FIRST AMENDMENT TO OPTION AND
AGREEMENT AND PLAN OF MERGER
This First Amendment to Option and Agreement and Plan of Merger (the
"Amendment") is entered into as of August 29, 2002 by and among (i) National
Semiconductor Corporation, a Delaware corporation ("National"), (ii) Nintai
Acquisition Sub, Inc., a California corporation and a wholly-owned subsidiary of
National ("Merger Sub"), (iii) DigitalQuake, Inc., a California corporation
("DigitalQuake"), and (iv) Paul A. Lessard and Michael G. Fung (the "Founders").
National, Merger Sub, DigitalQuake and the Founders are sometimes hereinafter
referred to as the "Parties."
WHEREAS, the Parties entered into an Option and Agreement and Plan of
Merger dated as of February 8, 2002 (the "Agreement"); and
WHEREAS, the Parties now wish to amend the Agreement in the manner
described in this Amendment; and
WHEREAS, the board of directors of DigitalQuake has approved this Amendment
by resolutions adopted at a special meeting held on August __, 2002; and
WHEREAS, concurrently with the execution of this Amendment and as an
inducement to National to enter into this Amendment, the holders of all
outstanding shares of DigitalQuake capital stock have approved the Agreement, as
amended by this Amendment, and the Merger (as defined in the Agreement) by
unanimous written consent; and
WHEREAS, concurrently with the execution of this Amendment and as an
inducement to DigitalQuake and the Founders to enter into this Amendment,
National has delivered a Merger Option Notice (as defined in the Agreement),
which specifies an anticipated Closing Date of August 29, 2002; and
WHEREAS, the Parties believe this Amendment will benefit each of them.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, the Parties hereto agree as follows:
1. The definition of "Closing Date" in Section 1.1 of the Agreement
shall be revised to state in its entirety as follows:
""Closing Date" means the date specified by National in the Merger
Option Notice, subject to the terms and conditions of this Agreement."
2. The definition of "Excess Transaction Costs" in Section 1.1 of
the Agreement shall be revised to state in its entirety as
follows:
"Excess Transaction Costs" means (i) any fees and expenses of legal
counsel, accountants and any other advisors, representatives, consultants
or finders incurred by DigitalQuake in excess of $120,000 in connection
with the negotiation, preparation, execution and performance of this
Agreement, the Series B Purchase Agreement, the Technology Development and
Licensing Agreement and the transactions contemplated hereby and thereby,
excluding any fees or expenses payable to Toan Tran, and (ii) all amounts
greater than $300,000 payable to Toan Tran in connection with the
negotiation, preparation, execution and performance of this Agreement, the
Series B Purchase Agreement, the Technology Development and Licensing
Agreement and the transactions contemplated hereby and thereby."
3. The definition of "Financial Statements" in Section 1.1 of the
Agreement shall be revised to state in its entirety as follows:
""Financial Statements" means the unaudited balance sheets and related
statements of income, cash flow and shareholders' equity for DigitalQuake
as of and for the years ended December 31, 2001 and 2000, and as of and for
the six months ended June 30, 2002 and 2001, together with any notes
thereon, all of which are attached as Schedule 1.1(c)."
4. The following definition shall be added to Section 1.1 of the
Agreement:
""Restricted DigitalQuake Common Stock" shall mean shares of
DigitalQuake Common Stock issued upon exercise of a DigitalQuake Option
that are not Vested Shares (within the meaning of the terms of the
applicable DigitalQuake Option) and that do not become Vested Shares by
virtue of any acceleration of vesting triggered by the Merger under the
terms of the applicable DigitalQuake Option."
5. Section 2.4 of the Agreement shall be revised to state in its
entirety as follows:
"2.4 Actions Following Exercise of the Option. Immediately following
National's exercise of the Merger Option, each of the parties to this
Agreement shall take all actions necessary or desirable to consummate the
Merger by the date specified by National in the Merger Option Notice."
6. Section 3.2 of the Agreement shall be revised to state in its
entirety as follows:
"3.2 Conversion of DigitalQuake Common Stock and DigitalQuake
Preferred Stock.
(a) At the Effective Time, each share of DigitalQuake Series A
Preferred Stock issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be
canceled and extinguished and converted into the right to
receive in cash, without interest, $1.00.
(b) At the Effective Time, each share of DigitalQuake Series B
Preferred Stock issued and outstanding immediately prior to
the Effective Time (other than shares of DigitalQuake Series
B Preferred Stock held by National or its Subsidiaries
(which shall be canceled pursuant to Section 3.7)) shall, by
virtue of the Merger and without any action on the part of
the holder thereof, be canceled and extinguished and
converted into the right to receive in cash, without
interest, $1.78.
(c) At the Effective Time, each share of DigitalQuake Common
Stock, including shares of Restricted DigitalQuake Common
Stock, issued and outstanding immediately prior to the
Effective Time (other than shares of DigitalQuake Common
Stock held by National or its Subsidiaries (which shall be
canceled pursuant to Section 3.7) and other than Dissenting
Shares (as defined herein)) shall, by virtue of the Merger
and without any action on the part of the holder thereof, be
canceled and extinguished and converted into the right to
receive in cash, without interest:
(i) immediately following the Effective Time, an amount
equal to the quotient of (A) the Adjusted Consideration
(as defined below) divided by (B) the sum of (x) the
total number of shares of DigitalQuake Common Stock
outstanding three days before the Closing Date
(including shares held by National and its
Subsidiaries) plus (y) the total number of shares of
DigitalQuake Common Stock issuable upon conversion of
shares of DigitalQuake Preferred Stock (including
shares held by National and its Subsidiaries)
outstanding three days before the Closing Date plus (z)
the total number of shares of DigitalQuake Common Stock
subject to DigitalQuake Options, warrants or other
convertible securities (including those held by
National and its Subsidiaries) outstanding three days
before the Closing Date (such amount, the "Adjusted Per
Share Price"); provided, however, that ten percent of
the Adjusted Per Share Price shall be withheld and
deposited into escrow pursuant to Section 3.4 hereof.
The amount of the Adjusted Per Share Price withheld and
deposited into escrow from all holders of DigitalQuake
Common Stock and DigitalQuake Preferred Stock (other
than National) and deposited into escrow, together with
the amounts withheld from the Optionees pursuant to
clause (y)(I) of Section 3.4(a) and clause (y)(I) of
Section 3.4(b), is referred to herein as the "Indemnity
Escrow Amount." For purposes of this Agreement, the
"Adjusted Consideration" means an amount equal to
Twenty Million Six Hundred Thousand Dollars
($20,600,000) reduced by the Excess Transaction Costs,
if any;
(ii) on the date that is thirty (30) days after the issuance
by National of a statement of operations as part of its
standard quarterly earnings press release for the
quarterly period ending August 24, 2003, an amount
equal to 94% of (A) the amount specified in the table
below under the heading "Aggregate Earn-Out Amount"
corresponding to the aggregate amount of Revenue (as
defined below) recognized by National from the
Effective Time through August 24, 2003 from sales of
products incorporating DQ Technology (as defined below)
set forth in the table below under the heading "Revenue
Amount" divided by (B) the sum of (x) the total number
of shares of DigitalQuake Common Stock outstanding
three days before the Closing Date (other than shares
held by National and its Subsidiaries) plus (y) the
total number of shares of DigitalQuake Common Stock
issuable upon conversion of shares of DigitalQuake
Preferred Stock (other than shares held by National and
its Subsidiaries) outstanding three days before the
Closing Date plus (z) the total number of shares of
DigitalQuake Common Stock subject to DigitalQuake
Options, warrants or other convertible securities
(other than those held by National and its
Subsidiaries) outstanding three days before the Closing
Date; and
Revenue Amount Aggregate Earn-Out Amount
-------------- -------------------------
Greater than $14,000,000 $ 1,400,000
$7,000,000 to $14,000,000 $ 500,000
Less than $7,000,000 $ 0
(iii)on the date that is thirty (30) days after the
issuance by National of a statement of operations as
part of its standard quarterly earnings press release
for the quarterly period ending August 29, 2004, an
amount equal to 94% of (A) the amount specified in the
table below under the heading "Aggregate Earn-Out
Amount" corresponding to the aggregate amount of
Revenue recognized by National from the Effective Time
through August 29, 2004 from sales of products
incorporating DQ Technology set forth in the table
below under the heading "Revenue Amount" divided by (B)
the sum of (x) the total number of shares of
DigitalQuake Common Stock outstanding three days before
the Closing Date (other than shares held by National
and its Subsidiaries) plus (y) the total number of
shares of DigitalQuake Common Stock issuable upon
conversion of shares of DigitalQuake Preferred Stock
(other than shares held by National and its
Subsidiaries) outstanding three days before the Closing
Date plus (z) the total number of shares of
DigitalQuake Common Stock subject to DigitalQuake
Options, warrants or other convertible securities
(other than those held by National and its
Subsidiaries) outstanding three days before the Closing
Date.
Revenue Amount Aggregate Earn-Out Amount
-------------- -------------------------
Greater than $66,000,000 $ 3,000,000
$33,000,000 to $66,000,000 $ 1,000,000
Less than $33,000,000 $ 0
For purposes of this Section 3.2(c), "Revenue" shall
mean those sales by National and its Subsidiaries that,
according to generally accepted accounting principles
and National's revenue recognition policies, may be
recognized as revenue and that have been reported as
revenue in a quarterly statement of operations
published by National as part of a quarterly earnings
press release, and "DQ Technology" shall mean
DigitalQuake's (i) present scaler technology with
third- or fourth-generation scaler algorithms, or
future generations thereof; (ii) 80 MHz to 160MHz
triple analog-digital converter and phase-locked loop,
or future generations thereof; (iii) digital-video
interface receiver, or future generations thereof; (iv)
high-definition content protection, or future
generations thereof; or (v) high-resolution digital
phase-locked loop, or future generations thereof. For
the sake of clarity, the Parties understand and agree
that DigitalQuake will be credited the full amount of
Revenue generated by the sale of a product
incorporating DQ Technology even where DQ Technology
comprises only a portion of such product.
(d) The amounts described in clauses (a) - (c) shall be paid in
accordance with Section 3.6; provided, however, that the
aggregate amount payable to each Principal Employee pursuant
to clause (i) of paragraph (c) above shall be further
subject to Section 3.5; and provided further that payments
with respect to shares of Restricted DigitalQuake Common
Stock shall be subject to Section 3.4(e) and payments with
respect to such shares and any other shares of DigitalQuake
Common Stock that are subject to forfeiture, rights of
repurchase at the exercise price or other vesting
restrictions as of the date hereof or the Closing Date shall
be subject to Section 3.9.
(e) On behalf of the Shareholders and holders of DigitalQuake
Options on the Closing Date, Paul Lessard (or in the event
that Paul Lessard is no longer employed by National, the
next-highest level manager of DigitalQuake immediately prior
to the Effective Time who continues to be employed by
National) shall have access to National's proprietary
financial information system, EXPERTs, for the sole purpose
of monitoring Revenue (as defined in this Section 3.2), and
not for the purpose of reviewing or monitoring other
National sales data or revenues.
(f) Notwithstanding the earn-out components of the Merger
consideration, the parties understand and agree that
National shall be entitled to operate DigitalQuake in
accordance with National's business judgment following the
Merger without liability to DigitalQuake, the Founders or
the Shareholders for failure to maximize the payments
contemplated by clauses (ii) and (iii) of this Section
3.2(c).
(g) Concurrently with the making of the payments contemplated by
clauses (ii) of Section 3.2(c), if any, National shall pay
to Toan Tran an amount equal to 6% of the product of clauses
(A) and (B) of clause (ii) of Section 3.2(c) (the "2003
Gross Earn-Out Amount Per Share") multiplied by the number
of shares of DigitalQuake Common Stock (other than shares of
Restricted DigitalQuake Common Stock) outstanding
immediately prior to the Effective Time. In addition,
concurrently with the making of the payments contemplated by
clauses (iii) of Section 3.2(c), if any, National shall pay
to Toan Tran an amount equal to 6% of the product of clauses
(A) and (B) of clause (iii) of Section 3.2(c) (the "2004
Gross Earn-Out Amount Per Share") multiplied by the number
of shares of DigitalQuake Common Stock (other than shares of
Restricted DigitalQuake Common Stock) outstanding
immediately prior to the Effective Time."
7. The following paragraphs shall be added to the end of Section 3.4:
"(d) Earn-Out Payments on DigitalQuake Options. For each Digital Quake
Option that is not exercised prior to the Effective Time, National shall
make the following payments on the following dates, subject to the
limitations set forth below:
(i) on the date that is thirty (30) days after the issuance
by National of a statement of operations as part of its
standard quarterly earnings press release for the
quarterly period ending August 24, 2003, an amount
equal to (A) the amount payable with respect to each
share of DigitalQuake Common Stock pursuant to Section
3.2(c)(ii) above multiplied by (B) the number of shares
of DigitalQuake Common Stock subject to such
DigitalQuake Option immediately prior to the Effective
Time, reduced by the amount of any withholding taxes
that may be required on such payment (which National
shall cause DigitalQuake to duly withhold for the
amount of such Optionee); provided that with respect to
any DigitalQuake Option that is not fully vested as of
the Effective Time (after taking into account any
acceleration of vesting triggered by the Merger under
the terms of the applicable DigitalQuake Option),
National shall have no obligation to make a payment to
the former holder of such DigitalQuake Option pursuant
to this clause (i) unless the holder remains employed
by DigitalQuake or National and otherwise satisfies the
requirements for continued vesting of the DigitalQuake
Option in question through the date of such payment;
and
(ii) on the date that is thirty (30) days after the issuance
by National of a statement of operations as part of its
standard quarterly earnings press release for the
quarterly period ending August 29, 2004, an amount
equal to (A) the amount payable with respect to each
share of DigitalQuake Common Stock pursuant to Section
3.2(c)(iii) above multiplied by (B) the number of
shares of DigitalQuake Common Stock subject to such
DigitalQuake Option immediately prior to the Effective
Time, reduced by the amount of any withholding taxes
that may be required on such payment (which National
shall cause DigitalQuake to duly withhold for the
amount of such Optionee); provided that with respect to
any DigitalQuake Option that is not fully vested as of
the Effective Time (after taking into account any
acceleration of vesting triggered by the Merger under
the terms of the applicable DigitalQuake Option),
National shall have no obligation to make a payment to
the former holder of such DigitalQuake Option pursuant
to this clause (ii) unless the holder remains employed
by DigitalQuake or National and otherwise satisfies the
requirements for continued vesting of the DigitalQuake
Option in question through the date of such payment.
(e) Restricted DigitalQuake Common Stock. Notwithstanding
Section 3.2(c)(i) above, in the case of shares of Restricted
Digital Quake Common Stock, in lieu of the payment that
National otherwise would be required to make immediately
following the Effective Time pursuant to such Section
3.2(c)(i), National shall make semi-annual cash payments to
the former holders of such shares of Restricted DigitalQuake
Common Stock beginning six months after the Effective Time.
Each such payment shall be in an amount equal to the
Adjusted Per Share Price multiplied by the Restricted Stock
Semi-Annual Increment provided that the holder remains
employed by DigitalQuake or National and otherwise satisfies
the requirements for continued vesting of the Restricted
DigitalQuake Common Stock in question (as set forth in the
DigitalQuake Option pursuant to which such shares were
issued) through the date of such payment. "Restricted Stock
Semi-Annual Increment" shall mean the number of shares, if
any, of Restricted DigitalQuake Common Stock that would have
vested during the six-month period ending on the date of
such payment if such shares had remained outstanding and
continued to vest in accordance with the terms of the
DigitalQuake Option pursuant to which they were issued.
After semi-annual payments have been made with respect to
all shares of Restricted DigitalQuake Common Stock held by a
holder immediately prior to the Effective Time, no further
semi-annual payments to such holder shall be required. In
addition, any semi-annual payments with respect to shares of
Restricted DigitalQuake Common Stock shall cease immediately
upon the termination of the holder's employment. Further,
notwithstanding clauses (ii) and (iii) of Section 3.2(c),
National shall have no obligation to make a payment to the
former holder of shares of Restricted DigitalQuake Common
Stock pursuant to clause (ii) or (iii) of Section 3.2(c)
unless the holder remains employed by DigitalQuake or
National and otherwise satisfies the requirements for
continued vesting of the Restricted DigitalQuake Common
Stock under the terms of the DigitalQuake Option pursuant to
which such shares were granted through the date of such
payment.
(f) Finder's Fee on Earn-Out Amounts Paid on DigitalQuake
Options and Restricted DigitalQuake Common Stock.
Concurrently with the making of the payments to holders of
DigitalQuake Common Stock contemplated by clause (ii) of
Section 3.2(c), National shall pay to Toan Tran an amount
equal to 6% of the 2003 Gross Earn-Out Amount Per Share
multiplied by the sum of (x) the number of shares of
DigitalQuake Common Stock subject to DigitalQuake Options
with respect to which National is required to make payment
pursuant to clause (i) of Section 3.4(d) plus (y) the number
of shares of Restricted DigitalQuake Common Stock with
respect to which National is required to make payment
pursuant to Section 3.4(e). In addition, concurrently with
the making of the payments to holders of DigitalQuake Common
Stock contemplated by clause (iii) of Section 3.2(c),
National shall pay to Toan Tran an amount equal to 6% of (A)
the 2004 Gross Earn-Out Amount Per Share multiplied by (B)
the sum of (x) the number of shares of DigitalQuake Common
Stock subject to DigitalQuake Options with respect to which
National is required to make payment pursuant to clause (ii)
of Section 3.4(d) plus (y) the number of shares of
Restricted DigitalQuake Common Stock with respect to which
National is required to make payment pursuant to Section
3.4(e)."
8. Clauses (b) and (c) of Section 3.5 of the Agreement shall be
revised to state in their entirety as follows:
"(b) The second installment payable to each Principal Employee
with respect to his DigitalQuake Common Stock and
DigitalQuake Option(s) shall be due and payable on August
24, 2003; and
(c) The third installment payable to each Principal Employee
with respect to his DigitalQuake Common Stock and
DigitalQuake Option(s) shall be due and payable on August
29, 2004."
9. Section 3.6(a) of the Agreement shall be revised to state in its
entirety as follows:
"(a) As soon as practicable after the Effective Time, each Person
holding a certificate or certificates representing shares of
DigitalQuake Common Stock or DigitalQuake Preferred Stock
issued and outstanding immediately prior to the Effective
Time shall deliver such certificate(s), a letter of
transmittal in the form attached hereto as Exhibit E-1 and a
Form W-9 or Form W-8 (or a suitable substitute form), as
applicable, to the Surviving Corporation or its transfer
agent. In the event that any such holder no longer has in
his or her possession any such certificate(s) (other than
certificates representing shares of DigitalQuake Common
Stock held in escrow by DigitalQuake), such holder shall, in
lieu of surrendering such certificate(s), deliver to
Surviving Corporation an affidavit of that fact whereupon
National may, in its sole discretion, require the holder of
such lost certificate(s) to deliver a bond in such sum as
National may reasonably direct as indemnity against any
claim that may be made against National or any of its
Affiliates with respect to the certificate. Each Person
owning shares of DigitalQuake Common Stock held in escrow by
DigitalQuake in accordance with the terms of the
DigitalQuake Option pursuant to which such shares were
issued shall deliver a letter of transmittal in the form
attached hereto as Exhibit E-2 and a Form W-9 or Form W-8
(or a suitable substitute form), as applicable, to Surviving
Corporation or its transfer agent. Thereupon, in each case,
each such holder shall be entitled to receive in exchange
therefor cash consideration in the amount and in the manner
described in Section 3.2, 3.4(e) and Section 3.5, without
interest, and Surviving Corporation shall pay and National
shall cause Surviving Corporation to pay such amount
promptly to the holder."
10. The first sentence of the first unnumbered paragraph of Article
IV of the Agreement shall be revised to state in its entirety as
follows:
"DigitalQuake and each of the Founders jointly and severally make the
following representations and warranties to National and Merger Sub, which
representations and warranties are true and correct as of the date hereof
and will be true and correct as of the Closing Date, except as set forth in
the disclosure schedule delivered by DigitalQuake to National and Merger
Sub on the date hereof, as the same shall be updated on the August 29, 2002
[the date of the Amendment] with respect to events or circumstances arising
between the date hereof and August 29, 2002 (the "Disclosure Schedule")."
11. The first sentence of Section 8.1 of the Agreement shall be
revised to state in its entirety as follows:
"All representations and warranties of National and Merger Sub
contained in this Agreement and in the First Amendment to Option and
Agreement and Plan of Merger entered into as of August 29, 2002 by and
among National, Merger Sub, DigitalQuake, and the Founders (the
"Amendment") shall be true and correct in all material respects at and as
of the Closing Date as if such representations and warranties were made at
and as of the Closing Date (without giving effect to any limitations with
respect to materiality set forth therein) except as would not have a
Material Adverse Effect on National or Merger Sub."
12. The first sentence of Section 9.1 of the Agreement shall be
revised to state in its entirety as follows:
"All representations and warranties of DigitalQuake contained in this
Agreement and in the Amendment shall be true and correct in all material
respects at and as of the Closing Date as if such representations and
warranties were made at and as of the Closing Date (without giving effect
to any limitations with respect to materiality set forth therein)."
13. The following paragraph shall be added as a newly created Section
9.13:
"9.13 Consents of Holders of Restricted DigitalQuake Common Stock.
DigitalQuake shall have delivered to National consents from all of the
holders of shares of Restricted DigitalQuake Common Stock issued prior to
the Effective Time approving of the treatment of such shares contemplated
by the Agreement, as amended by the Amendment, and the termination of such
holders' rights under the DigitalQuake Option(s) pursuant to which such
shares were issued."
14. The following sentence shall be added to the end of Section 14.5
of the Agreement:
"Upon the Effective Time, this Agreement and the Agreement of Merger
shall supersede all DigitalQuake Options, which DigitalQuake Options shall
automatically be terminated as of the Closing, including without limitation
any provisions thereof relating to DigitalQuake's rights to repurchase
shares of Restricted DigitalQuake Common Stock issued upon exercise of such
DigitalQuake Options."
15. Each of Exhibit A, Exhibit B, Exhibit C, Exhibit F and Exhibit G
to the Agreement shall be replaced in its entirety by Exhibit A,
Exhibit B, Exhibit C, Exhibit F and Exhibit G hereto,
respectively. Exhibit E to the Agreement shall be replaced in its
entirety by Exhibit E-1 and Exhibit E-2 hereto. Schedule 1.1(c)
to the Agreement shall be replaced in its entirety by Schedule
1.1(c) hereto.
16. DigitalQuake and the Founders represent and warrant as follows:
DigitalQuake has all necessary power and authority to enter into
this Amendment and has taken all corporate action necessary to
consummate the transactions contemplated by the Agreement as
amended hereby and to perform its obligations thereunder. The
execution and delivery of this Amendment and the performance by
DigitalQuake of its obligations under the Agreement as amended
hereby and the consummation of the transactions contemplated
thereby, including the Merger, have been unanimously approved by
the Board of Directors and unanimously approved by the
shareholders of DigitalQuake. Certified resolutions of the Board
of Directors and written consents of the shareholders of
DigitalQuake have been provided to National, there have been no
changes to such resolutions or written consents, and such
resolutions and written consents remain in full force and effect.
Each of the Founders has all necessary power and authority to
enter into this Amendment and has taken all action necessary to
consummate the transactions contemplated by the Agreement as
amended hereby and to perform its obligations thereunder. This
Amendment has been duly executed and delivered by DigitalQuake
and the Founders and is a legal, valid and binding obligation of
DigitalQuake, and the Founders, enforceable against each of them
in accordance with its terms, except that enforceability may be
limited by the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights of creditors.
17. National and Merger Sub represent and warrant as follows: Each of
National and Merger Sub has all requisite corporate power and
authority, and has taken all corporate action necessary to
execute and deliver this Amendment, to consummate the
transactions contemplated by the Agreement as amended hereby and
to perform its obligations thereunder. This Amendment has been
duly executed and delivered by each of National and Merger Sub
and is a legal, valid and binding obligation of National and
Merger Sub, enforceable against each of them in accordance with
its terms, except that enforceability may be limited by the
effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of
creditors.
18. The effectiveness of this Amendment is subject to (a) the
delivery by DigitalQuake to National concurrently with the
execution and delivery hereof of certified resolutions of the
Board of Directors and written consents of the shareholders of
DigitalQuake unanimously approving the execution and delivery of
this Amendment and the performance by DigitalQuake of its
obligations under the Agreement as amended hereby and the
consummation of the transactions contemplated thereby, including
the Merger, (b) the delivery by Merger Sub to DigitalQuake
concurrently with the execution and delivery hereof of copies of
the resolutions of the Board of Directors and written consent of
the sole shareholder of Merger Sub unanimously approving the
execution and delivery of this Amendment and the performance by
Merger Sub of its obligations under the Agreement as amended
hereby and the consummation of the transactions contemplated
thereby, including the Merger, (c) the delivery by National to
DigitalQuake of a Merger Option Notice which specifies an
anticipated Closing Date of August 29, 2002, (d) delivery by
DigitalQuake to National of consents from all of the holders of
shares of Restricted DigitalQuake Common Stock to the treatment
of such shares contemplated by the Agreement, as amended hereby,
(e) the delivery by the parties to Latham & Watkins of the
Agreement of Merger attached as Exhibit A to hold in escrow
pending receipt of notice from National that the Agreement of
Merger should be dated and submitted to the Secretary of State of
the State of California for filing, and (f) the delivery by
DigitalQuake to National of Non-Compete Agreements signed by the
individuals listed or described on Schedule 1.1(d) and Employment
Agreements signed by the individuals listed or described on
Schedule 1.1(b). Prior to such deliveries, this Amendment shall
have no force or effect.
19. This Amendment may be executed in one or more counterparts, and
by different parties hereto in separate counterparts, each of
which when executed shall be deemed to be an original, including
counterparts transmitted by facsimile, but all of which taken
together shall constitute one and the same agreement. Capitalized
terms used herein without definition shall have the meanings
given to such terms in the Agreement.
20. On and after the date hereof, each reference in the Agreement and
in any of the Ancillary Agreements to the "Agreement" shall mean
the Agreement as amended hereby. Except as specifically amended
above, the Agreement shall remain in full force and effect and is
hereby ratified and confirmed. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or
remedy of any party hereto, nor constitute a waiver of any
provision of the Agreement.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment or
caused this Amendment to be duly executed on its behalf by its officer thereunto
duly authorized, as of the day and year first above written.
NATIONAL SEMICONDUCTOR CORPORATION,
a Delaware corporation
By: //S// DONALD MACLEOD
Name:
Its:
NINTAI ACQUISITION SUB, INC.,
a California corporation
By: //S// DONALD MACLEOD
Name:
Its:
DIGITALQUAKE, INC.,
a California corporation
By: //S// PAUL A. LESSARD
Name:
Its:
PAUL A. LESSARD
//S// PAUL A. LESSARD
MICHAEL G. FUNG
//S// MICHAEL G. FUNG