes of determining the accuracy
of such representations and warranties, (i) all "Material Adverse Effect"
qualifications and other qualifications based on the word "material" or
similar phrases contained in such representations and warranties shall be
disregarded and (ii) any update of or modification to the Company Schedule
made or purported to have been made after the date of this Agreement shall
be disregarded). Parent shall have received a certificate with respect to
the foregoing signed on behalf of Company by an authorized officer of
Company.
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(b) Agreements and Covenants. Company shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of Company by the Chief Executive Officer of Company.
(c) Other Agreements. The Option Agreement shall remain in full force
and effect, and the Employment Agreements by and among Parent, Company and
at least three (3) of the following four (4) officers, Xxxx Xxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxx Xxxxxx and Xxxxxx Xxxxxxx, which three (3) shall include
both Xxxx Xxxxxx and Xxxxxxx Xxxxxxxx, shall remain in full force and
effect unless due to death or disability.
(d) No Company Material Adverse Effect. No Material Adverse Effect on
Company shall have occurred from the date of this Agreement. Parent shall
have received a certificate with respect to the foregoing signed on behalf
of Company by the Chief Executive Officer of Company.
(e) Consents. Company shall have obtained the consents, waivers and
approvals required in connection with the consummation of the transactions
contemplated hereby in connection with the agreements, contracts, licenses
or leases set forth on Section 6.3(e) of the Company Schedule.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after the requisite approval of the
stockholders of Company:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and Company;
(b) by either Company or Parent if the Merger shall not have been
consummated by June 30, 2001 for any reason; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Merger to occur on or before
such date and such action or failure to act constitutes (i) a material
breach of this Agreement or (ii) a material acquisition or proposed
acquisition by Parent;
(c) by either Company or Parent if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which order, decree, ruling or other action is
final and nonappealable;
(d) by either Company or Parent if (i) the required approval of the
stockholders of Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting
of Company stockholders duly convened therefor or at any adjournment
therefor or (ii) the required approval by the stockholders of Parent of the
Share Issuance required under applicable Nasdaq rules shall not have been
obtained by reason of the failure to obtain the required vote at a meeting
of Parent stockholders duly convened therefor or at any adjournment
thereof;
(e) by Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or
if any representation or warranty of Parent shall have become untrue, in
either case such that the conditions set forth in Section 6.2(a) or Section
6.2(b) would not be satisfied as of the time of such breach or as of the
time such representation or warranty shall have become untrue, provided,
that if such inaccuracy in Parent's representations and warranties or
breach by Parent is curable by Parent, then Company may not terminate this
Agreement under this Section 7.1(e) for so long as Parent continues to
exercise best efforts to cure such breach;
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(f) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of Company set forth in this Agreement, or if any
representation or warranty of Company shall have become untrue, in either
case such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Company's representations and warranties or breach by Company
is curable by Company, then Parent may not terminate this Agreement under
this Section 7.1(f) for so long as Company continues to exercise best
efforts to cure such breach; or
(g) by Parent, if (i) the Board of Directors of Company withdraws,
modifies or changes its recommendation of this Agreement or the Merger in a
manner adverse to Parent or its stockholders, (ii) the Board of Directors
of Company shall have recommended to the stockholders of Company an
Acquisition Proposal, (iii) the Company fails to comply with Section 5.4 in
all material respects, (iv) an Acquisition Proposal shall have been
announced or otherwise become publicly known and the Board of Directors of
Company shall have (A) failed to recommend against acceptance of such by
its stockholders (including by taking no position, or indicating its
inability to take a position, with respect to the acceptance by its
stockholders of an Acquisition Proposal involving a tender offer or
exchange offer) or (B) failed to reconfirm its approval and recommendation
of this Agreement and the transactions contemplated hereby within five
business days thereafter, or (v) the Board of Directors of Company resolves
to take any of the actions described above.
7.2 Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto
(or such later time as may be required by Section 7.1). In the event of the
termination of this Agreement as provided in Section 7.1, this Agreement shall
be of no further force or effect, except (i) as set forth in this Section 7.2,
Section 5.3(a), Section 7.3 and Article VIII, each of which shall survive the
termination of this Agreement, and (ii) nothing herein shall relieve any party
from liability for fraud in connection with, or any willful breach of, this
Agreement.
7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses whether or not the
Merger is consummated; provided, however, that Parent and Company shall share
equally all fees and expenses, other than attorneys' and accountants fees and
expenses, incurred (i) in relation to the printing and filing of the Joint Proxy
Statement/Prospectus (including any preliminary materials related thereto) and
the S-4 (including financial statements and exhibits) and any amendments or
supplements thereto or (ii) for the premerger notification and report forms
under the HSR Act.
(b) Termination Fee.
(i) In the event that (A) Parent shall terminate this Agreement
pursuant to Section 7.1(g), or (B) this Agreement shall be terminated (x)
pursuant to Section 7.1(b) or (y) pursuant to Section 7.1(d)(i) and (1) at
or prior to such termination, there shall exist or have been publicly
proposed a bona fide Acquisition Proposal relating to a Company Acquisition
with a person or group reasonably capable of consummating a Company
Acquisition and (2) within 12 months after such termination, Company shall
enter into a definitive agreement with respect to any Company Acquisition
or any Company Acquisition shall be consummated, then, in the case of
clause (A), promptly after such termination, or in the case of clause (B),
concurrently with the execution of a definitive agreement with respect to,
or the consummation of, as applicable, such Company Acquisition, Company
shall pay to Parent $6.7 million in cash (the "Termination Fee").
(ii) The Company acknowledges that the agreements contained in this
Section 7.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not enter
into this Agreement; accordingly, if the Company fails to pay in a timely
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manner the amounts due pursuant to this Section 7.3(b) and, in order to
obtain such payment, Parent makes a claim that results in a judgment
against the Company for the amounts set forth in this Section 7.3(b), the
Company shall pay to Parent its costs and expenses (including reasonable
attorneys' fees and expenses) in connection with such suit, together with
interest on the amounts set forth in this Section 7.3(b) at the prime rate
of Citibank N.A. in effect on the date such payment was required to be
made. Payment of the fees described in this Section 7.3(b) shall not be in
lieu of damages incurred in the event of breach of this Agreement. For the
purposes of this Agreement, "Company Acquisition" shall mean any of the
following transactions (other than the transactions contemplated by this
Agreement): (A) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the Company pursuant to which the stockholders of the Company immediately
preceding such transaction hold less than 60% of the aggregate equity
interests in the surviving or resulting entity of such transaction, (B) a
sale or other disposition by the Company of assets representing in excess
of 40% of the aggregate fair market value of the Company's business
immediately prior to such sale or (C) the acquisition by any person or
group (including by way of a tender offer or an exchange offer or issuance
by the Company), directly or indirectly, of beneficial ownership or a right
to acquire beneficial ownership of shares representing in excess of 40% of
the voting power of the then outstanding shares of capital stock of the
Company.
7.4 Amendment. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Parent, Merger Sub and Company.
7.5 Extension; Waiver. At any time prior to the Effective Time, any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations and Warranties. The representations and
warranties of Company, Parent and Merger Sub contained in this Agreement shall
terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) or by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Proxim, Inc.
000 XxXxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Day
Telecopy No.: (000) 000-0000
and to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
Xxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
(b) if to Company, to:
Netopia, Inc.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
8.3 Interpretation; Definitions.
(a) When a reference is made in this Agreement to Exhibits, such reference
shall be to an Exhibit to this Agreement unless otherwise indicated. When a
reference is made in this Agreement to Sections, such reference shall be to a
Section of this Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The 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. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity.
(b) For purposes of this Agreement:
(i) the term "Knowledge" means with respect to a party hereto, with
respect to any matter in question, actual knowledge of the executive
officers of such party after reasonable inquiry;
(ii) the term "Material Adverse Effect" when used in connection with
an entity means any change, event, violation, inaccuracy, circumstance or
effect that is, or is reasonably likely to be, materially adverse to the
business, assets, liabilities, financial condition, capitalization, or
results of
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operations of such entity and its subsidiaries taken as a whole; provided,
however, that in no event shall (A) a decrease in such entity's stock price
or the failure to meet or exceed Wall Street research analysts' or such
entity's internal earnings or other estimates or projections in and of
itself constitute a Material Adverse Effect or (B) any change, event,
violation, inaccuracy, circumstance or effect that such entity successfully
bears the burden of proving results from (x) changes affecting the industry
in which such entity operates generally (which changes do not
disproportionately affect such entity) or (y) changes affecting the United
States economy generally, constitute a Material Adverse Effect; provided
further, that in no event shall the following be taken into account in
determining whether there has been or will be a Material Adverse Effect:
(1) any adverse change, effect, event, occurrence, state of facts or
development to the extent primarily and directly attributable to the
announcement or pendency of the Merger (including any cancellations of or
delays in customer orders, any reductions in sales, any disruption in
supplier, distributor, partner or similar relationships or any loss of
employees that is so attributable), provided, however, that the party
claiming that such change, effect, event, occurrence, state of fact or
development does not constitute a Material Adverse Effect shall bear the
burden of showing that it is primarily and directly attributable to the
announcement or pendency of the Merger, or (2) any litigation commenced or
threatened against Company or Parent or any member of the Board of
Directors of Company or Parent in respect of this Agreement; and
(iii) the term "PERSON" shall mean any individual, corporation
(including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company),
firm or other enterprise, association, organization, entity or Governmental
Entity.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Schedule and the
Parent Schedule (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect until the Closing and shall survive any
termination of this Agreement; and (b) are not intended to confer upon any other
person any rights or remedies hereunder, except as specifically provided in
Section 5.10.
8.6 Severability. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
[Remainder of Page Intentionally Left Blank]
*****
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
PROXIM, INC.
By:
Name:
Title:
ALK ACQUISITION CORP.
By:
Name:
Title:
NETOPIA, INC.
By:
Name:
Title:
[SIGNATURE PAGE OF AGREEMENT AND PLAN OF MERGER AND REORGANIZATION]
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