AGREEMENT AND PLAN OF MERGER, dated as of September 30, 1997 (this
"AGREEMENT"), among Westell Technologies, Inc. a Delaware corporation
("PARENT"), Kappa Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("MERGER SUB"), and Amati Communications Corporation, a
Delaware corporation (the "COMPANY").
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have approved and declared advisable the merger of Merger Sub with
and into the Company (the "MERGER") upon the terms and subject to the conditions
of this Agreement and in accordance with the General Corporation Law of the
State of Delaware (the "DGCL");
WHEREAS, the respective Boards of Directors of Parent and the Company
have determined that the Merger is in furtherance of and consistent with their
respective long-term business strategies and is in the best interest of their
respective stockholders and Parent has approved this Agreement and the Merger as
the sole stockholder of Merger Sub;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a tax-free reorganization under the provisions of
section 368(a) of the United States Internal Revenue Code of 1986, as amended
(the "CODE"); and
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.1. THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, at the
Effective Time (as defined below), Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the surviving corporation of
the Merger (the "SURVIVING CORPORATION").
SECTION 1.2. EFFECTIVE TIME. No later than three business days after
the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "CERTIFICATE OF MERGER") with the Secretary
of State of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, the DGCL (the date and time of such
filing, or if another date and time is specified in such filing, such specified
date and time, being the "EFFECTIVE TIME"). The closing of the Merger and the
other transactions contemplated hereby (the "Closing") will take place at 10:00
a.m., local time, on a date to be specified by the parties (the "Closing Date"),
at the offices of McDermott, Will & Emery, or at such other location as the
parties hereto mutually agree.
SECTION 1.3. EFFECT OF THE MERGER. At the Effective Time, the effect
of the Merger shall be as provided in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.4. CERTIFICATE OF INCORPORATION; BY-LAWS. At the Effective
Time, the Certificate of Incorporation and the By-laws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation and the By-laws of the Surviving Corporation.
SECTION 1.5. DIRECTORS AND OFFICERS. (a) The directors of Merger
Sub immediately prior to the Effective Time shall be the initial directors of
the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation. The
officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, each to hold office in accordance
with the Certificate of Incorporation and By-laws of the Surviving Corporation.
(b) Parent shall take such action so that, upon the Effective Time,
the persons listed on Schedule 1.5(b) attached hereto, subject to availability,
shall hold the positions with Parent set forth opposite their names on Schedule
1.5(b).
(c) Prior to the Effective Time, Parent shall take such action as may
be necessary such that the Board of Directors of Parent, immediately following
the Effective Time includes Donald Lucas.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.1. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Merger Sub, the
Company or the holders of any of the following securities:
(a) Each share of common stock, par value $0.20 per share, of
the Company ("COMPANY COMMON STOCK") issued and outstanding
immediately prior to the Effective Time (other than any shares of
Company Common Stock to be cancelled pursuant to Section 2.1(b)) shall
be converted, subject to Section 2.2(e), into the right to receive 0.9
of a share of Parent's Class A Common Stock, par value $.01 per share
("PARENT COMMON STOCK") (the "EXCHANGE RATIO"); PROVIDED, HOWEVER,
that, in any event, if between the date of this Agreement and the
Effective Time the outstanding shares of Parent Common Stock or
Company Common Stock shall have been changed into a different number
of shares or a different class, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Exchange Ratio shall be correspondingly
adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares. All such shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each certificate previously representing any such
shares shall thereafter represent the right to receive the shares of
Parent Common Stock into which such Company Common Stock was converted
in the Merger. Certificates previously representing shares of Company
Common Stock shall be exchanged for certificates representing whole
shares of Parent Common Stock issued in consideration therefor upon
the surrender of such certificates in accordance with the provisions
of Section 2.2, without interest. No fractional share of Parent
Common Stock shall be issued, and, in lieu thereof, additional shares
of Parent Common Stock shall be issued pursuant to Section 2.2(e)
hereof.
(b) Each share of Company Common Stock held in the treasury of
the Company and each share of Company Common Stock owned by Parent or
any direct or indirect wholly owned subsidiary of Parent or of the
Company immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof and no payment shall be
made with respect thereto.
(c) Each share of common stock, par value $.01 per share, of
Merger Sub ("MERGER SUB COMMON STOCK") issued and outstanding
immediately prior to the Effective Time shall be converted into and
exchanged for one newly and validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation.
SECTION 2.2. EXCHANGE OF CERTIFICATES. (a) EXCHANGE AGENT. As of
the Effective Time, Parent shall deposit, or shall cause to be deposited, with a
bank or trust company designated by Parent (the "EXCHANGE AGENT"), for the
benefit of the holders of shares of Company Common Stock, for exchange in
accordance with this Article II, through the Exchange Agent, certificates
representing the shares of Parent Common Stock (such certificates for shares of
Parent Common Stock and any dividends or distributions with respect thereto,
being hereinafter referred to as the "EXCHANGE FUND") issuable pursuant to
Section 2.1 in exchange for outstanding shares of Company Common Stock. The
Exchange Agent shall, pursuant to irrevocable instructions, deliver the Parent
Common Stock contemplated to be issued pursuant to Section 2.1 out of the
Exchange Fund. Except as contemplated by Section 2.2(e) hereof, the Exchange
Fund shall not be used for any other purpose.
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, Parent
shall instruct the Exchange Agent to mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "CERTIFICATES") (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 proper
delivery of the Certificates to the Exchange Agent and shall be in customary
form) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of Parent Common
Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, and such other
documents as may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Parent Common Stock which such
holder has the right to receive in respect of the shares of Company Common Stock
formerly represented by such Certificate (after taking into account all shares
of Company Common Stock then held by such holder), and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(c), and
the Certificate so surrendered shall forthwith be cancelled. No interest will
be paid or accrued on any unpaid dividends and distributions payable to holders
of Certificates. In the event of a transfer of ownership of shares of Company
Common Stock which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Parent Common Stock may
be issued to a transferee if the Certificate representing such shares of Company
Common Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the shares of Parent Common Stock and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(c).
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES OF PARENT COMMON
STOCK. No dividends or other distributions declared or made after the Effective
Time with respect to Parent Common Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered Certificate with respect
to the shares of Parent Common Stock represented thereby. Subject to the effect
of escheat, tax or other applicable Laws (as defined below), following surrender
of any such Certificate, there shall be paid to the holder of the certificates
representing whole shares of Parent Common Stock issued in exchange therefor,
without interest, (i) promptly, the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
such whole shares of Parent Common Stock and (ii) at the appropriate payment
date, the amount of dividends or other distributions, with a record date after
the Effective Time but prior to surrender and a payment date occurring after
surrender, payable with respect to such whole shares of Parent Common Stock.
(d) NO FURTHER RIGHTS IN COMPANY COMMON STOCK. All shares of Parent
Common Stock issued upon conversion of the shares of Company Common Stock in
accordance with the terms hereof (including any cash paid pursuant to Section
2.2(c) or (e)) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock.
(e) NO FRACTIONAL SHARES - NEXT WHOLE SHARE. (i) No
certificates or scrip representing fractional shares of Parent Common
Stock shall be issued upon the surrender for exchange of Certificates.
Instead, there shall be issued one whole share of Parent Common Stock
for any remaining fraction of a share of Parent Common Stock which
otherwise would be issuable with respect to a Certificate pursuant to
application of Section 2.1(a).
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund which remains undistributed to the holders of Company Common
Stock immediately prior to the Effective Time for one year after the
Effective Time shall be delivered to Parent, upon demand, and any
holders of Company Common Stock immediately prior to the Effective
Time who have not theretofore complied with this Article II shall
thereafter look only to Parent for the shares of Parent Common Stock
and any dividends or other distributions with respect to Parent Common
Stock to which they are entitled pursuant to Section 2.2(c), in each
case, without any interest thereon.
(g) NO LIABILITY. Neither Parent nor the Company shall be
liable to any holder of shares of Company Common Stock for any shares
of Parent Common Stock (or dividends or distributions with respect
thereto) or cash from the Exchange Fund delivered to a public official
pursuant to any abandoned property, escheat or similar Law.
(h) LOST CERTIFICATES. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed
and, if required by Parent, the posting by such person of a bond, in
such reasonable amount as Parent may direct, as indemnity against any
claim that may be made against Parent with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate the shares of Parent Common Stock and
any dividends or other distributions to which the holders thereof are
entitled pursuant to Section 2.2(c), in each case, without any
interest thereon.
(i) WITHHOLDING. After making diligent efforts to satisfy any
reporting or informational requirements, Parent or the Exchange Agent
shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Company
Common Stock immediately prior to the Effective Time such amounts as
Parent or the Exchange Agent are required to deduct and withhold under
the Code, or any provision of state, local or foreign tax law, with
respect to the making of such payment. To the extent that amounts are
so withheld by Parent or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been
paid to the holder of Company Common Stock in respect of whom such
deduction and withholding was made by Parent or the Exchange Agent.
SECTION 2.3. STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company. From and after the Effective Time, the holders of
certificates representing shares of Company Common Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
shares of Company Common Stock except as otherwise provided herein or by Law.
On or after the Effective Time, any Certificates presented to the Exchange Agent
or Parent for any reason shall be converted into the shares of Parent Common
Stock and any dividends or other distributions to which the holders thereof are
entitled pursuant to Section 2.2(c).
SECTION 2.4. STOCK OPTIONS AND OTHER STOCK AWARDS AND WARRANTS. (a)
Prior to the Effective Time, the Company and Parent shall take such action as
may be necessary to cause each unexpired and unexercised option to purchase
shares of Company Common Stock (each, a "COMPANY OPTION") under the Company's
1981 Stock Option Plan, 1981 Supplemental Stock Option Plan, 1990 Stock Option
Plan, Old Company 1992 Stock Option Plan, 1990 Non-Employee Directors' Stock
Option Plan and 1996 Stock Option Plan, copies which (as amended through the
date hereof) have heretofore been provided to Parent by the Company
(collectively, the "COMPANY STOCK OPTION PLANS"), to be automatically converted
at the Effective Time into an option (a "PARENT OPTION") to purchase a number of
shares of Parent Common Stock equal to the number of shares of Company Common
Stock that could have been purchased under such Company Option multiplied by the
Exchange Ratio (rounded down to the nearest whole number of shares of Parent
Common Stock), at a price per share of Parent Common Stock equal to the per-
share option exercise price specified in the Company Option divided by the
Exchange Ratio (rounded up to the nearest whole cent). Such Parent Option shall
otherwise be subject to the same terms and conditions (including provisions
regarding vesting and the acceleration thereof) as such Company Option. The
date of grant of the substituted Parent Option shall be deemed to be the date on
which the corresponding Company Option was granted. At the Effective Time, (i)
all references in the Company Stock Option Plans and in the related stock option
agreements to the Company shall be deemed to refer to Parent; and (ii) Parent
shall assume all of the Company's obligations with respect to Company Options as
so amended. As promptly as reasonably practicable after the Effective Time,
Parent shall issue to each holder of an outstanding Company Option a document
evidencing the foregoing assumption by Parent. As soon as practicable after the
Effective Time and in no event more than three (3) business days thereafter, to
the extent necessary to provide for registration of shares of Parent Common
Stock subject to such substituted Parent Options, Parent shall file a
registration statement on Form S-8 (or any successor form) with respect to such
shares of Parent Common Stock and shall use its reasonable best efforts to
maintain such registration statement (or any successor form), including the
current status of any related prospectus or prospectuses, for so long as the
Parent Options remain outstanding.
(b) Prior to the Effective Time, the Company and Parent shall take
such action as may be necessary to cause each unexpired and unexercised warrant
to purchase shares of Company Common Stock (each, a "COMPANY WARRANT") to be
automatically converted at the Effective Time into a warrant (a "PARENT
WARRANT") to purchase a number of shares of Parent Common Stock equal to the
number of shares of Company Common Stock that could have been purchased under
such Company Warrant multiplied by the Exchange Ratio (rounded down to the
nearest whole number of shares of Parent Common Stock), at a price per share of
Parent Common Stock equal to the per-share warrant exercise price specified in
the Company Warrant divided by the Exchange Ratio (rounded up to the nearest
whole cent). Such Parent Warrant shall otherwise be subject to the same terms
and conditions (including provisions regarding vesting and the acceleration
thereof) as such Company Warrant. Subject to the adjustment provisions
described above, at the Effective time (i) all references in the Company
Warrants to the Company shall be deemed to refer to Parent and (ii) Parent shall
assume all of the Company's obligations with respect to the Company Warrants as
so amended. As promptly as reasonably practicable after the Effective Time,
Parent shall issue to each holder of an outstanding Company Warrant a document
evidencing the foregoing assumption by Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Letter delivered by the Company to
Parent prior to the execution of this Agreement (the "COMPANY DISCLOSURE
LETTER"), which shall identify exceptions by specific Section references, the
Company hereby represents and warrants to Parent as follows:
SECTION 3.1. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of the
Company and each subsidiary of the Company (collectively, the "COMPANY
SUBSIDIARIES") has been duly organized, and is validly existing and in good
standing, under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Company Material Adverse Effect (as defined below). Each of
the Company and the Company Subsidiaries is duly qualified or licensed 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 business
makes such qualification or licensing or good standing necessary, except for
such failures to be so qualified or licensed and in good standing that would
not, individually or in the aggregate, have a Company Material Adverse Effect.
For purposes of this Agreement, "COMPANY MATERIAL ADVERSE EFFECT" means any
change in or effect on the business of the Company and the Company Subsidiaries
that is materially adverse to the business, financial condition, assets or
results of operations of the Company and the Company Subsidiaries taken as a
whole except for any events, changes or effects substantially resulting from (i)
any material and adverse change in the financial markets; (ii) any political,
economic or financial conditions affecting the industry or business generally or
(iii) the announcement of the transactions contemplated by this Agreement.
Section 3.1(a) of the Company Disclosure Letter sets forth a complete and
correct list of all of the Company Subsidiaries. Except as set forth in Section
3.1(b) of the Company Disclosure Letter, neither the Company nor any Company
Subsidiary holds any interest in a partnership or joint venture of any kind.
SECTION 3.2. CERTIFICATE OF INCORPORATION AND BY-LAWS; CORPORATE BOOKS
AND RECORDS. (a) The copies of the Company's Restated Certificate of
Incorporation (the "COMPANY'S CERTIFICATE") and By-laws, as amended (the
"COMPANY'S BY-LAWS") that are set forth as exhibits to the Company's Form 10-K,
as amended (the "COMPANY'S FORM 10-K"), for the year ended July 31, 1996 are
complete and correct copies thereof. The Company's Certificate and the Company's
By-laws are in full force and effect. The Company is not in violation of any of
the provisions of the Company's Certificate or the Company's By-laws.
(b) In all material respects, the minute books of the Company and the
Company Subsidiaries through July 1, 1997 contain accurate records of all
meetings and accurately reflect all other actions taken by the stockholders, the
Boards of Directors and all committees of the Boards of Directors of the Company
and the Company Subsidiaries since July 30, 1995. Complete and accurate copies
of all such minute books (except for the portions relating to deliberations
regarding the Merger, which were redacted), and of the stock register of the
Company and each Company Subsidiary have been made available by the Company to
Parent.
SECTION 3.3. CAPITALIZATION. The authorized capital stock of the Company
consists of (a) 45,000,000 shares of Company Common Stock and (b) 5,000 shares
of preferred stock, par value $100 per share (the "COMPANY PREFERRED STOCK").
As of September 15, 1997, (i) 19,729,074 shares of Company Common Stock were
issued and outstanding, all of which were validly issued and fully paid,
nonassessable and free of preemptive rights, (ii) no shares of Company Common
Stock were held in the treasury of the Company or by the Company Subsidiaries,
(iii) 4,850,987 shares of Company Common Stock were reserved for issuance upon
exercise of Company Options heretofore granted pursuant to the Company Stock
Option Plans, (iv) 655,731 shares of Company Common Stock were reserved for
issuance under Company Warrants and (v) no shares of Company Preferred Stock
were issued or outstanding. Section 3.3 of the Company Disclosure Letter
identifies, as of the date hereof, (i) the holders of each of the Company
Options, (ii) the number of Company Options vested for each holder, (iii) the
Company Stock Option Plan under which each Company Option was issued, and (iv)
the exercise price of each of the Company Options. All shares of Company Common
Stock subject to issuance as aforesaid, upon issuance prior to the Effective
Time on the terms and conditions specified in the instruments pursuant to which
they are issuable, will be duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Except for shares of Company
Common Stock issuable upon exercise of the Company Options or the Company
Warrants described in Section 3.3 or 3.9 of the Company Disclosure Letter, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary is bound relating to the
issued or unissued capital stock of the Company or any Company Subsidiary, or
securities convertible into or exchangeable for such capital stock, or
obligating the Company or any Company Subsidiary to issue or sell any shares of
capital stock, or securities convertible into or exchangeable for such capital
stock, of, or other equity interests in, the Company or any Company Subsidiary.
No vesting of the Company Options or the Company Warrants shall accelerate by
virtue of the transactions contemplated by this Agreement and the Board of
Directors of the Company has not accelerated any of the Company Options or
Company Warrants. None of the Company Options are "incentive stock options"
within the meaning of Section 422 of the Code. Since September 15, 1997, the
Company has not issued any shares of its capital stock, or securities
convertible into or exchangeable for such capital stock, other than (i) those
shares of capital stock reserved for issuance as set forth in this Section 3.3
or Section 3.3 of the Company Disclosure Letter. Except as set forth in this
Section 3.3 or Section 3.3 of the Company Disclosure Letter, there are no
outstanding contractual obligations of the Company or any Company Subsidiary (i)
restricting the transfer of, (ii) affecting the voting rights of, (iii)
requiring the repurchase, redemption or disposition of, (iv) requiring the
registration for sale of, or (v) granting any preemptive or antidilutive right
with respect to, any shares of Company Common Stock or any capital stock of any
Company Subsidiary. Each outstanding share of capital stock of each Company
Subsidiary is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights and is owned by the Company or another Company
Subsidiary is free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on the Company's or
such other Company Subsidiary's voting rights, charges and other encumbrances of
any nature whatsoever, except where failure to own such shares free and clear
would not, individually or in the aggregate, have a Company Material Adverse
Effect. Except as set forth in Section 3.3 of the Company Disclosure Letter,
there are no material outstanding contractual obligations of the Company or any
Company Subsidiary to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Company Subsidiary or any other
person, other than guarantees by the Company of any indebtedness of any Company
Subsidiary.
SECTION 3.4. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated herein to be consummated by the Company. The execution and delivery
of this Agreement by the Company and the consummation by the Company of such
transactions have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company and no
other stockholder votes are necessary to authorize this Agreement or to
consummate such transactions (other than, with respect to the Merger, the
adoption of this Agreement by the affirmative vote of a majority of the
outstanding shares of Company Common Stock entitled to vote thereon). The Board
of Directors of the Company has directed that this Agreement and the
transactions contemplated hereby be submitted to the Company's stockholders for
approval at a meeting of such stockholders. This Agreement has been duly
authorized and validly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as the enforceability of the
foregoing may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally and by general equitable
principles. The Company has taken all appropriate actions so that the
restrictions on business combinations contained in Section 203 of the DGCL will
not apply with respect to or as a result of the Merger without any further
action on the part of the stockholders or the Board of Directors of the Company.
To the Company's knowledge, no other state takeover statute is applicable to the
Merger.
SECTION 3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) (assuming the
stockholder approval set forth in Section 3.4 is obtained) conflict with or
violate any provision of the Company's Certificate or the Company's By-laws or
any equivalent organizational documents of any Company Subsidiary, (ii) assuming
that all consents, approvals, authorizations and other actions described in
Section 3.5(b) have been obtained and all filings and obligations described in
Section 3.5(b) have been made, conflict with or violate any foreign or domestic
law, statute, code, ordinance, rule, regulation, order, judgment, writ,
stipulation, award, injunction or decree ("LAW") applicable to the Company or
any Company Subsidiary or by which any property or asset of the Company or any
Company Subsidiary is bound or affected or (iii) except as set forth in Section
3.5(a) of the Company Disclosure Letter, result in any breach of, any loss of
any benefit under or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any right
of termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any Company Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, Company Permit (as defined in Section 3.6)
or other instrument or obligation, except, with respect to clauses (ii) and
(iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would neither, individually or in the aggregate, (A) have a
Company Material Adverse Effect nor (B) prevent or materially delay the
performance of this Agreement by the Company.
(b) Except as set forth in Section 3.5(b) of the Company Disclosure Letter,
the execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
domestic or foreign governmental, administrative, judicial or regulatory
authority ("GOVERNMENTAL ENTITY"), except (i) for applicable requirements of the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "EXCHANGE ACT"), the Securities Act of
1933, as amended (together with the rules and regulations promulgated
thereunder, the "SECURITIES ACT"), state securities or "blue sky" laws ("BLUE
SKY LAWS"), Nasdaq National Market ("NASDAQ"), state takeover laws, premerger
notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR ACT"),
filing and recordation of the Certificate of Merger as required by the DGCL and
as otherwise set forth in Section 3.5(b) of the Company Disclosure Letter and
(ii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not (A) prevent or
materially delay consummation of the Merger, (B) otherwise prevent the Company
from performing its material obligations under this Agreement or (C)
individually or in the aggregate, have a Company Material Adverse Effect.
SECTION 3.6. PERMITS; COMPLIANCE. Each of the Company and the Company
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals, clearances and orders of any Governmental Entity necessary for the
Company or any Company Subsidiary to own, lease and operate its properties or to
carry on their respective businesses substantially in the manner described in
the Company SEC Filings (as defined herein) and as it is now being conducted
(the "COMPANY PERMITS"), and all such Company Permits are valid, and in full
force and effect, except where the failure to have, or the suspension or
cancellation of, any of the Company Permits would neither, individually or in
the aggregate, (a) have a Company Material Adverse Effect nor (b) prevent or
materially delay the performance of this Agreement by the Company, and no
suspension or cancellation of any of the Company Permits is pending or, to the
knowledge of the Company, threatened, except where the failure to have, or the
suspension or cancellation of, any of the Company Permits would neither,
individually or in the aggregate, (x) have a Company Material Adverse Effect nor
(y) prevent or materially delay the performance of this Agreement by the
Company. Neither the Company nor any Company Subsidiary is in conflict with, or
in default or violation of, (i) any Law applicable to the Company or any Company
Subsidiary or by which any property, asset or operation of the Company or any
Company Subsidiary is bound or affected or (ii) any Company Permits, except for
any such conflicts, defaults or violations that would neither, individually or
in the aggregate, (A) have a Company Material Adverse Effect nor (B) prevent or
materially delay the performance of this Agreement by the Company.
SECTION 3.7. SEC FILINGS; FINANCIAL STATEMENTS. (a) The Company and its
predecessor have timely filed all registration statements, prospectuses, forms,
reports and documents required to be filed by it under the Securities Act or the
Exchange Act, as the case may be, since July 30, 1995 (collectively, the
"COMPANY SEC FILINGS"). The Company SEC Filings (i) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and (ii) did not at the time they were filed 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 made therein, in the light of the
circumstances under which they were made, not misleading. No Company Subsidiary
is subject to the periodic reporting requirements of the Exchange Act.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Company SEC Filings was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each presented fairly the consolidated
financial position of the Company and the consolidated Company Subsidiaries as
of the respective dates thereof and for the respective periods indicated
therein, except as otherwise noted therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not expected, individually or in the aggregate, to have a Company Material
Adverse Effect). The books and records of the Company and its Subsidiaries have
been, and are being, maintained in accordance with GAAP and any other applicable
legal and accounting requirements.
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Company and the consolidated Company Subsidiaries as of May 3, 1997
included in the Company's Form 10-Q for the quarterly period ended May 3, 1997,
including the notes thereto, neither the Company nor any Company Subsidiary has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise), except for liabilities or obligations incurred in the
ordinary course of business since May 3, 1997 that would neither, individually
or in the aggregate, (i) have a Company Material Adverse Effect nor (ii) prevent
or materially delay the performance of this Agreement by the Company.
SECTION 3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since May 3, 1997,
except as contemplated by or as disclosed in this Agreement, as set forth in
Section 3.8 of the Company Disclosure Letter or as disclosed in any Company SEC
Filing filed prior to the date hereof, the Company and the Company Subsidiaries
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (a) any
Company Material Adverse Effect or an event or development that would,
individually or in the aggregate, have a Company Material Adverse Effect, (b)
any event that could reasonably be expected to prevent or materially delay the
performance of this Agreement by the Company, or (c) any action taken by the
Company or any of the Company Subsidiaries during the period from May 3, 1997
through the date of this Agreement that, if taken during the period from the
date of this Agreement through the Effective Time, would constitute a breach of
Section 5.1.
SECTION 3.9. EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) Section 3.9(a) of the Company Disclosure Letter sets forth a true and
complete list as of the date hereof of each material employee benefit plan,
program, arrangement and contract (including, without limitation, any "employee
benefit plan", as defined in section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or contributed to by the
Company or any Company Subsidiary, or with respect to which the Company or any
Company Subsidiary could incur material liability under section 4069, 4212(c) or
4204 of ERISA (the "COMPANY BENEFIT PLANS"). With respect to each Company
Benefit Plan which is a stock-based plan, the Company has heretofore delivered
to Parent a true and complete copy of such Company Benefit Plan. With respect to
each other Company Benefit Plan, the Company will make available to Parent,
promptly after the date hereof, a true and complete copy of such Company Benefit
Plan and (i) the most recent annual report (Form 5500) filed with the Internal
Revenue Service (the "IRS"), (ii) the most recent actuarial report or valuation
(if any) relating to any Company Benefit Plan subject to Title IV of ERISA and
(iii) the most recent determination letter, if any, issued by the IRS with
respect to any Company Benefit Plan qualified under Section 401(a) of the Code.
(b) With respect to each Company Benefit Plan which is subject to Title
IV of ERISA, (A) the present value of accrued benefits under such Company
Benefit Plan, based upon the actuarial assumptions used for funding purposes in
the most recent actuarial report prepared by such Company Benefit Plan's actuary
with respect to such Company Benefit Plan, did not, as of its latest valuation
date, exceed the then current value of the assets of such Company Benefit Plan
allocable to such accrued benefits, (B) no "reportable event" (within the
meaning of Section 4043 of ERISA) has occurred with respect to any Company
Benefit Plan for which the 30-day notice requirement has not been waived, except
where such reportable event would not have a Company Material Adverse Effect,
and (C) no condition exists which would subject the Company or any Company
Subsidiary to any fine under Section 4071 of ERISA, except where such condition
would not have a Company Material Adverse Effect. No Company Benefit Plan is a
"multiemployer pension plan" (as such term is defined in section 3(37) of
ERISA).
(c) With respect to the Company Benefit Plans, no event has occurred and,
to the knowledge of the Company, there exists no condition or set of
circumstances in connection with which the Company or any Company Subsidiary
could be subject to any liability under the terms of such Company Benefit Plans,
ERISA, the Code or any other applicable Law which, individually or in the
aggregate, would have a Company Material Adverse Effect. Each of the Company
Benefit Plans has been operated and administered in all material respects in
accordance with applicable laws and administrative or governmental rules and
regulations, including, but not limited to, ERISA and the Code, except where a
violation of any such law, rule or regulation would not have a Company Material
Adverse Effect. Each of the Company Benefit Plans intended to be "qualified"
within the meaning of Section 401(a) of the Code has received a favorable
determination letter as to such qualification from the IRS, and no event has
occurred, either by reason of any action or failure to act, which would cause
the loss of any such qualification, except where such loss of qualification
would not have a Company Material Adverse Effect. Except as set forth in Section
3.9(c) of the Company Disclosure Letter, no Company Benefit Plan provides
benefits, including, without limitation, death or medical benefits (whether or
not insured), with respect to current or former employees of the Company or any
Company Subsidiary beyond their retirement or other termination of service,
other than (i) coverage mandated by applicable law, (ii) death benefits or
retirement benefits under any "employee pension plan" (as such term is defined
in Section 3(2) of ERISA), (iii) deferred compensation benefits accrued as
liabilities on the books of the Company or any Company Subsidiary or (iv)
benefits the full cost of which is borne by the current or former employee (or
his beneficiary). All contributions or other amounts payable by the Company or
any Company Subsidiary as of the Effective Time with respect to each Company
Benefit Plan in respect of current or prior plan years have been paid or accrued
in accordance with GAAP and Section 412 of the Code.
(d) There are no significant controversies pending or, to the knowledge of
the Company, threatened between the Company or the Company Subsidiaries and any
representatives of any of their employees and, to the knowledge of the Company,
there are no material organizational efforts presently being made involving any
of the presently unorganized employees of the Company or the Company
Subsidiaries that, individually or in the aggregate, would have a Company
Material Adverse Effect.
(e) Except as set forth in Section 3.9(e) of the Company Disclosure
Letter, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or any
employee of the Company or any of its affiliates from the Company or any of its
affiliates under any Company Benefit Plan or otherwise, (ii) materially increase
any benefits otherwise payable under any Company Benefit Plan or (iii) result in
any acceleration of the time of payment or vesting of any material benefits.
SECTION 3.10. TAX MATTERS. Neither the Company nor, to the knowledge of
the Company, any of its affiliates has taken or agreed to take any action that
would prevent the Merger from constituting a transaction qualifying under
section 368(a) of the Code. The Company is not aware of any agreement, plan or
other circumstance that would prevent the Merger from so qualifying under
section 368(a) of the Code and knows of no reason why it will be unable to
deliver at the Closing a certificate in form sufficient for the counsel to the
Company and counsel to Parent to render the opinions required by Section 7.1(g)
hereof.
SECTION 3.11. CONTRACTS; DEBT INSTRUMENTS. Except as disclosed in or
attached as exhibits to the Company SEC Filings or as disclosed in Section 3.11
of the Company Disclosure Letter, neither the Company nor any of the Company
Subsidiaries is a party to or bound by any contract, arrangement, commitment or
understanding (whether written or oral) (i) as of the date hereof, which
requires expenditures in excess of $1,000,000 or which requires annual
expenditures in excess of $500,000 and is not cancelable within one year by the
Company, that has not been filed or incorporated by reference in the Company SEC
Filings, (ii) which contains any material non-compete provisions with respect to
any line of business or geographic area in which business is conducted with
respect to the Company or any of the Company Subsidiaries or which restricts the
conduct of any line of business by the Company or any of the Company
Subsidiaries or any geographic area in which the Company or any of the Company
Subsidiaries may conduct business, in each case in any material respect, (iii)
which are terminable by the other party thereto which if so terminated would
result in a Company Material Adverse Effect, or (iv) which would prohibit or
materially delay the consummation of the Merger or any of the transactions
contemplated by this Agreement. The Company has previously made available to
Parent true and correct copies of all such agreements and of all employment and
deferred compensation agreements with directors, executive officers and key
employees, and material agreements with consultants, which are in writing and to
which the Company or any of the Company Subsidiaries is a party. Each contract,
arrangement, commitment or understanding of the type described in this Section
3.11, whether or not set forth in Section 3.11 of the Company Disclosure Letter,
is referred to herein as a "COMPANY MATERIAL CONTRACT." Each Company Material
Contract is valid and binding on the Company or any of the Company Subsidiaries,
as applicable, and in full force and effect, and the Company and each of the
Company Subsidiaries have in all material respects performed all obligations
required to be performed by them to date under each Company Material Contract,
except where such noncompliance, individually or in the aggregate, would not
have a Company Material Adverse Effect. Neither the Company nor any Company
Subsidiary knows of, or has received notice of, any violation or default under
(nor does there exist any condition which with the passage of time or the giving
of notice would cause such a violation of or default under) any Company Material
Contract or any other loan or credit agreement, note, bond, mortgage, indenture
or lease, or any other contract, agreement, arrangement or understanding to
which it is a party or by which it or any of its properties or assets is bound,
except for violations or defaults that would not, individually or in the
aggregate, result in a Company Material Adverse Effect. Set forth in Section
3.11 of the Company Disclosure Letter is a description, including amounts as of
the date hereof, of all indebtedness of the Company and the Company Subsidiaries
other than trade payables and accruals. Section 3.11 of the Company Disclosure
Letter also sets forth a summary of all DMT licenses in which the Company is a
licensee identifying (i) the parties, (ii) the royalties and basis thereof
receivable by the Company as a licensor, (iii) the royalties and basis thereof
payable by the Company to third parties in respect of any sales by the licensee,
(iv) whether for each license, on a current basis, the amounts receivable by the
Company under (ii) above exceed the amounts payable by the Company under
subsection (iii) above and (v) amounts which would be owing to licensors with
respect to a sale by the Company of products incorporating licensed products
purchased from sublicensees.
SECTION 3.12. LITIGATION. Except as disclosed in the Company SEC Filings or
in Section 3.12 of the Company Disclosure Letter, there is no suit, claim,
action, proceeding or investigation pending or, to the knowledge of the Company,
threatened in writing against the Company or any Company Subsidiary by or before
any Governmental Entity that (a) individually or in the aggregate, is reasonably
likely to have a Company Material Adverse Effect or (b) challenges the validity
or propriety, or seeks to prevent consummation of, the transactions contemplated
by this Agreement. Except as disclosed in the Company SEC Filings or in Section
3.12 of the Company Disclosure Letter, neither the Company nor any Company
Subsidiary is subject to any outstanding order, writ, injunction or decree which
has had or, insofar as can be reasonably foreseen, individually or in the
aggregate, would have a Company Material Adverse Effect.
SECTION 3.13. ENVIRONMENTAL MATTERS. Except as disclosed in the Company SEC
Filings or in Section 3.13 of the Company Disclosure Letter or as would not,
individually or in the aggregate, have a Company Material Adverse Effect:
(a) the Company and the Company Subsidiaries (i) are in compliance with
all, and are not subject to any asserted liability or, to the Company's
knowledge, any liability, in each case with respect to any, applicable
Environmental Laws (as defined below), (ii) hold or have applied for all
Environmental Permits (as defined below) and (iii) are in compliance with their
respective Environmental Permits;
(b) neither the Company nor any Company Subsidiary has received any written
notice, demand, letter, claim or request for information alleging that the
Company or any of its Subsidiaries may be in violation of, or liable under, any
Environmental Law;
(c) neither the Company nor any Company Subsidiary (i) has entered into
or agreed to any consent decree or order or is subject to any judgment, decree
or judicial order relating to compliance with Environmental Laws, Environmental
Permits or the investigation, sampling, monitoring, treatment, remediation,
removal or cleanup of Hazardous Materials (as defined below) and, to the
knowledge of the Company, no investigation, litigation or other proceeding is
pending or threatened in writing with respect thereto, or (ii) is an indemnitor
in connection with any threatened or asserted claim by any third-party
indemnitee for any liability under any Environmental Law or relating to any
Hazardous Materials; and
(d) none of the real property owned or leased by the Company or any Company
Subsidiary is listed or, to the knowledge of the Company, proposed for listing
on the "National Priorities List" under CERCLA, as updated through the date
hereof, or any similar state or foreign list of sites requiring investigation or
cleanup.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended as of the date hereof.
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign statute,
law, ordinance, regulation, rule, code, treaty, writ or order and any
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree, judgment, stipulation,
injunction, permit, authorization, policy, opinion, or agency requirement, in
each case having the force and effect of law, relating to the pollution,
protection, investigation or restoration of the environment, health and safety
or natural resources, including, without limitation, those relating to the use,
handling, presence, transportation, treatment, storage, disposal, release,
threatened release or discharge of Hazardous Materials or noise, odor, wetlands,
pollution, contamination or any injury or threat of injury to persons or
property.
"ENVIRONMENTAL PERMITS" means any permit, approval, identification number,
license and other authorization required under any applicable Environmental Law.
"HAZARDOUS MATERIALS" means (a) any petroleum, petroleum products, by-
products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls or (b) any chemical, material or other
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.
SECTION 3.14. TRADEMARKS, PATENTS AND COPYRIGHTS. The Company has
previously given to Parent detailed information (including, where applicable,
federal registration numbers and dates of registrations or applications for
registration) concerning the following: (i) all of the Company's and the
Company Subsidiaries' trademarks, trademark rights, service marks, trade names,
and other trade rights, indicating which are registered and which are not,
including all pending applications for any registrations thereof, and all
patents, patent rights and copyrights used or proposed to be used by the Company
in its business and all pending applications therefore; (ii) all computer
software presently used by the Company which has been purchased or licensed from
outside parties with a purchase price or license fee in excess of $5,000; and
(iii) all other trade secrets, mailing lists, know-how, designs, plans,
specifications and other intellectual property rights of the Company (whether or
not registered or registrable) (collectively, "COMPANY INTELLECTUAL PROPERTY").
Section 3.14 of the Company Disclosure Letter identifies (i) each patent or
registration which has been issued and which has not expired or lapsed to the
Company or any of the Company Subsidiaries with respect to any Company
Intellectual Property, (ii) each pending patent application or application for
registration which the Company or any of the Company Subsidiaries has made with
respect to any Company Intellectual Property, and (iii) any Company
Intellectual Property that any third party owns and that the Company or any of
the Company Subsidiaries use or propose to use in its business (including any
marketing rights granted to the Company or any of the Company Subsidiaries under
patents owned or licensed by third parties). Except as set forth in Section
3.14 of the Company Disclosure Letter, (i) the Company or one of the Company
Subsidiaries solely owns or is in sole and exclusive possession of (except to
the extent disclosed) adequate licenses or other legal rights to use all Company
Intellectual Property now used or held for use in connection with the business
as currently conducted or as contemplated to be conducted, (ii) neither the
Company nor any of the Company Subsidiaries has received notice or has any
reason to believe that such party's use of any of the Company Intellectual
Property is interfering with, infringing upon or otherwise violating the rights
of any third party in or to such Company Intellectual Property or that any of
such Company Intellectual Property was misappropriated from a third party, and
(iii) neither the Company nor any of the Company Subsidiaries has disclosed any
of the Company Intellectual Property other than in a manner reasonably necessary
for the operation of their business. None of the Company or any of the Company
Subsidiaries have granted any licenses of or other rights to use any of the
Company Intellectual Property to any third party. The Company Intellectual
Property comprises all of the intellectual property rights that are in the
aggregate necessary in any material respect for the operation of its business as
it is presently conducted.
SECTION 3.15. TAXES. (a) Except for such matters as would not have a
Company Material Adverse Effect, (i) the Company and the Company Subsidiaries
have timely filed or will timely file all returns and reports required to be
filed by them with any taxing authority with respect to Taxes (as defined below)
for any period ending on or before the Effective Time, taking into account any
extension of time to file granted to or obtained on behalf of the Company and
the Company Subsidiaries, (ii) all Taxes that are due prior to the Effective
Time have been paid or will be paid (other than Taxes which (1) are not yet
delinquent or (2) are being contested in good faith and have not been finally
determined), (iii) as of the date hereof, no deficiency for any Tax has been
asserted or assessed by a taxing authority against the Company or any of the
Company Subsidiaries which deficiency has not been paid other than any
deficiency being contested in good faith and (iv) the Company and the Company
Subsidiaries have provided adequate reserves (in accordance with GAAP) in their
financial statements for any Taxes that have not been paid, whether or not shown
as being due on any returns. As used in this Agreement, "TAXES" shall mean any
and all taxes, fees, levies, duties, tariffs, imposts and other charges of any
kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any Governmental
Entity or taxing authority, including, without limitation: taxes or other
charges on or with respect to income, franchise, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation or net worth; taxes
or other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value-added or gains taxes; license, registration and documentation
fees; and customers' duties, tariffs and similar charges.
(b) There are no material disputes pending, or claims asserted in writing
for, Taxes or assessments upon the Company or any of its Subsidiaries, nor has
the Company or any of its Subsidiaries been requested in writing to give any
currently effective waivers extending the statutory period of limitation
applicable to any federal or state income tax return for any period which
disputes, claims, assessments or waivers are reasonably likely to have a Company
Material Adverse Effect.
(c) There are no Tax liens upon any property or assets of the Company or
any of the Company Subsidiaries except liens for current Taxes not yet due and
except for liens which have not had and are not reasonably likely to have a
Company Material Adverse Effect.
(d) Neither the Company nor any of its Subsidiaries has been required to
include in income any adjustment pursuant to Section 481 of the Code by reason
of a voluntary change in accounting method initiated by the Company or any of
its Subsidiaries, and the IRS has not initiated or proposed any such adjustment
or change in accounting method, in either case which adjustment or change has
had or is reasonably likely to have a Company Material Adverse Effect.
(e) Except as set forth in the financial statements described in Section
3.7, neither the Company nor any of its Subsidiaries has entered into a
transaction which is being accounted for under the installment method of Section
453 of the Code, which would be reasonably likely to have a Company Material
Adverse Effect. No compensation paid or payable by the Company is subject to
Section 162(m) of the Code.
SECTION 3.16. OPINION OF FINANCIAL ADVISOR. Deutsche Morgan Grenfell Inc.
has delivered to the Board of Directors of the Company its written opinion dated
the date hereof, a copy of which opinion has been delivered to Parent, that, as
of such date, the Exchange Ratio is fair from a financial point of view to the
holders of Company Common Stock.
SECTION 3.17. VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class or series of capital stock of the Company necessary to
approve the transactions contemplated by this Agreement.
SECTION 3.18. BROKERS. No broker, finder or investment banker (other than
Deutsche Morgan Grenfell Inc.) is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger based upon arrangements made by
or on behalf of the Company or any Company Subsidiary. Section 3.18 of the
Company Disclosure Letter sets forth the fee payable to Deutsche Morgan Grenfell
Inc. in connection with the Merger and when such fee is payable. So long as
this Agreement has not been terminated and after the Effective Time, the Company
will not be obligated to Deutsche Morgan Grenfell Inc. or any other broker with
regard to any transaction which may be entered into after the date hereof.
SECTION 3.19. INSURANCE. The Company maintains insurance coverage with
reputable insurers in such amounts and covering such risks as are in accordance
with normal industry practice for companies engaged in businesses similar to
that of the Company (taking into account the cost and availability of such
insurance).
SECTION 3.20. TITLE TO ASSETS; LIENS. The Company and each of the Company
Subsidiaries has good and marketable title in fee simple to all its real
property and good title to all its leasehold interests and other properties, as
reflected in the most recent balance sheet included in the Company SEC Filings,
except for properties and assets that have been disposed of in the ordinary
course of business since the date of such balance sheet, free and clear of all
mortgages, liens, pledges, charges or encumbrances of any nature whatsoever,
except (i) the lien for current taxes, payments of which are not yet delinquent,
(ii) such imperfections in title and easements and encumbrances, if any, as are
not substantial in character, amount or extent and do not materially detract
from the value, or interfere with the present use of the property subject
thereto or affected thereby, or otherwise materially impair the Company's
business operations (in the manner presently carried on by the Company) or (iii)
as disclosed in the Company SEC Filings, and except for such matters, which
individually or in the aggregate, could not reasonably be expected to have a
Company Material Adverse Effect. All leases under which the Company leases any
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 default or event which with notice or lapse of time or both
would become a default which could reasonably be expected to have a Company
Material Adverse Effect. Section 3.20 of the Company Disclosure Letter sets
forth all liens and securities interests granted by the Company or any of the
Company Subsidiaries to third parties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Except as set forth in the Disclosure Letter delivered by Parent and Merger
Sub to the Company prior to the execution of this Agreement (the "PARENT
DISCLOSURE LETTER"), which shall identify exceptions by specific Section
references, Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company as follows:
SECTION 4.1. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of
Parent, Merger Sub and each other subsidiary of Parent (collectively, the
"PARENT SUBSIDIARIES") has been duly organized, and is validly existing and in
good standing, under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Parent Material Adverse Effect (as defined below). Each of
Parent, Merger Sub and the other Parent Subsidiaries is duly qualified or
licensed 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
business makes such qualification or licensing or good standing necessary,
except for such failures to be so qualified or licensed and in good standing
that would not, individually or in the aggregate, have a Parent Material Adverse
Effect. For purposes of this Agreement, "PARENT MATERIAL ADVERSE EFFECT" means
any change in or effect on the business of Parent, Merger Sub and the Parent
Subsidiaries that is materially adverse to the business, financial condition,
assets or results of operations of Parent and the Parent Subsidiaries taken as a
whole except for any events, changes or effects substantially resulting from
(i) any material and adverse change in the financial markets; (ii) any
political, economic or financial conditions affecting the industry or business
generally or (iii) the announcement of the transactions contemplated by this
Agreement. Section 4.1(a) of the Parent Disclosure Letter sets forth a complete
and correct list of all of the Parent Subsidiaries. Except as set forth in
Section 4.1(b) of the Parent Disclosure Letter, neither Parent nor any Parent
Subsidiary holds any interest in a partnership or joint venture of any kind.
SECTION 4.2. CERTIFICATE OF INCORPORATION AND BY-LAWS; CORPORATE BOOKS AND
RECORDS. (a) The copies of the Parent's Amended and Restated Certificate of
Incorporation (the "PARENT'S CERTIFICATE") and the Parent's Amended and Restated
By-laws that are set forth as exhibits to Parent's Form 10-K for the year ended
March 31, 1997 are complete and correct copies thereof. Parent has heretofore
furnished to the Company a complete and correct copy of the Certificate of
Incorporation and By-Laws, as amended or restated, of Merger Sub. Such
Certificates of Incorporation and By-laws are in full force and effect. Neither
Parent nor Merger Sub is in violation of any of the provisions of its
Certificate of Incorporation or By-laws.
(b) In all material respects, the minute books of Parent and the Parent
Subsidiaries through July 1, 1997 contain accurate records of all meetings and
accurately reflect all other actions taken by the stockholders, the Boards of
Directors and all committees of the Boards of Directors of Parent and the Parent
Subsidiaries since June 30, 1995. Complete and accurate copies of all such
minute books (except for portions relating to deliberations regarding the
Merger, which were redacted), and of the stock register of Parent and each
Parent Subsidiary have been made available by Parent to the Company.
SECTION 4.3. CAPITALIZATION. The authorized capital stock of Parent
consists of (a) 43,500,000 shares of Parent Class A Common Stock, (b) 25,000,000
shares of Parent Class B Common Stock and (c) 1,000,000 shares of preferred
stock, par value $.01 per share (the "PARENT PREFERRED STOCK"). As of September
15, 1997, (i) 15,100,410 shares of Parent Class A Common Stock and 21,245,913
shares of Parent Class B Common Stock were issued and outstanding, all of which
were validly issued and fully paid, nonassessable and free of preemptive rights,
(ii) no shares of Parent Class A Common Stock or Parent Class B Common Stock
were held in the treasury of Parent or by the Parent Subsidiaries, (iii)
2,658,420 shares of Parent Class A Common Stock were reserved for issuance upon
exercise of Parent Options heretofore granted pursuant to Parent's 1995 Stock
Incentive Plan (the "PARENT STOCK OPTION PLAN"), (iv) 195,351 shares of Parent
Class A Common Stock were reserved for issuance under the Parent's Employee
Stock Purchase Plan, (v) 21,245,913 shares of Parent Class A Common Stock were
reserved for issuance upon conversion of Parent Class B Stock and (vii) no
shares of Parent Preferred Stock were issued or outstanding. Section 4.3 of the
Parent Disclosure Letter identifies, as of the date hereof, (i) the holders of
each of the Parent Options, (ii) the number of Parent Options vested for each
holder, (iii) the Parent Stock Option Plan under which each Parent Option was
issued, and (iv) the exercise price of each of the Parent Options. All shares
of Parent Class A Common Stock and Parent Class B Common Stock subject to
issuance as aforesaid, upon issuance prior to the Effective Time on the terms
and conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. Except for shares of Parent Class A Common Stock issuable
upon exercise of Parent Options described in Section 4.3 or 4.9 of the Parent
Disclosure Letter (including, but not limited to, the Parent's Employee Stock
Purchase Plan), there are, on the date hereof, no options, warrants or other
rights, agreements, arrangements or commitments of any character to which the
Parent or any Parent Subsidiary is a party or by which the Parent or any Parent
Subsidiary is bound relating to the issued or unissued capital stock of the
Parent or any Parent Subsidiary, or securities convertible into or exchangeable
for such capital stock, or obligating the Parent or any Parent Subsidiary to
issue or sell any shares of capital stock, or securities convertible into or
exchangeable for such capital stock, of, or other equity interests in, the
Parent or any Parent Subsidiary. No vesting of any Parent Options shall
accelerate by virtue of the transactions contemplated by this Agreement. None
of the Parent Options are "incentive stock options" within the meaning of
Section 422 of the Code. Except as set forth in this Section 4.3 or Section 4.3
of the Parent Disclosure Letter, there are, on the date hereof, no outstanding
contractual obligations of the Parent or any Parent Subsidiary (i) restricting
the transfer of, (ii) affecting the voting rights of, (iii) requiring the
repurchase, redemption or disposition of, (iv) requiring the registration for
sale of, or (v) granting any preemptive or antidilutive right with respect to,
any shares of Parent Class A Common Stock, Parent Class B Common Stock or any
capital stock of any Parent Subsidiary. Each outstanding share of capital stock
of each Parent Subsidiary is duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights and is owned by the Parent or
another Parent Subsidiary is free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
the Parent's or such other Parent Subsidiary's voting rights, charges and other
encumbrances of any nature whatsoever, except where failure to own such shares
free and clear would not, individually or in the aggregate, have a Parent
Material Adverse Effect. Except as set forth in Section 4.3 of the Parent
Disclosure Letter, as of the date hereof, there are no material outstanding
contractual obligations of the Parent or any Parent Subsidiary to provide funds
to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, any Parent Subsidiary or any other person, other than guarantees
by the Parent of any indebtedness of any Parent Subsidiary.
SECTION 4.4. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated herein to be consummated by Parent and Merger Sub.
Each of (i) the execution and delivery of this Agreement by each of Parent and
Merger Sub and the consummation by Parent and Merger Sub of such transactions,
(ii) an amendment to the Certificate of Incorporation of Parent to increase the
number of authorized shares of Parent Class A Common Stock to 63,000,000 (the
"ARTICLES AMENDMENT"), and (iii) an amendment to the Stock Incentive Plan of
Parent to increase by 4,500,900 the number of shares available for issuance
thereunder (the "STOCK PLAN AMENDMENT"), have been duly and validly authorized
by all necessary corporate action and no other corporate proceedings on the part
of Parent and Merger Sub are necessary to authorize this Agreement or to
consummate such transactions other than, with respect to (a) the adoption of the
Articles Amendment by the affirmative vote of a majority of the votes cast, (b)
the adoption of the Stock Plan Amendment by the affirmative vote of a majority
of the votes entitled to be cast and (c) the approval of the issuance of Parent
Class A Common Stock pursuant to the Merger by the affirmative vote of a
majority of the votes cast, in each case, by the holders of outstanding shares
of Parent Class A Common Stock and Class B Common Stock voting together as a
class. The Board of Directors of Parent has directed that the Articles
Amendment and the Stock Plan Amendment be submitted to Parent's shareholders for
approval at a meeting of such shareholders. This Agreement has been duly
authorized and validly executed and delivered by Parent and Merger Sub and
constitutes a legal, valid and binding obligation of Parent and Merger Sub,
enforceable against Parent and Merger Sub in accordance with its terms, except
as the enforceability of the foregoing may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by general equitable principles. To Parent's knowledge, no state takeover
statute is applicable to the Merger.
SECTION 4.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The execution
and delivery of this Agreement by Parent and Merger Sub do not, and the
performance of this Agreement by Parent and Merger Sub will not, (i) (assuming
the shareholder approval set forth in Section 4.4 is obtained) conflict with or
violate any provision of the Certificate of Incorporation or By-laws of Parent
or Merger Sub or any equivalent organizational documents of any Parent
Subsidiary, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 4.5(b) have been obtained and all filings and
obligations described in Section 4.5(b) have been made, conflict with or violate
any foreign or domestic Law applicable to Parent, Merger Sub or any Parent
Subsidiary or by which any property or asset of Parent, Merger Sub or any Parent
Subsidiary is bound or affected or (iii) except as set forth in Section 4.5(a)
of the Parent Disclosure Letter, result in any breach of, any loss of any
benefit under or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of Parent,
Merger Sub or any Parent Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, Parent Permit (as defined in
Section 4.6), other instrument or obligation, except, with respect to clauses
(ii) and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would neither, individually or in the aggregate, (A) have a
Parent Material Adverse Effect nor (B) prevent or materially delay the
performance of this Agreement by Parent and/or Merger Sub.
(b) Except as set forth in Section 4.5(b) of the Parent Disclosure Letter,
the execution and delivery of this Agreement by Parent and Merger Sub do not,
and the performance of this Agreement by Parent and Merger Sub will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any domestic or foreign Governmental Entity, except (i) for
applicable requirements of the Exchange Act, the Securities Act, Blue Sky Laws,
Nasdaq, state takeover laws, premerger notification requirements of the HSR Act,
filing and recordation of the Certificate of Merger as required by the DGCL and
as otherwise set forth in Section 4.5(b) of the Parent Disclosure Letter and
(ii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not (A) prevent or
materially delay consummation of the Merger, (B) otherwise prevent Parent and/or
Merger Sub from performing its material obligations under this Agreement or (C)
individually or in the aggregate, have a Parent Material Adverse Effect.
SECTION 4.6. PERMITS; COMPLIANCE. Each of Parent and the Parent
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals, clearances and orders of any Governmental Entity necessary for Parent
or any Parent Subsidiary to own, lease and operate its properties or to carry on
their respective businesses substantially in the manner described in the Parent
SEC Filings (as defined herein) and as it is now being conducted (the "PARENT
PERMITS"), and all such Parent Permits are valid, and in full force and effect,
except where the failure to have, or the suspension or cancellation of, any of
the Parent Permits would neither, individually or in the aggregate, (a) have a
Parent Material Adverse Effect nor (b) prevent or materially delay the
performance of this Agreement by Parent, and no suspension or cancellation of
any of the Parent Permits is pending or, to the knowledge of Parent, threatened,
except where the failure to have, or the suspension or cancellation of, any of
the Parent Permits would neither, individually or in the aggregate, (x) have a
Parent Material Adverse Effect nor (y) prevent or materially delay the
performance of this Agreement by Parent. Neither Parent nor any Parent
Subsidiary is in conflict with, or in default or violation of, (i) any Law
applicable to Parent or any Parent Subsidiary or by which any property, asset or
operation of Parent or any Parent Subsidiary is bound or affected or (ii) any
Parent Permits, except for any such conflicts, defaults or violations that would
neither, individually or in the aggregate, (A) have a Parent Material Adverse
Effect nor (B) prevent or materially delay the performance of this Agreement by
Parent.
SECTION 4.7. SEC FILINGS; FINANCIAL STATEMENTS. (a) Parent has timely filed
all registration statements, prospectuses, forms, reports and documents required
to be filed by it under the Securities Act or the Exchange Act, as the case may
be, since June 30, 1995 (collectively, the "PARENT SEC FILINGS"). The Parent SEC
Filings (i) were prepared in accordance with the requirements of the Securities
Act or the Exchange Act, as the case may be, and (ii) did not at the time they
were filed 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 made therein, in the light of the circumstances under which they were
made, not misleading. No Parent Subsidiary is subject to the periodic reporting
requirements of the Exchange Act.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Parent SEC Filings was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto) and each presented
fairly the consolidated financial position of Parent and the consolidated Parent
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments which were
not and are not expected, individually or in the aggregate, to have a Parent
Material Adverse Effect). The books and records of Parent and its Subsidiaries
have been, and are being, maintained in accordance with GAAP and any other
applicable legal and accounting requirements.
(c) Except as and to the extent set forth on the consolidated balance sheet
of Parent and the consolidated Parent Subsidiaries as of March 31, 1997 included
in Parent's Form 10-K for the year ended March 31, 1997, including the notes
thereto, neither Parent nor any Parent Subsidiary has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise),
except for liabilities or obligations incurred in the ordinary course of
business since March 31, 1997 that would neither, individually or in the
aggregate, (i) have a Parent Material Adverse Effect nor (ii) prevent or
materially delay the performance of this Agreement by Parent.
SECTION 4.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. From June 30, 1997
through the date hereof, except as contemplated by or as disclosed in this
Agreement, as set forth in Section 4.8 of the Parent Disclosure Letter or as
disclosed in any Parent SEC Filing filed prior to the date hereof, Parent and
the Parent Subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since June 30, 1997,
there has not been (a) any Parent Material Adverse Effect or an event or
development that would, individually or in the aggregate, have a Parent Material
Adverse Effect, (b) any event that could reasonably be expected to prevent or
materially delay the performance of this Agreement by Parent or (c) any action
taken by Parent or any of the Parent Subsidiaries during the period from June
30, 1997 through the date of this Agreement that, if taken during the period
from the date of this Agreement through the Effective Time, would constitute a
breach of Section 5.2.
SECTION 4.9. EMPLOYEE BENEFIT PLANS; LABOR MATTERS. (a) Section 4.9(a) of
the Parent Disclosure Letter sets forth a true and complete list as of the date
hereof of each material employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
section 3(3) of ERISA, maintained or contributed to by Parent or any Parent
Subsidiary, or with respect to which Parent or any Parent Subsidiary could incur
material liability under section 4069, 4212(c) or 4204 of ERISA (the "PARENT
BENEFIT PLANS"). With respect to each Parent Benefit Plan which is a stock-based
plan, Parent has heretofore delivered to the Company a true and complete copy of
such Parent Benefit Plan. With respect to each other Parent Benefit Plan, Parent
will make available to the Company, promptly after the date hereof, a true and
complete copy of such Parent Benefit Plan and (i) the most recent annual report
(Form 5500) filed with the IRS, (ii) the most recent actuarial report or
valuation (if any) relating to any Parent Benefit Plan subject to Title IV of
ERISA and (iii) the most recent determination letter, if any, issued by the IRS
with respect to any Parent Benefit Plan qualified under Section 401(a) of the
Code.
(b) Except as set forth in Schedule 4.9(b) of the Parent Disclosure Letter,
with respect to each Parent Benefit Plan which is subject to Title IV of ERISA,
(A) the present value of accrued benefits under such Parent Benefit Plan, based
upon the actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such Parent Benefit Plan's actuary with respect to
such Parent Benefit Plan, did not, as of its latest valuation date, exceed the
then current value of the assets of such Parent Benefit Plan allocable to such
accrued benefits, (B) no "reportable event" (within the meaning of Section 4043
of ERISA) has occurred with respect to any Parent Benefit Plan for which the 30-
day notice requirement has not been waived, except where such reportable event
would not have a Parent Material Adverse Effect, and (C) no condition exists
which would subject Parent or any ERISA Affiliate to any fine under Section 4071
of ERISA, except where such condition would not have a Parent Material Adverse
Effect. Except as set forth in Section 4.9(b) of the Parent Disclosure Letter,
no Parent Benefit Plan is a "multiemployer pension plan" (as such term is
defined in section 3(37) of ERISA).
(c) With respect to the Parent Benefit Plans, no event has occurred and, to
the knowledge of Parent, there exists no condition or set of circumstances in
connection with which Parent or any Parent Subsidiary could be subject to any
liability under the terms of such Parent Benefit Plans, ERISA, the Code or any
other applicable Law which, individually or in the aggregate, would have a
Parent Material Adverse Effect. Each of the Parent Benefit Plans has been
operated and administered in all material respects in accordance with applicable
laws and administrative or governmental rules and regulations, including, but
not limited to, ERISA and the Code, except where a violation of any such law,
rule or regulation would not have a Parent Material Adverse Effect. Each of the
Parent Benefit Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter as to such
qualification from the IRS, and no event has occurred, either by reason of any
action or failure to act, which would cause the loss of any such qualification,
except where such loss of qualification would not have a Parent Material Adverse
Effect. Except as set forth on Section 4.9(c) of the Parent Disclosure Letter,
no Parent Benefit Plan provides benefits, including, without limitation, death
or medical benefits (whether or not insured), with respect to current or former
employees of Parent or any Parent Subsidiary beyond their retirement or other
termination of service, other than (i) coverage mandated by applicable law, (ii)
death benefits or retirement benefits under any "employee pension plan" (as such
term is defined in Section 3(2) of ERISA), (iii) deferred compensation benefits
accrued as liabilities on the books of Parent or any Parent Subsidiary, or (iv)
benefits the full cost of which is borne by the current or former employee (or
his beneficiary). All contributions or other amounts payable by Parent or any
Parent Subsidiary as of the Effective Time with respect to each Parent Benefit
Plan in respect of current or prior plan years have been paid or accrued in
accordance with GAAP and Section 412 of the Code.
(d) There are no significant controversies pending or, to the knowledge of
the Parent, threatened between the Parent or the Parent Subsidiaries and any
representatives of any of their employees and, to the knowledge of the Parent,
there are no material organizational efforts presently being made involving any
of the presently unorganized employees of the Parent or the Parent Subsidiaries
that, individually or in the aggregate, would have a Parent Material Adverse
Effect.
(e) Except as set forth in Section 4.9(e) of the Parent Disclosure Letter,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any material payment
(including, without limitation, severance, unemployment compensation, golden
parachute or otherwise) becoming due to any director or any employee of Parent
or any of its affiliates from Parent or any of its affiliates under any Parent
Benefit Plan or otherwise, (ii) materially increase any benefits otherwise
payable under any Parent Benefit Plan or (iii) result in any acceleration of the
time of payment or vesting of any material benefits.
SECTION 4.10. TAX MATTERS. Neither Parent nor, to the knowledge of Parent,
any of its affiliates has taken or agreed to take any action that would prevent
the Merger from constituting a transaction qualifying under section 368(a) of
the Code. Parent is not aware of any agreement, plan or other circumstance that
would prevent the Merger from so qualifying under section 368(a) of the Code and
knows of no reason why it will be unable to deliver at the Closing a certificate
in form sufficient for the counsel to the Company and counsel to Parent to
render the opinions required by Section 7.1(g) hereof.
SECTION 4.11. CONTRACTS; DEBT INSTRUMENTS. Except as disclosed in or
attached as exhibits to the Parent SEC Filings or as disclosed in Section 4.11
of the Parent Disclosure Letter, neither Parent nor any of the Parent
Subsidiaries is a party to or bound by any contract, arrangement, commitment or
understanding (whether written or oral) (i) as of the date hereof, which
requires expenditures in excess of $5,000,000 or which requires annual
expenditures in excess of $2,500,000 and is not cancelable within one year by
the Parent, that has not been filed or incorporated by reference in the Parent
SEC Filings, (ii) as of the date hereof, which contains any material non-compete
provisions with respect to any line of business or geographic area in which
business is conducted with respect to Parent or any of the Parent Subsidiaries
or which restricts the conduct of any line of business by Parent or any of the
Parent Subsidiaries or any geographic area in which Parent or any of the Parent
Subsidiaries may conduct business, in each case in any material respect, (iii)
which are terminable by the other party thereto which if so terminated would
result in a Parent Material Adverse Effect, or (iv) which would prohibit or
materially delay the consummation of the Merger or any of the transactions
contemplated by this Agreement. Parent has previously made available to the
Company true and correct copies of all such agreements and of all employment and
deferred compensation agreements with directors, executive officers and key
employees, and material agreements with consultants, which are in writing and to
which Parent or any of the Parent Subsidiaries is a party. Each contract,
arrangement, commitment or understanding of the type described in this Section
4.11, whether or not set forth in Section 4.11 of the Disclosure Letter, is
referred to herein as a "PARENT MATERIAL CONTRACT." Each Parent Material
Contract is valid and binding on Parent or any of the Parent Subsidiaries, as
applicable, and in full force and effect, and Parent and each of the Parent
Subsidiaries have in all material respects performed all obligations required to
be performed by them to date under each Parent Material Contract, except where
such noncompliance, individually or in the aggregate, would not have a Parent
Material Adverse Effect. Neither Parent nor any Parent Subsidiary knows of, or
has received notice of, any violation or default under (nor does there exist any
condition which with the passage of time or the giving of notice would cause
such a violation of or default under) any Parent Material Contract or any other
loan or credit agreement, note, bond, mortgage, indenture or lease, or any other
contract, agreement, arrangement or understanding to which it is a party or by
which it or any of its properties or assets is bound, except for violations or
defaults that would not, individually or in the aggregate, result in a Parent
Material Adverse Effect. Set forth in Section 4.11 of the Parent Disclosure
Letter is a description, including amounts as of the date hereof, of all
indebtedness of Parent and the Parent Subsidiaries other than trade payables and
accruals.
SECTION 4.12. LITIGATION. Except as disclosed in the Parent SEC Filings or
in Section 4.12 of the Parent Disclosure Letter, there is no suit, claim,
action, proceeding or investigation pending or, to the knowledge of Parent,
threatened in writing against Parent or any Parent Subsidiary by or before any
Governmental Entity that (a) individually or in the aggregate, is reasonably
likely to have a Parent Material Adverse Effect or (b) challenges the validity
or propriety, or seeks to prevent consummation of, the transactions contemplated
by this Agreement. Except as disclosed in the Parent SEC Filings or in Section
4.12 of the Parent Disclosure Letter, neither Parent nor any Parent Subsidiary
is subject to any outstanding order, writ, injunction or decree which has had
or, insofar as can be reasonably foreseen, individually or in the aggregate,
would have a Parent Material Adverse Effect.
SECTION 4.13. ENVIRONMENTAL MATTERS. Except as disclosed in the Parent
SEC Filings or in Section 4.13 of the Parent Disclosure Letter or as would not,
individually or in the aggregate, have a Parent Material Adverse Effect:
(a) Parent and the Parent Subsidiaries (i) are in compliance with all, and
are not subject to any asserted liability or, to Parent's knowledge, any
liability, in each case with respect to any, applicable Environmental Laws, (ii)
hold or have applied for all Environmental Permits and (iii) are in compliance
with their respective Environmental Permits;
(b) neither Parent nor any Parent Subsidiary has received any written
notice, demand, letter, claim or request for information alleging that Parent or
any of its Subsidiaries may be in violation of, or liable under, any
Environmental Law;
(c) neither Parent nor any Parent Subsidiary (i) has entered into or agreed
to any consent decree or order or is subject to any judgment, decree or judicial
order relating to compliance with Environmental Laws, Environmental Permits or
the investigation, sampling, monitoring, treatment, remediation, removal or
cleanup of Hazardous Materials and, to the knowledge of Parent, no
investigation, litigation or other proceeding is pending or threatened in
writing with respect thereto, or (ii) is an indemnitor in connection with any
threatened or asserted claim by any third-party indemnitee for any liability
under any Environmental Law or relating to any Hazardous Materials; and
(d) none of the real property owned or leased by Parent or any Parent
Subsidiary is listed or, to the knowledge of Parent, proposed for listing on the
"National Priorities List" under CERCLA, as updated through the date hereof, or
any similar state or foreign list of sites requiring investigation or cleanup.
SECTION 4.14. TRADEMARKS, PATENTS AND COPYRIGHTS. The Parent has
previously given to the Company detailed information (including, where
applicable, federal registration numbers and dates of registrations or
applications for registration) concerning the following: (i) all of the
Parent's and the Parent Subsidiaries' trademarks, trademark rights, service
marks, trade names, and other trade rights, indicating which are registered and
which are not, including all pending applications for any registrations thereof,
and all patents, patent rights and copyrights used or proposed to be used by the
Parent in its business and all pending applications therefore; (ii) all computer
software presently used by the Parent which has been purchased or licensed from
outside parties with a purchase price or license fee in excess of $5,000; and
(iii) all other trade secrets, mailing lists, know-how, designs, plans,
specifications and other intellectual property rights of the Parent (whether or
not registered or registrable) (collectively, "PARENT INTELLECTUAL PROPERTY").
Section 4.14 of the Parent Disclosure Letter identifies (i) each patent or
registration which has been issued and which has not expired or lapsed to the
Parent or any of the Parent Subsidiaries with respect to any Parent Intellectual
Property, (ii) each pending patent application or application for registration
which the Parent or any of the Parent Subsidiaries has made with respect to any
Parent Intellectual Property, and (iii) any Parent Intellectual Property that
any third party owns and that the Parent or any of the Parent Subsidiaries use
or propose to use in its business (including any marketing rights granted to the
Parent or any of the Parent Subsidiaries under patents owned or licensed by
third parties). Except as set forth in Section 4.14 of the Parent Disclosure
Letter, (i) the Parent or one of the Parent Subsidiaries solely owns or is in
sole and exclusive possession of (except to the extent disclosed) adequate
licenses or other legal rights to use all Parent Intellectual Property now used
or held for use in connection with the business as currently conducted or as
contemplated to be conducted, (ii) neither the Parent nor any of the Parent
Subsidiaries has received notice or has any reason to believe that such party's
use of any of the Parent Intellectual Property is interfering with, infringing
upon or otherwise violating the rights of any third party in or to such Parent
Intellectual Property or that any of such Parent Intellectual Property was
misappropriated from a third party, and (iii) neither the Parent nor any of the
Parent Subsidiaries has disclosed any of the Parent Intellectual Property other
than in a manner reasonably necessary for the operation of their business. None
of the Parent or any of the Parent Subsidiaries have granted any licenses of or
other rights to use any of the Parent Intellectual Property to any third party.
The Parent Intellectual Property comprises all of the intellectual property
rights that are in the aggregate necessary in any material respect for the
operation of its business as it is presently conducted.
SECTION 4.15. TAXES. (a) Except for such matters as would not have a Parent
Material Adverse Effect, (i) Parent and the Parent Subsidiaries have timely
filed or will timely file all returns and reports required to be filed by them
with any taxing authority with respect to Taxes for any period ending on or
before the Effective Time, taking into account any extension of time to file
granted to or obtained on behalf of Parent and the Parent Subsidiaries, (ii) all
Taxes that are due prior to the Effective Time have been paid or will be paid
(other than Taxes which (1) are not yet delinquent or (2) are being contested in
good faith and have not been finally determined), (iii) as of the date hereof,
no deficiency for any Tax has been asserted or assessed by a taxing authority
against Parent or any of the Parent Subsidiaries which deficiency has not been
paid other than any deficiency being contested in good faith and (iv) Parent and
the Parent Subsidiaries have provided adequate reserves (in accordance with
GAAP) in their financial statements for any Taxes that have not been paid,
whether or not shown as being due on any returns.
(b) There are no material disputes pending, or claims asserted in writing
for, Taxes or assessments upon Parent, or any of the Parent Subsidiaries, nor
has Parent or any of the Parent Subsidiaries been requested in writing to give
any currently effective waivers extending the statutory period of limitation
applicable to any federal or state income tax return for any period which
disputes, claims, assessments or waivers are reasonably likely to have a Parent
Material Adverse Effect.
(c) There are no Tax liens upon any property or assets of Parent or any of
the Parent Subsidiaries except liens for current Taxes not yet due and except
for liens which have not had and are not reasonably likely to have a Parent
Material Adverse Effect.
(d) Neither Parent nor any of the Parent Subsidiaries has been required to
include in income any adjustment pursuant to Section 481 of the Code by reason
of a voluntary change in accounting method initiated by Parent or any of its
Subsidiaries, and the IRS has not initiated or proposed any such adjustment or
change in accounting method, in either case which adjustment or change has had
or is reasonably likely to have a Parent Material Adverse Effect.
(e) Except as set forth in the financial statements described in Section
4.7, neither Parent nor any of the Parent Subsidiaries has entered into a
transaction which is being accounted for under the installment method of Section
453 of the Code, which would be reasonably likely to have a Parent Material
Adverse Effect. No compensation paid or payable by Parent is subject to Section
162(m) of the Code.
SECTION 4.16. OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES. (a) Merger Sub
was formed solely for the purpose of engaging in the transactions contemplated
by this Agreement.
(b) All of the outstanding capital stock of Merger Sub is owned directly by
Parent. As of the Effective Time, there will be no options, warrants or other
rights (including registration rights), agreements, arrangements or commitments
to which Merger Sub is a party of any character relating to the issued or
unissued capital stock of, or other equity interests in, Merger Sub or
obligating Merger Sub to grant, issue or sell any shares of the capital stock
of, or other equity interests in, Merger Sub, by sale, lease, license or
otherwise. There are no obligations, contingent or otherwise, of Merger Sub to
repurchase, redeem or otherwise acquire any shares of the capital stock of
Merger Sub.
(c) As of the date hereof and the Effective Time, except for obligations or
liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement, Merger Sub has not and will not
have incurred, directly or indirectly, through any subsidiary or affiliate, any
obligations or liabilities or engaged in any business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any person.
SECTION 4.17. OPINION OF FINANCIAL ADVISOR. Goldman, Sachs & Co. has
delivered to the Board of Directors of Parent its written opinion dated the date
hereof that, as of such date, the Exchange Ratio is fair from a financial point
of view to Parent.
SECTION 4.18. VOTE REQUIRED. The votes described in Section 4.4 of this
Agreement are the only votes of the holders of any class or series of capital
stock of Parent necessary to approve the transactions contemplated by this
Agreement.
SECTION 4.19. BROKERS. No broker, finder or investment banker (other than
Goldman, Sachs & Co.) is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger based upon arrangements made by or on
behalf of Parent or any Parent Subsidiary.
SECTION 4.20. INSURANCE. Parent maintains insurance coverage with reputable
insurers in such amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in businesses similar to that of
Parent (taking into account the cost and availability of such insurance).
SECTION 4.21. TITLE TO ASSETS; LIENS. The Parent and each of the Parent
Subsidiaries has good and marketable title in fee simple to all its real
property and good title to all its leasehold interests and other properties, as
reflected in the most recent balance sheet included in the Parent SEC Filings,
except as disclosed in Section 4.21 of the Parent Disclosure Letter and for
properties and assets that have been disposed of in the ordinary course of
business since the date of such balance sheet, or out of the ordinary course of
business which are not material to the Parent and the Parent Subsidiaries taken
as a whole, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever, except (i) the lien for current taxes,
payments of which are not yet delinquent, (ii) such imperfections in title and
easements and encumbrances, if any, as are not substantial in character, amount
or extent and do not materially detract from the value, or interfere with the
present use of the property subject thereto or affected thereby, or otherwise
materially impair the Parent's business operations (in the manner presently
carried on by the Parent) or (iii) as disclosed in the Parent SEC Filings, and
except for such matters, which individually or in the aggregate, could not
reasonably be expected to have a Parent Material Adverse Effect. All leases
under which the Parent leases any 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 default or event which with
notice or lapse of time or both would become a default which could reasonably be
expected to have a Parent Material Adverse Effect. Section 4.21 of the Parent
Disclosure Letter sets forth all liens and securities interests granted by the
Parent or any of the Parent Subsidiaries to third parties.
ARTICLE V
COVENANTS
SECTION 5.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING.
The Company agrees that, between the date of this Agreement and the Effective
Time, except as set forth in Section 5.1 of the Company Disclosure Letter or as
contemplated by any other provision of this Agreement, unless Parent shall
otherwise agree in writing, which agreement shall not be unreasonably withheld
or delayed, (1) the business of the Company and the Company Subsidiaries shall
be conducted only in, and the Company and the Company Subsidiaries shall not
take any action except in, the ordinary course of business consistent with past
practice and (2) the Company shall use its reasonable best efforts to keep
available the services of such of the current officers, significant employees
and consultants of the Company and the Company Subsidiaries and to preserve the
current relationships of the Company and the Company Subsidiaries with such of
the customers, suppliers and other persons with which the Company or any Company
Subsidiary has significant business relations as the Company deems reasonably
necessary in order to preserve substantially intact its business organization.
By way of amplification and not limitation, except as set forth in Section 5.1
of the Company Disclosure Letter or as contemplated by any other provision of
this Agreement, the Board of Directors of the Company shall not (unless required
by applicable Laws or stock exchange regulations) cause or permit the Company or
any Company Subsidiary to, and shall neither cause nor permit any of the
Company's affiliates (over which it exercises control), or any of their
respective officers, directors, employees and agents to, between the date of
this Agreement and the Effective Time, directly or indirectly, do, or agree to
do, any of the following without the prior written consent of Parent, which
consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its Certificate of Incorporation
or By-laws or equivalent organizational documents;
(b) (A) issue, sell, pledge, dispose of, grant, transfer, lease,
guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance
of, (i) any shares of capital stock of the Company or any Company
Subsidiary of any class, or securities convertible or exchangeable or
exercisable for any shares of such capital stock, or any options,
warrants or other rights of any kind to acquire any shares of such
capital stock or such convertible or exchangeable securities, or any
other ownership interest (including, without limitation, any phantom
interest), of the Company or any Company Subsidiary or (ii) except in
the ordinary course of business and in a manner consistent with past
practice, any property or assets of the Company or any Company
Subsidiary, except (1) the issuance of Company Common Stock upon the
exercise of Company Options, (2) pursuant to contracts or agreements
in force at the date of this Agreement or (3) the granting of Company
Options in the ordinary course of business pursuant to the Company
Stock Option Plans in the manner set forth in Section 5.1(b) of the
Company Disclosure Letter nor (B) license or sublicense any property
of the Company or any Company Subsidiary except in the ordinary course
of business on a basis which results in a positive current royalty net
of any royalties due by the Company on account of sales by the
licensee or sublicensee;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock (other than dividends paid by
Company Subsidiaries to the Company or to other Company Subsidiaries
in the ordinary course) or enter into any agreement with respect to
the voting of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization, person or any
division thereof (other than a wholly-owned Company Subsidiary) or any
assets, other than acquisitions of assets in the ordinary course of
business consistent with past practice and any other acquisitions for
consideration that are not, in the aggregate, in excess of $1,000,000;
(ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person
for borrowed money, except for indebtedness to Parent incurred under
the First Priority Secured Line of Credit Agreement (as provided for
in Section 6.6 of this Agreement) and except for other unsecured
indebtedness for borrowed money subordinate to the Company's
indebtedness under the First Priority Secured Line of Credit on terms
satisfactory to Parent; (iii) terminate, cancel or request any
material change in, or agree to any material change in, any Company
Material Contract or enter into any contract or agreement material to
the business, results of operations or financial condition of the
Company and the Company Subsidiaries taken as a whole, in either case
other than in the ordinary course of business, consistent with past
practice; (iv) make or authorize any capital expenditure, other than
capital expenditures that are not, in the aggregate, in excess of
$1,000,000 for the Company and the Company Subsidiaries taken as a
whole; or (v) enter into or amend any contract, agreement, commitment
or arrangement that, if fully performed, would not be permitted under
this Section 5.1(e);
(f) except as may be required by contractual commitments or
corporate policies with respect to severance or termination pay in
existence on the date hereof as disclosed in Section 3.9 of the
Company Disclosure Letter: (i) increase the compensation payable or to
become payable to its officers or employees, (ii) grant any rights to
severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or, except in the
ordinary course of business, other employee of the Company or any
Company Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee, except as contemplated by this
Agreement or to the extent required by applicable Law or the terms of
a collective bargaining agreement or (iii) take any affirmative action
to accelerate the vesting of any stock-based compensation;
(g) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and
consistent with past practice or except as required by changes in
GAAP;
(h) waive, release, assign, settle or compromise any material
claims or litigation except in the ordinary course of business and
consistent with past practices;
(i) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;
(j) take any action that would prevent or impede the Merger from
qualifying as a reorganization within the meaning of sections
368(a)(1)(A) and 368(a)(2)(E) of the Code;
(k) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set
forth in this Agreement being or becoming untrue in any material
respect at any time prior to the Effective Time, or in any of the
conditions to the Merger set forth in Article VII not being satisfied
or in a violation of any provision of this Agreement, except, in every
case, as may be required by applicable law; or
(l) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing.
SECTION 5.2. CONDUCT OF BUSINESS BY PARENT PENDING THE CLOSING.
Parent agrees that, between the date of this Agreement and the Effective Time,
except as set forth in Section 5.2 of the Parent Disclosure Letter or as
contemplated by any other provision of this Agreement, unless the Company shall
otherwise agree in writing, which agreement shall not be unreasonably withheld
or delayed, the Board of Directors of Parent shall not (unless required by
applicable Laws or stock exchange regulations) cause or permit Parent or any
Parent Subsidiary to, and shall neither cause nor permit any of Parent's
affiliates (over which it exercises control), or any of their officers,
directors, employees and agents to, between the date of this Agreement and the
Effective Time, directly or indirectly, do, or agree to do, any of the
following, without the prior written consent of the Company, which consent shall
not be unreasonably withheld or delayed:
(a) amend or otherwise change its Certificate of Incorporation
or By-laws or equivalent organizational documents;
(b) issue, sell, dispose of, grant, transfer or authorize the
issuance, sale, disposition, grant or transfer of any shares of
capital stock of the Parent or any Parent subsidiary of any class, or
securities convertible or exchangeable or exercisable for any shares
of such capital stock, or any options, warrants or other rights of any
kind to acquire any shares of capital stock or such convertible or
exchangeable securities, or any other ownership interest (including
without limitation, any phantom interest) of the Parent or any Parent
subsidiary, except (1) the issuance of Parent Common Stock upon
exercise of Parent Options (including restricted stock awards to
directors) or conversion of Class B Common Stock into Class A Common
Stock, (2) the issuance or transfer of Parent Subsidiary Common Stock
to employees of such Subsidiary in connection with their employment,
(2) the issuance of Parent Subsidiary Common Stock to Parent,
(3) pursuant to contracts or agreements in force at the date of this
Agreement or (4) or as set forth in Section 5.2(b) of the Parent
Disclosure Letter;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock (except for dividends paid by any
Parent Subsidiary to Parent or a Parent Subsidiary in the ordinary
course) or enter into any agreement with respect to the voting of its
capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any interest in any
corporation, partnership or other business organization, person or any
division thereof (other than a wholly-owned Parent Subsidiary) or any
assets except for acquisition of assets in the ordinary course of
business (which may include capital expenditures) and except as set
forth in Section 5.2(b) of the Parent Disclosure Schedule;
(f) INTENTIONALLY OMITTED.
(g) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and
consistent with past practice or except as required by changes in
GAAP;
(h) waive, release, assign, settle or compromise any material
claims or litigation except in the ordinary course of business and
consistent with past practice or where such settlement involves the
payment of amounts which are not material to Parent and the Parent
Subsidiaries taken as a whole;
(i) INTENTIONALLY OMITTED.
(j) take any action that would prevent or impede the Merger from
qualifying as a reorganization within the meaning of Sections
368(a)(1)(A) and 368(a)(2)(E) of the Code;
(k) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set
forth in this Agreement being or becoming untrue in any material
respect at any time prior to the Effective Time, or in any of the
conditions to the Merger set forth in Article VII not being satisfied
or in a violation of any provision of this Agreement, except, in every
case, as may be required by applicable law; or
(l) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing.
SECTION 5.3. COOPERATION. The Company and Parent shall coordinate
and cooperate in connection with (i) the preparation of the Registration
Statement and the Proxy Statement (each as defined in Section 6.1 hereof), (ii)
determining whether any action by or in respect of, or filing with, any
Governmental Entity is required, or any actions, consents, approvals or waivers
are required to be obtained from parties to any Parent Material Contracts or
Company Material Contracts, in connection with the consummation of the Merger
and (iii) seeking any such actions, consents, approvals or waivers or making any
such filings, furnishing information required in connection therewith or with
the Registration Statement and the Proxy Statement and timely seeking to obtain
any such actions, consents, approvals or waivers. Subject to the terms and
conditions herein provided, Parent, Merger Sub and the Company shall use
reasonable best efforts to take, or cause to be taken, all actions and do, or
cause to be done, all things necessary, proper or appropriate under applicable
law to consummate and make effective the transactions contemplated by this
Agreement.
SECTION 5.4. NOTICES OF CERTAIN EVENTS. Each of the Company and
Parent shall give prompt notice to the other of (i) any notice or other
communication from any person alleging that the consent of such person is or may
be required in connection with the Merger; (ii) any notice or other
communication from any Governmental Entity in connection with the Merger; (iii)
any actions, suits, claims, investigations or proceedings commenced or
threatened in writing against, relating to or involving or otherwise affecting
the Company, any Company Subsidiary, Parent or any Parent Subsidiary that relate
to the consummation of the Merger; (iv) the occurrence of a default or event
that, with notice or lapse of time or both, will become a material default under
any Parent Material Contract or Company Material Contract; and (v) any change
that is reasonably likely to result in any Parent Material Adverse Effect or a
Company Material Adverse Effect or is reasonably likely to prevent or materially
delay the ability of either Parent or the Company to consummate the transactions
contemplated by this Agreement or to fulfill its obligations set forth herein.
SECTION 5.5. CONTRACTUAL CONSENTS. Prior to or at the Effective
Time, each of the Company and Parent shall use its reasonable best efforts to
obtain any consents necessary such that the Merger will not constitute a change
of control, or any similar event, which constitutes a default (or an event which
with notice or lapse of time or both would become a default) under any material
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which it or any of its subsidiaries is a party.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1. REGISTRATION STATEMENT; PROXY STATEMENT. (a) As
promptly as practicable after the execution of this Agreement, (i) Parent and
the Company shall prepare and file with the SEC a joint proxy statement relating
to the meetings of the Company's stockholders and Parent's stockholders to be
held in connection with the Merger (together with any amendments thereof or
supplements thereto, the "PROXY STATEMENT") and (ii) Parent shall prepare and
file with the SEC a registration statement on Form S-4 (together with all
amendments thereto, the "REGISTRATION STATEMENT") in which the Proxy Statement
shall be included as a prospectus, in connection with the registration under the
Securities Act of the shares of Parent Common Stock to be issued to the
stockholders of the Company pursuant to the Merger. Each of Parent and the
Company will use all reasonable efforts to cause the Registration Statement to
be declared effective as promptly as practicable, and, prior to the effective
date of the Registration Statement, Parent shall take all or any action required
under any applicable federal or state securities laws in connection with the
issuance of shares of Parent Common Stock in the Merger. Each of Parent and the
Company shall furnish all information concerning it and the holders of its
capital stock as the other may reasonably request in connection with such
actions and the preparation of the Registration Statement and Proxy Statement.
As promptly as practicable after the Registration Statement shall have become
effective, each of Parent and the Company shall mail the Proxy Statement to its
respective stockholders. The Proxy Statement shall include the recommendation
of the Board of Directors of each of Parent and the Company in favor of the
Merger, unless otherwise required by the applicable fiduciary duties of the
respective directors of Parent and the Company, as determined by such directors
in good faith after consultation with independent legal counsel (who may be such
party's regularly engaged independent legal counsel). Except in the event of
termination of this Agreement pursuant to Section 8.1(e), no modification or
withdrawal of such recommendation shall relieve either party of its obligation
to submit this Agreement and the transactions contemplated hereby to their
respective stockholders in accordance with applicable law.
No amendment or supplement to the Proxy Statement or the Registration
Statement will be made by Parent or the Company without the approval of the
other party (which approval shall not be unreasonably withheld or delayed).
Parent and the Company each will advise the other, promptly after it receives
notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, the issuance of any stop order,
the suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy Statement or the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information.
(b) The information supplied by Parent for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of Parent and the Company, (iii) the time of each of the
Stockholders' Meetings (as defined below), and (iv) 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 not misleading. If at any time prior to the Effective Time any event or
circumstance relating to Parent or any Parent Subsidiary, or their respective
officers or directors, should be discovered by Parent which should be set forth
in an amendment or a supplement to the Registration Statement or Proxy
Statement, Parent shall promptly inform the Company. All documents that Parent
is responsible for filing with the SEC in connection with the transactions
contemplated herein will comply as to form and substance in all material aspects
with the applicable requirements of the Securities Act and the rules and
regulations thereunder and the Exchange Act and the rules and regulations
thereunder.
(c) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Company and Parent, (iii) the time of each of the
Stockholders' Meetings, and (iv) 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 not
misleading. If at any time prior to the Effective Time any event or
circumstance relating to the Company or any Company Subsidiary, or their
respective officers or directors, should be discovered by the Company which
should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, the Company shall promptly inform Parent. All
documents that the Company is responsible for filing with the SEC in connection
with the transactions contemplated herein will comply as to form and substance
in all material respects with the applicable requirements of the Securities Act
and the rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
SECTION 6.2. STOCKHOLDERS' MEETINGS. The Company shall call and hold
a meeting of its stockholders (the "COMPANY MEETING") as promptly as practicable
for the purpose of voting upon the approval of the Merger and Parent shall call
and hold a meeting of its stockholders (the "PARENT MEETING" and, together with
the Company Meeting, the "STOCKHOLDERS' MEETINGS") as promptly as practicable
for the purpose of voting upon certain matters including voting upon the
approval of the issuance of the Parent Common Stock pursuant to the Merger and
an amendment to the Certificate of Incorporation of Parent to increase the
number of authorized shares of Parent Class A Common Stock, and Parent and the
Company shall use their reasonable best efforts to hold the Stockholders'
Meetings on the same day and as soon as practicable after the date on which the
Registration Statement becomes effective.
SECTION 6.3. ACCESS TO INFORMATION; CONFIDENTIALITY. (a) Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which the Company or Parent or any of their respective
subsidiaries is a party or pursuant to applicable Law or the regulations or
requirements of any stock exchange or other regulatory organization with whose
rules the parties are required to comply, from the date of this Agreement to the
Effective Time, the Company and Parent shall (and shall cause their respective
subsidiaries to): (i) provide to the other (and its officers, directors,
employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "REPRESENTATIVES") access at reasonable times
upon prior notice to the officers, employees, agents, properties, offices and
other facilities of the other and its subsidiaries and to the books and records
thereof and (ii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of the
other party and its subsidiaries as the other party or its Representatives may
reasonably request. No investigation conducted pursuant to this Section 6.3
shall affect or be deemed to modify any representation or warranty made in this
Agreement.
(b) Any information disclosed pursuant to this Section 6.3 shall be
subject to, and the parties shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under, the
Confidentiality Agreements each dated June 24, 1997 between the Company and
Parent (the "CONFIDENTIALITY AGREEMENTS") with respect to the information
disclosed pursuant to this Section 6.3.
SECTION 6.4. NO SOLICITATION OF TRANSACTIONS. From and after the
date of this Agreement until the earlier of the Effective Time of the Merger or
the termination of this Agreement in accordance with its terms, the Company and
subsidiaries will, and will instruct their respective officers, directors,
employees, representatives and agents to (i) cease (and not reopen) any existing
discussions or negotiations, if any, with any parties with respect to any
acquisition (other than the transactions contemplated by this Agreement) of all
or any material portion of the assets of, or any equity interest in, the Company
or any of its subsidiaries or any business combination with the Company or any
of its subsidiaries and (ii) not, directly or indirectly, (A) solicit or
initiate discussions, or, except with respect to a Superior Proposal (as defined
below) received by the Company, engage in negotiations with any person or,
except with respect to a Superior Proposal received by the Company, take any
other action intended, designed or reasonably likely to facilitate the efforts
of any person, other than Parent and Merger Sub, relating to the possible
acquisition of the Company or any of its subsidiaries (whether by way of merger,
purchase of capital stock, purchase of assets or otherwise) or any material
portion of its or their capital stock or assets, (B) except with respect to a
Superior Proposal received by the Company, and provided that the Company has
required the party submitting the Superior Proposal to execute a non-disclosure
agreement comparable to the Confidentiality Agreement, provide non-public
information with respect to the Company or any of the Company Subsidiaries to
any person, other than Parent and Merger Sub, relating to the possible
acquisition of the Company or any of its subsidiaries (whether by way of merger,
purchase of capital stock, purchase of assets or otherwise) or any material
portion of its or their capital stock or assets, (C) enter into an agreement
with any person, other than Parent and Merger Sub, providing for the possible
acquisition of the Company or any of its subsidiaries (whether by way of merger,
purchase of capital stock, purchase of assets or otherwise) or any material
portion of its or their capital stock or assets or (D) except with respect to a
Superior Proposal received by the Company, make or authorize any statement,
recommendation or solicitation in support of any possible acquisition of the
Company or any of the Company Subsidiaries (whether by way of merger, purchase
of capital stock, purchase of assets or otherwise) or any portion of its or
their capital stock or assets by any person, other than by Parent and Merger
Sub, or withdraw or modify the recommendation by the Company's Board of
Directors with respect to this Agreement and the Merger. A "SUPERIOR PROPOSAL"
shall mean a written proposal that has not been solicited by the Company after
the date of this Agreement relating to the possible acquisition of the Company
or any of its subsidiaries (whether by way of merger, purchase of capital stock,
purchase of assets or otherwise) or any material portion of its or their capital
stock or assets by any person other than by Parent or Merger Sub, which proposal
is received not in breach of this Section 6.3 after the date of this Agreement
and prior to the obtaining of the approval of the Company's stockholders which
may state that it is subject to good faith review of non-public information
regarding the Company and which, in the reasonable good faith judgment of the
Board of Directors of the Company, after consultation with its financial
advisors, (i) is determined to be on financial terms more favorable to the
shareholders of the Company than the terms of Merger and (ii) is made by a party
that can reasonably be expected to consummate the transaction on the terms
proposed, but only if the Board of Directors of the Company determines after
consultation with its legal advisors that failure to negotiate with respect to
or to accept such proposal would constitute a breach of its fiduciary duties to
the Company or its stockholders under applicable law. If the Company or any of
its subsidiaries receives any offer or proposal to enter negotiations relating
to any of the above, the Company shall as promptly as practicable, notify Parent
thereof, including information as to the identity of the party making any such
offer or proposal and the specific terms of such offer or proposal, as the case
may be, and provide Parent the same information (if any) the Company provides to
the party making the Superior Proposal. Notwithstanding the foregoing,
following the receipt of an offer or proposal that the Board of Directors of the
Company, in the exercise of its reasonable good faith judgement, after
consultation with its legal and financial advisors, deems to be a Superior
Proposal, the Company may terminate this Agreement under Section 8.1(e) (subject
to the Company's obligations pursuant to Section 8.2) and accept such Superior
Proposal, and the Board of Directors of the Company may approve or recommend
such Superior Proposal (and, in connection therewith, withdraw or modify its
approval and recommendation of the this Agreement and the Merger).
SECTION 6.5. APPROPRIATE ACTION; CONSENTS; FILINGS. (a) (i) The
Company and Parent shall use their reasonable best efforts to (A) take, or cause
to be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the transactions contemplated by this Agreement as promptly
as practicable, (B) obtain from any Governmental Entities any consents,
licenses, permits, waivers, approvals, authorizations or orders required to be
obtained or made by Parent or the Company or any of their subsidiaries, or to
avoid any action or proceeding by any Governmental Entity (including, without
limitation, those in connection with the HSR Act), in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated herein, including, without limitation, the Merger,
and (C) make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (x)
the Securities Act and the Exchange Act, and any other applicable federal or
state securities Laws, (y) the HSR Act and (z) any other applicable Law;
PROVIDED that Parent and the Company shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior to filing and,
if requested, to accept all reasonable additions, deletions or changes suggested
in connection therewith. The Company and Parent shall furnish to each other all
information required for any application or other filing to be made pursuant to
the rules and regulations of any applicable Law (including all information
required to be included in the Proxy Statement and the Registration Statement)
in connection with the transactions contemplated by this Agreement. The Company
and Parent shall not take any action, or refrain from taking any action, the
effect of which would be to delay or impede the ability of the Company and
Parent to consummate the transactions contemplated by this Agreement.
(ii) Each of the parties hereto agrees, and shall cause each of
its respective subsidiaries to cooperate and to use their respective
reasonable best efforts to obtain any government clearances required
for completion of the transactions (including through compliance with
the HSR Act and any applicable foreign governmental reporting
requirements), to respond to any government requests for information,
and to contest and resist any action, including any legislative,
administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) (an "ORDER") that
restricts, prevents or prohibits the consummation of the Merger or any
other transactions contemplated by this Agreement, including, without
limitation, by vigorously pursuing all available avenues of
administrative and judicial appeal and all available legislative
action. The parties hereto will consult and cooperate with one
another, and consider in good faith the views of one another, in
connection with any analyses, appearances, presentations, memoranda,
briefs, arguments, opinions and proposals made or submitted by or in
behalf of any party hereto in connection with proceedings under or
relating to the HSR Act or any other federal, state or foreign
antitrust or fair trade law. Each party shall promptly notify the
other party of any communication to that party from any Governmental
Entity in connection with any required filing with, or approval or
review by, such Governmental Entity in connection with the Merger and
permit the other party to review in advance any such proposed
communication to any Governmental Entity. Neither party shall agree
to participate in any meeting with any Governmental Entity in respect
of any such filings, investigation or other inquiry unless it consults
with the other party in advance and, to the extent permitted by such
Governmental Entity, gives the other party the opportunity to attend
and participate thereat. Notwithstanding any other provision of this
Agreement, in connection with seeking any such approval of a
Governmental Entity, neither party shall, without the other party's
prior written consent (which shall not be unreasonably withheld),
commit to any divestiture transaction and neither party shall be
required to agree to sell or hold separate and agree to sell, before
or after the Effective Time, any of the Company's or Parent's
businesses, product lines, properties or assets, or agree to any
changes or restrictions in the operation of such businesses, product
lines, properties or assets, if such divestiture or such restrictions
would, individually or in the aggregate, materially adversely affect
the financial condition or results of operations of Parent or the
Company.
(b) (i) The Company and Parent shall give (or shall cause their
respective subsidiaries to give) any notices to third parties, and
use, and cause their respective subsidiaries to use, all reasonable
efforts to obtain any third party consents, (A) necessary, proper or
advisable to consummate the transactions contemplated in this
Agreement, (B) disclosed or required to be disclosed in the Company
Disclosure Letter or the Parent Disclosure Letter, as the case may be,
or (C) required to prevent a Company Material Adverse Effect or a
Parent Material Adverse Effect from occurring prior to or after the
Effective Time.
(ii) In the event that either party shall fail to
obtain any third party consent described in subsection (b)
(i) above, such party shall use all reasonable efforts, and
shall take any such actions reasonably requested by the
other party hereto, to minimize any adverse effect upon the
Company and Parent, their respective subsidiaries, and their
respective businesses resulting, or which could reasonably
be expected to result after the Effective Time, from the
failure to obtain such consent.
(c) From the date of this Agreement until the Effective Time,
the Company shall promptly notify Parent in writing of any pending or,
to the knowledge of the Company, threatened action, proceeding or
investigation by any Governmental Entity or any other person (i)
challenging or seeking material damages in connection with the Merger
or the conversion of Company Common Stock into Parent Common Stock
pursuant to the Merger or (ii) seeking to restrain or prohibit the
consummation of the Merger or otherwise limit the right of Parent or,
to the knowledge of the Company, its subsidiaries to own or operate
all or any portion of the businesses or assets of the Company or its
subsidiaries, which in either case is reasonably likely to have a
Company Material Adverse Effect or a Parent Material Adverse Effect
prior to or after the Effective Time.
SECTION 6.6. LINE OF CREDIT. The parties shall upon execution of
this Agreement execute a First Priority Secured Line of Credit Agreement in the
form of Exhibit 6.6 attached hereto.
SECTION 6.7. UPDATE DISCLOSURE; BREACHES. From and after the date of
this Agreement until the Effective Time, each party hereto shall promptly notify
the other party hereto by written update to its Disclosure Letter of (i) the
occurrence, or non-occurrence, of any event that would be likely to cause any
condition to the obligations of any party to effect the Merger and the other
transactions contemplated by this Agreement not to be satisfied, or (ii) the
failure of the Company or Parent, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
pursuant to this Agreement which would be likely to result in any condition to
the obligations of any party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied; PROVIDED, HOWEVER, that the
delivery of any notice pursuant to this Section 6.7 shall not cure any breach of
any representation or warranty requiring disclosure of such matter prior to the
date of this Agreement or otherwise limit or affect the remedies available
hereunder to the party receiving such notice.
SECTION 6.8. PUBLIC ANNOUNCEMENTS. Parent and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Merger and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by Law or any listing agreement with Nasdaq or the National
Association of Securities Dealers, Inc.
SECTION 6.9. NASDAQ. Parent shall promptly prepare and submit to
Nasdaq a listing application covering the shares of Parent Common Stock to be
issued in the Merger, and shall use all reasonable efforts to cause such shares
to be approved for listing on Nasdaq, subject to official notice of issuance,
prior to the Effective Time.
SECTION 6.10. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) Parent
and the Surviving Corporation shall take all action necessary so that the
indemnification obligations set forth in the Company's Certificate and the
Company's By-laws, in each case as of the date of this Agreement, shall survive
the Merger (and, prior to the Effective Time, Parent shall cause the Certificate
of Incorporation and By-laws of Merger Sub to reflect such provisions) and shall
not be amended, repealed or otherwise modified for a period of six years after
the Effective Time in any manner that would adversely affect the rights
thereunder of the individuals who on or prior to the Effective Time were
directors or officers of the Company or its subsidiaries with respect to
occurrences prior to the Effective Time.
(b) The Company shall, to the fullest extent permitted under
applicable Law (which, in the event of any disagreement between the party
seeking indemnification and the indemnifying party, shall be determined by
independent counsel selected by the indemnifying party and reasonably acceptable
to the party seeking indemnification) and regardless of whether the Merger
becomes effective, indemnify and hold harmless, and, after the Effective Time,
Parent and the Surviving Corporation shall, to the fullest extent permitted
under applicable Law (which, in the event of any disagreement between the party
seeking indemnification and the indemnifying party, shall be determined by
independent counsel selected by the indemnifying party and reasonably acceptable
to the party seeking indemnification), indemnify and hold harmless, each present
and former director, officer, trustee or fiduciary of the Company and each
Company Subsidiary and each such person who served at the request of the Company
or any Company Subsidiary as a director, officer, trustee, partner, fiduciary,
employee or agent of another corporation, partnership, joint venture, trust,
pension or other employee benefit plan or enterprise (collectively, the
"INDEMNIFIED PARTIES") against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, administrative or investigative, arising out of or pertaining to any
action or omission in their capacity as an officer or director, in each case
occurring before the Effective Time (including the transactions contemplated by
this Agreement). Without limiting the foregoing, in the event of any such
claim, action, suit, proceeding or investigation, (i) the Company or Parent and
the Surviving Corporation, as the case may be, shall pay the fees and expenses
of counsel selected by any Indemnified Party, which counsel shall be reasonably
satisfactory to the Company or to Parent and the Surviving Corporation, as the
case may be, promptly after statements therefor are received (unless the
Surviving Corporation shall elect to defend such action) and (ii) the Company
and Parent and the Surviving Corporation shall cooperate in the defense of any
such matter.
(c) For six years from the Effective Time, the Surviving Corporation
shall provide to the Company's current directors and officers liability
insurance protection of the same kind and scope as that provided by the Parent's
directors' and officers' liability insurance policies from time to time (copies
of which have been made available to the Company).
(d) In the event Parent, the Company or the Surviving Corporation or
any of their respective successors or assigns (i) consolidates with or merges
into any other person or 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, the
Company or the Surviving Corporation, as the case may be, honor their respective
indemnification obligations set forth in this Section 6.10.
(e) The obligations of the Company, the Surviving Corporation, and
Parent under this Section 6.10 shall not be terminated or modified in such a
manner as to adversely affect any director, officer, employee, agent or other
person to whom this Section 6.10 applies without the consent of such affected
director, officer, employee, agent or other person (it being expressly agreed
that each such director, officer, employee, agent or other person to whom this
Section 6.10 applies shall be a third-party beneficiary of this Section 6.10).
SECTION 6.11. PLAN OF REORGANIZATION. The Agreement is intended to
constitute a "plan of reorganization" within the meaning of section 1.368-2(g)
of the income tax regulations promulgated under the Code. From and after the
date hereof and until the Effective Time, each party hereto shall use its
reasonable best efforts to cause the Merger to qualify, and will not knowingly
take any actions or cause any actions to be taken which could prevent the Merger
from qualifying, as a reorganization under the provisions of section 368(a) of
the Code. Following the Effective Time, neither the Surviving Corporation,
Parent nor any of their affiliates shall take any action or cause any action to
be taken which it knows would cause the Merger to fail to qualify as a
reorganization under section 368(a) of the Code.
SECTION 6.12. INTENTIONALLY OMITTED.
SECTION 6.13. 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.
SECTION 6.14. VOTING AGREEMENTS. Concurrently with the execution
hereof, (i) the Company shall deliver to Parent voting agreements substantially
in the form of Exhibit 6.14(a) attached hereto executed by each of the persons
identified in the Addendum to Exhibit 6.14(a) (ii) Parent shall deliver to the
Company a voting agreement substantially in the form of Exhibit 6.14(b) attached
hereto executed by Westell Technologies, Inc. Voting Trust formed pursuant to
the Voting Trust Agreement dated February 23, 1994, as amended, and (iii) Parent
shall deliver to the Company voting agreements substantially in the form of
Exhibit 6.14(c) attached hereto executed by each of the persons identified in
the Addendum to Exhibit 6.14(c).
SECTION 6.15. RETENTION AGREEMENTS. Concurrently with the execution
hereof, Parent shall enter into a retention agreement with James Steenbergen
substantially in the form of Exhibit 6.15 attached hereto. After the date
hereof and prior to the Effective Time, Parent and the Company shall reasonably
cooperate to develop and adopt an employee retention plan for key employees of
the Company which shall be subject to Parent approval.
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY UNDER THIS
AGREEMENT. The respective obligations of each party to effect the Merger and
the other transactions contemplated herein shall be subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived, in whole or in part, to the extent permitted by applicable
Law:
(a) EFFECTIVENESS OF THE REGISTRATION STATEMENT. The
Registration Statement shall have been declared effective by the SEC
under the Securities Act. No stop order suspending the effectiveness
of the Registration Statement shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated or, to the
knowledge of Parent or the Company, threatened by the SEC.
(b) STOCKHOLDER APPROVAL. The matters specified in Section 3.4
of this Agreement shall have been approved and adopted by the
requisite vote of the stockholders of the Company and the matters
specified in Section 4.4 of this Agreement shall have been approved by
the requisite affirmative vote of the Parent Common Stock and Parent
Class B Common Stock.
(c) NO ORDER. No Governmental Entity or federal or state court
of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order,
decree, judgment, injunction or other order (whether temporary,
preliminary or permanent), in any case which is in effect and which
prevents or prohibits consummation of the Merger or any other
transactions contemplated in this Agreement;
PROVIDED, HOWEVER, that the parties shall use their reasonable
best efforts to cause any such decree, judgment, injunction or other
order to be vacated or lifted.
(d) CONSENTS AND APPROVALS. All consents, approvals and
authorizations set forth in Section 3.5 or 4.5 or the related sections
of the Company Disclosure Letter or the Parent Disclosure Letter
required to be obtained to consummate the Merger shall have been
obtained, except for such consents, approvals and authorizations the
failure of which to obtain would not have a Company Material Adverse
Effect or a Parent Material Adverse Effect after the Effective Time.
(e) HSR ACT. The applicable waiting period, together with any
extensions thereof, under the HSR Act shall have expired or been
terminated.
(f) NASDAQ. The shares of Parent Common Stock issuable to the
Company's stockholders in the Merger shall have been approved for
quotation on Nasdaq, subject to official notice of issuance.
(g) TAX OPINIONS. (A) Parent and the Company shall have
received the opinion of their respective counsel, McDermott, Will &
Emery and Heller Ehrman White & McAuliffe, based upon facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time, to
the effect that (i) the Merger will be treated for federal income tax
purposes as a reorganization qualifying under the provisions of
section 368(a) of the Code, and Parent, Merger Sub and the Company
will each be a party to the reorganization, and (ii) no gain or loss
will be recognized by Parent, Merger Sub or the Company as a result of
the Merger, and (B) the Company shall have received the opinion of
Heller Ehrman White & McAuliffe, based upon facts, representations and
assumptions set forth in such opinion which are consistent with the
state of facts existing at the Effective Time, to the effect that no
gain or loss will be recognized by the stockholders of the Company who
exchange their Company Common Stock solely for Parent Common Stock
pursuant to the Merger, each dated the date of the Effective Time;
provided, however, that if counsel to either Parent or the Company
does not render such opinion, this condition will be deemed satisfied
with respect to such party if counsel for the other party renders such
opinion to such party. In rendering such opinions, counsel may
require and rely upon representations contained in certificates of
officers of Parent, the Company and certain stockholders of Parent and
the Company.
SECTION 7.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT AND
MERGER SUB. The obligations of Parent and Merger Sub to effect the Merger and
the other transactions contemplated herein are also subject to the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by applicable Law:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in this Agreement (without giving
effect to any update to the Company Disclosure Letter under Section
6.7) shall be true and correct in all material respects (except that
where any statement in a representation or warranty expressly includes
a standard of materiality, such statement shall be true and correct in
all respects giving effect to such standard) as of the Effective Time
as though made on and as of the Effective Time, except (i) for changes
specifically permitted by the terms of this Agreement and (ii) that
those representations and warranties which address matters only as of
a particular date shall remain true and correct as of such date.
Parent shall have received a certificate of the Chief Executive
Officer or Chief Financial Officer of the Company to that effect.
(b) AGREEMENTS AND COVENANTS. The 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 on
or prior to the Effective Time. Parent shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer
of the Company to that effect.
(c) 1997 FINANCIAL STATEMENTS. The financial statements of the
Company for the year ended August 31, 1997 shall have been issued
together with an unqualified report of Arthur Andersen LLP thereon,
except as set forth in Section 7.2(c) of the Company Disclosure
Letter.
(d) There shall have been no events, changes or effects with respect
to the Company or Company Subsidiaries having, or which could reasonably be
expected to have a Company Material Adverse Effect, and at the Closing the
Company shall have delivered to Parent a certificate to that effect.
(e) Seventy Percent (70%) of the key personnel identified in Exhibit
7.2 shall remain employed by the Company as of the Effective Time.
SECTION 7.3. ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY.
The obligation of the Company to effect the Merger and the other transactions
contemplated in this Agreement is also subject to the following conditions, any
or all of which may be waived, in whole or in part, to the extent permitted by
applicable Law:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent contained in this Agreement (without giving
effect to any update to the Parent Disclosure Letter under Section
6.7) shall be true and correct in all material respects (except that
where any statement in a representation or warranty expressly includes
a standard of materiality, such statement shall be true and correct in
all respects giving effect to such standard) as of the Effective Time
as though made on and as of the Effective Time, except (i) for changes
specifically permitted by the terms of this Agreement and (ii) that
those representations and warranties which address matters only as of
a particular date shall remain true and correct as of such date. The
Company shall have received a certificate of the Chief Executive
Officer or Chief Financial Officer of Parent to that effect.
(b) AGREEMENTS AND COVENANTS. Parent 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 on
or prior to the Effective Time. The Company shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer
of Parent to that effect.
(c) There shall have been no events, changes or effects with respect
to Parent or Parent Subsidiaries having, or which could reasonably be
expected to have a Parent Material Adverse Effect on Parent, and at the
Closing Parent shall have delivered to the Company a certificate to that
effect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of this
Agreement and the Merger by the stockholders of the Company and Parent:
(a) by mutual consent of Parent, Merger Sub and the Company;
(b) (i) by Parent (provided that Parent is not then in material
breach of any representation, warranty, covenant or other agreement
contained herein), if there has been a breach by the Company of any of
its representations, warranties, covenants or agreements contained in
this Agreement, or any such representation and warranty shall have
become untrue, in any such case such that Section 7.2(a) or Section
7.2(b) will not be satisfied and such breach or condition has not been
promptly cured within 30 days following receipt by the Company of
written notice of such breach;
(ii) by the Company (provided that the Company is not
then in material breach of any representation, warranty,
covenant or other agreement contained herein), if there has
been a breach by Parent of any of its representations,
warranties, covenants or agreements contained in this
Agreement, or any such representation and warranty shall
have become untrue, in any such case such that Section
7.3(a) or Section 7.3(b) will not be satisfied and such
breach or condition has not been promptly cured within 30
days following receipt by Parent of written notice of such
breach;
(c) by either Parent or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity preventing or prohibiting
consummation of the Merger shall have become final and nonappealable;
(d) by either Parent or the Company if the Merger shall not have
been consummated before February 28, 1998, unless the failure of the
Closing to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe in all
material respects the covenants and agreements of such party set forth
herein; PROVIDED, HOWEVER, that this Agreement may be extended not
more than 60 days by Parent or the Company by written notice to the
other party if the Merger shall not have been consummated as a direct
result of (i) the Company or Parent having failed to receive all
regulatory approvals or consents required to be obtained by the
Company or Parent with respect to the Merger or (ii) the existence of
litigation or any governmental proceeding seeking to prevent or
prohibit consummation of the Merger;
(e) by the Company if it determines to accept a Superior Proposal
pursuant to Section 6.4 hereof; provided that such termination under clause
(e) shall not be effective unless the Company gives notice to the Parent at
least three (3) business days prior to entering into any agreement with
respect to a Superior Proposal and shall not be effective until the Company
has delivered the Company Breakup Fee pursuant to Section 8.2(b). The
Company shall not accept a Superior Proposal unless it terminates this
Agreement and pays the Company Breakup Fee to the Parent.
(f) by Parent if the if the matters described in Section 3.4 of
this Agreement shall fail to receive the requisite vote for approval
and adoption by the stockholders of the Company at the Company Meeting
or any adjournment or postponement thereof.
(g) by the Company if the matters described in Section 3.4 of this
Agreement shall fail to receive the requisite vote for approval and
adoption by the stockholders of the Company at the Company Meeting or any
adjournment or postponement thereof (except in connection with a breach by
the Company of its covenants under this Agreement).
(h) by the Company if the matters described in Section 4.4 of this
Agreement shall fail to receive the requisite vote for approval by the
stockholders of Parent at the Parent Meeting or any adjournment or
postponement thereof (except in connection with a breach by the Company of
its covenants under this Agreement).
SECTION 8.2. EFFECT OF TERMINATION. (a) In the event of the
termination of this Agreement by either the Company or Parent pursuant to
Section 8.1, this Agreement shall forthwith become void, there shall be no
liability under this Agreement on the part of Parent or the Company, other than
the provisions of Section 6.3, this Section 8.2 and Section 8.5, and except to
the extent that such termination results from the wilful and material breach by
a party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
(b) In the event of termination of this Agreement without consummation of
the transactions contemplated hereby by the Company pursuant to Section 8.1(e)
and at that time there shall not have occurred a Parent Material Adverse Effect
which has not been promptly cured within 30 days following receipt by Parent of
written notice of such breach, then the Company shall make payment to Parent
simultaneously therewith by wire transfer of immediately available funds of a
breakup fee in the amount of $14,774,000 (the "COMPANY BREAKUP FEE").
(c) If (i) this Agreement is terminated without consummation of the
transactions contemplated in this Agreement by the Company pursuant to Section
8.1(g), (ii) at that time there shall not have occurred a Parent Material
Adverse Effect which has not been promptly cured within 30 days following
receipt by Parent of written notice of such breach and (iii) at that time an
unsolicited Competing Transaction (as defined herein) shall have been proposed
publicly or been otherwise made available to non-director stockholders of the
Company, then the Company shall make payment of the Company Breakup Fee to the
Parent by wire transfer of immediately available funds immediately upon
consummation of a Competing Transaction if such Competing Transaction is
consummated within six (6) months from the time of the vote of the stockholders
of the Company on the Merger and such consummated Competing Transaction is with
the party (or an affiliate of the party) which had proposed an unsolicited
Competing Transaction which was received by the Company prior to the Company's
stockholders' vote on the Merger. A "COMPETING TRANSACTION" with respect to the
Company, means any of the following involving the Company other than the Merger:
any proposed (i) merger, consolidation, share exchange, business combination or
other similar transaction involving the Company, (ii) sale, lease, exchange
transfer or other disposition directly or indirectly of 50% or more of the
consolidated assets of the Company and the Company Subsidiaries, taken as a
whole, or (iii) transaction in which any person shall acquire beneficial
ownership (as such term is defined in Rule 13d-3 under the Exchange Act), or the
right to acquire beneficial ownership of, or any "group" (as such term is
defined under the Exchange Act) shall have been formed which beneficially owns
or has the right to acquire beneficial ownership of, 50% or more of the
outstanding voting capital stock of the Company.
(d) If (i) this Agreement is terminated without consummation of the
transactions contemplated hereby by the Company pursuant to Section 8.1(g), (ii)
at that time there shall not have occurred a Parent Material Adverse Effect
which has not been promptly cured within 30 days following receipt by Parent of
written notice of such breach, (iii) at that time an unsolicited Competing
Transaction shall have been proposed publicly or been otherwise made available
to non-director stockholders of the Company, and (iv) an agreement with respect
to a Competing Transaction is subsequently entered into to by the Company within
75 days after the vote of the Company's stockholders with a party other than the
party (or any of its affiliates) which had proposed the unsolicited Competing
Transaction which was received by the Company prior to the Company's
Stockholders' vote on the Merger, then the Company shall make payment of the
Company Breakup Fee to the Parent by wire transfer of immediately available
funds immediately upon consummation of such subsequently proposed Competing
Transaction if such subsequently proposed Competing Transaction is consummated
within six (6) months after the vote of the stockholders of the Company on the
Merger.
(e) The Company and Parent shall use their reasonable best efforts to
enter into a non-exclusive, non-assignable (except upon the sale or transfer of
the whole business) license, without the right to sublicense, regarding the
Company Intellectual Property on commercially acceptable terms (including pass-
through royalty on licensed technology) subsequent to the execution of this
Agreement. Such license shall become effective immediately in the event of, but
only upon, a termination of this Agreement without consummation of the
transactions contemplated hereby by the Company pursuant to Section 8.1(e) or
pursuant to Section 8.1(g) if at the time of such vote by the stockholders of
the Company a Competing Transaction shall have been proposed.
SECTION 8.3. AMENDMENT. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; PROVIDED, HOWEVER, that, after approval
of the Merger by the stockholders of the Company, no amendment may be made which
would reduce the amount or change the type of consideration into which each
share of Company Common Stock shall be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.4. WAIVER. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties of the other party contained herein or in
any document delivered pursuant hereto and (c) waive compliance by the other
party with any of the agreements or conditions contained herein; PROVIDED,
HOWEVER, that after any approval of the transactions contemplated by this
Agreement by the stockholders of the Company, there may not be, without further
approval of such stockholders, any extension or waiver of this Agreement or any
portion thereof which reduces the amount or changes the form of the
consideration to be delivered to the holders of Company Common Stock hereunder
other than as contemplated by this Agreement. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the party
or parties to be bound thereby, but such extension or waiver or failure to
insist on strict compliance with an obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
SECTION 8.5. FEES AND EXPENSES. All expenses incurred by the parties
hereto shall be borne solely and entirely by the party which has incurred the
same; PROVIDED, HOWEVER, that each of Parent and the Company shall pay one-half
of the expenses related to printing, filing and mailing the Registration
Statement and the Proxy Statement and all SEC and other regulatory filing fees
incurred in connection with the Registration Statement and the Proxy Statement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 9.1 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 9.2. NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, mailed or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like changes of address) or sent by electronic transmission to the telecopier
number specified in Exhibit 9.2 hereto.
SECTION 9.3. CERTAIN DEFINITIONS. For purposes of this Agreement,
the term:
(a) "AFFILIATE" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is
under common control with, the first-mentioned person;
(b) "BENEFICIAL OWNER" means with respect to any shares of
Company Common Stock, Parent Common Stock or Parent Class B Common
Stock, a person who shall be deemed to be the beneficial owner of such
shares (i) which such person or any of its affiliates or associates
beneficially owns, directly or indirectly, (ii) which such person or
any of its affiliates or associates (as such term is defined in Rule
12b-2 of the Exchange Act) has, directly or indirectly, (A) the right
to acquire (whether such right is exercisable immediately or subject
only to the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding, (iii) which
are beneficially owned, directly or indirectly, by any other persons
with whom such person or any of its affiliates or associates has any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any such shares or (iv) pursuant to
Section 13(d) of the Exchange Act and any rules or regulations
promulgated thereunder;
(c) "BUSINESS DAY" shall mean any day other than a day on which
banks in the State of New York are authorized or obligated to be
closed;
(d) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management or policies of a person, whether through the
ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "KNOWLEDGE" will be deemed to be present when the matter in
question was brought to the attention of any executive officer of
Parent or the Company, as the case may be;
(f) "PERSON" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in Section 13(d) of the Exchange
Act);
(g) "SUBSIDIARY" or "SUBSIDIARIES" of Parent, the Company, the
Surviving Corporation or any other person means any corporation,
partnership, joint venture or other legal entity of which Parent, the
Company, the Surviving Corporation or such other person, as the case
may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests the holders of which are generally entitled to
vote for the election of the Board of Directors or other governing
body of such corporation or other legal entity.
SECTION 9.4. HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.5. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 9.6. COMPANY AND PARENT DISCLOSURE LETTERS. Disclosures of
the Company or Parent set forth in any schedule to the Company or Parent
Disclosure Letters, respectively, shall be deemed to be disclosed only for the
purposes of the particular schedule upon which such disclosure is identified and
shall not be deemed to be disclosed for the purposes of any other schedule of
the Company or Parent Disclosure Letter, respectively.
SECTION 9.7. ENTIRE AGREEMENT. This Agreement (together with the
Schedules, Exhibits, Parent and Company Disclosure Letters and the other
documents delivered pursuant hereto) and the Confidentiality Agreements
constitute the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, are not intended to confer upon any other person any
rights or remedies hereunder. No prior drafts of this Agreement shall be used
as evidence of the intent the intent of the parties or for any other purposes.
SECTION 9.8. ASSIGNMENT. This Agreement shall not be assigned by
operation of law or otherwise.
SECTION 9.9. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied, other
than pursuant to Section 2.4, 6.6(b), or 6.10 or the right to receive the
consideration payable in the Merger pursuant to Article II, is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.10. MUTUAL DRAFTING. Each party hereto has participated in
the drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties.
SECTION 9.11. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the Laws of the State of Delaware.
SECTION 9.12. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Parent and the Company have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
WESTELL TECHNOLOGIES, INC.
By: /s/ Gary F. Seamans
Name:
Title:
KAPPA ACQUISITION CORP.
By: /s/ Gary F. Seamans
Name:
Title:
AMATI COMMUNICATIONS CORPORATION
By: /s/ James Steenbergen
Name: James Steenbergen
Title: President & CEO
EXHIBIT 6.14a
VOTING AGREEMENT DIRECTOR OF ACC
This Voting Agreement (the "Agreement") dated as of September 30, 1997 is
entered into by and between the undersigned (the "Stockholder"), and Westell
Technologies, Inc., a Delaware corporation (the "Parent").
AGREEMENT. In consideration of the recitals, respective representations,
warranties, covenants and agreements set forth herein and in that certain
Agreement of Merger, dated as of September 30, 1997 (the "Merger Agreement"),
among Parent, Kappa Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Company ("Merger Sub") and Amati Communications Corporation, a
Delaware corporation (the "Company") (the transactions contemplated by the
Merger Agreement being referred to herein as the "Merger"), the Stockholder
hereby agrees with the Parent that, prior to the earlier to occur of the valid
termination of the Merger Agreement or the Effective Time (as defined in the
Merger Agreement), Stockholder will appear at any annual or special meeting of
stockholders of the Company called to consider and vote on matters relating to
the Merger (the "Meeting") or otherwise cause the Securities to be counted as
present at the Meeting for purposes of establishing a quorum and vote or consent
(or cause to be voted or consented) and will vote all of the capital stock of
the Company for which Stockholder has the power, right, option or ability to
vote or direct the voting of in favor of the Merger and in favor of all other
matters with respect to the Merger proposed at the Meeting and against any
proposal, action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement assuming that the Company had received stockholder
approval of such matters with respect to the Merger.
TERMINATION. Stockholder's agreement to vote as indicated above will
expire and be of no further effect on the earlier to occur of (i) the
adjournment without continuation of the Meeting and (ii) February 28, 1998.
INDEMNIFICATION. The Parent shall indemnify and hold harmless Stockholder
and Stockholder's affiliates (the "Indemnified Parties") against and from any
costs, expenses (including reasonable attorneys' fees), settlement payments,
claims, demands, judgments, fines, penalties, losses, damages and liabilities
incurred in connection with any claim, suit, action or proceeding (whether
asserted, commenced or arising before or after the Effective Time) that arises
directly or indirectly from or relates directly or indirectly to (a) the
execution, delivery or performance of this Agreement, or (b) any of the
transactions contemplated by this Agreement. In the event any such claim, suit,
action or proceeding is asserted or commenced against any Indemnified Party, (i)
the Parent shall advance and pay the reasonable fees and expenses of any counsel
retained by such Indemnified Party in connection with such claim, suit, action
or proceeding promptly after receipt of a request therefor from such Indemnified
Party, and (ii) the Parent shall cooperate with such Indemnified Party and such
Indemnified Party's counsel in the defense of such claim, suit, action or
proceeding. The Parent agrees to pay all expenses, including attorneys' fees,
which may be incurred by any of the Indemnified Parties in enforcing the
indemnity and other obligations provided for in this paragraph.
DEFINITIONS.
a. "BENEFICIALLY OWN" OR "BENEFICIAL OWNERSHIP" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by
the same holder, securities Beneficially Owned by a person include securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
the securities of the same issuer.
b. "EXISTING SHARES" means shares of Common Stock of the Company (the
"Company Common Stock") Beneficially Owned by Stockholder as of the date hereof.
c. "SECURITIES" means the Existing Shares together with any shares of
Company Common Stock or other securities of the Company acquired by Stockholder
in any capacity after the date hereof and prior to the termination of this
Agreement whether upon the exercise of options, warrants or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares or the like, gift, bequest, inheritance or as a successor in
interest in any capacity or otherwise.
REPRESENTATIONS AND WARRANTIES. Stockholder represents and warrants that:
a. OWNERSHIP OF SHARES. On the date hereof, Stockholder is the sole
record and Beneficial Owner of the Existing Shares consisting of the number of
shares of Company Common Stock set forth on the signature page hereto. On the
date hereof, the Existing Shares constitute all of the shares of Company Common
Stock owned of record or Beneficially Owned by Stockholder. There are no
outstanding options or other rights to acquire from Stockholder or obligations
of Stockholder to sell or to acquire, any shares of Company Common Stock.
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 1 and 8 hereof, and power to agree
to all of the matters set forth in this Agreement, in each case with respect to
all of the Existing Shares with no limitations, qualifications or restrictions
on such rights, subject to applicable securities laws, the terms of this
Agreement and the terms of the Voting Trust.
b. POWER; BINDING AGREEMENT. Stockholder has the legal capacity, power
and authority to enter into and perform all of Stockholder's obligations under
this Agreement. This Agreement has been duly and validly executed and delivered
by Stockholder and constitutes a valid and binding agreement of Stockholder,
enforceable against Stockholder in accordance with its terms except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
c. NO CONFLICTS. Except for filings under the Exchange Act, no filing
with, and no permit, authorization, consent or approval of , any state or
federal public body or authority ("Governmental Entity") is necessary for the
execution of this Agreement by Stockholder and the consummation by Stockholder
of the transactions contemplated hereby, none of the execution and delivery of
this Agreement by Stockholder, the consummation by Stockholder of the
transactions contemplated hereby or compliance by Stockholder with any of the
provisions hereof shall (i) conflict with or result in any breach of any
organizational documents applicable to Stockholder, (ii) result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, loan agreement, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which Stockholder is a party or by which
Stockholder or any of its properties or assets may be bound, or (iii) violate
any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to Stockholder or any of Stockholder's properties or
assets.
d. NO ENCUMBRANCE. Except as permitted by this Agreement, the Existing
Shares are now and, at all times during the term hereof, will be (except for
Securities disposed of after the date hereof), held by Stockholder, or by a
nominee or custodian for the benefit of Stockholder, free and clear of all
mortgages, claims, charges, liens, security interests, pledges or options,
proxies, voting trusts or agreements, understandings or arrangements or any
rights whatsoever ("Encumbrances"), except for any such Encumbrances arising
hereunder.
e. NO FINDER'S FEES. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Stockholder, except for
Hambrecht & Quist LLC.
6. RELIANCE BY PARENT. Stockholder understands and acknowledges that the
Parent is entering into the Merger Agreement in reliance upon Stockholder's
execution and delivery of this Agreement.
7. DISCLOSURE. Stockholder hereby agrees to permit the Parent to publish
and disclose in the S-4 registration statement and joint proxy statement
(including all documents and schedules filed with the Securities and Exchange
Commission) and any press release or other disclosure documents in connection
with the Merger and any transactions related thereto, to the extent required by
applicable law (including the Securities Act of 1933, as amended, and the
Exchange Act and the regulations promulgated under each of such acts)
Stockholder's identity and ownership of Company Common Stock and the nature of
Stockholder's commitments, arrangements and understandings under this Agreement.
8. CERTAIN ACTIONS. Prior to the termination of this Agreement,
Stockholder agrees not to, directly or indirectly, take any action that would
make any representation or warranty of Stockholder contained herein untrue or
incorrect.
9. DISTRIBUTIONS. In the event of a stock dividend or distribution, or
any change in the Company Common Stock by reason of any stock dividend, split-
up, recapitalization, combination, exchange of share or the like, the terms
"Existing Shares" and "Securities" will be deemed to refer to and include the
shares of Company Common Stock as well as all such stock dividends and
distributions and any shares into which or for which any or all of the
Securities may be changed or exchanged and appropriate adjustments shall be made
to the terms and provisions of this Agreement.
10. ASSIGNABILITY. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by Stockholder, on the one
hand, without the prior written consent of the Parent nor by the Parent, on the
other hand, without the prior written consent of Stockholder. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective representatives,
executors, administrators, estate, heirs, successors and assigns.
11. AMENDMENTS. This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be deemed to be one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
each party need not sign the same counterpart.
13. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referenced herein) (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject mater hereof and (ii) is not
intended to confer upon any person other than the parties hereto (and the other
Indemnified Parties) any rights or remedies hereunder.
14. 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.
15. FIDUCIARY DUTIES. Nothing in this Agreement shall, and nothing in
this Agreement shall be deemed to, prevent Stockholder from acting in accordance
with any of his fiduciary duties as a director of Company or otherwise limit the
ability of affiliates of Stockholder to take any action in any of their
capacities as a director or officer of Company.
16. CORPORATE ACTION. If prior to the execution hereof, the Board of
Directors of Company shall not have duly and validly authorized and approved by
all necessary corporate action, the Merger Agreement and the transactions
contemplated thereby, then this Agreement shall be void and unenforceable until
such time as such authorization and approval shall have been duly and validly
obtained.
17. SPECIFIC PERFORMANCE. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity.
18. ENFORCEABILITY. If any term or provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect.
* * *
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
James Steenbergen Beneficially Owned by
Stockholder: ___________
WESTELL TECHNOLOGIES, INC.
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Donald Lucas Beneficially Owned by
Stockholder: ___________
WESTELL TECHNOLOGIES, INC.
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Aamer Latif Beneficially Owned by
Stockholder: ___________
WESTELL TECHNOLOGIES, INC.
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
James Gibbons Beneficially Owned by
Stockholder: ___________
WESTELL TECHNOLOGIES, INC.
By:
Its:
EXHIBIT 6.14b
VOTING AGREEMENT
This Voting Agreement (the "Agreement") dated as of September 30, 1997 is
entered into by and between Robert C. Penny III and Melvin J. Simon, Trustees of
the Westell Technologies, Inc. Voting Trust (formerly the Electronic Information
Technologies, Inc. Voting Trust) (the "Voting Trust") dated February 23, 1994 as
amended, (together, the "Stockholder"), and Amati Communications Corporation, a
Delaware corporation (the "Company").
AGREEMENT. In consideration of the recitals, respective representations,
warranties, covenants and agreements set forth herein and in that certain
Agreement of Merger, dated as of September 30, 1997 (the "Merger Agreement"),
among Westell Technologies, Inc., a Delaware corporation ("Parent"), Kappa
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub") and the Company (the transactions contemplated by the
Merger Agreement being referred to herein as the "Merger"), the Stockholder
hereby agrees with the Company that, prior to the earlier to occur of the
valid termination of the Merger Agreement or the Effective Time (as defined in
the Merger Agreement), Stockholder will appear at any annual or special meeting
of stockholders of Parent called to consider and vote on matters relating to the
Merger (the "Meeting") or otherwise cause the Securities to be counted as
present at the Meeting for purposes of establishing a quorum and vote or consent
(or cause to be voted or consented) and will vote all of the capital stock of
Parent for which Stockholder has the power, right, option or ability to vote or
direct the voting of in favor of the amendment to the Certificate of
Incorporation of Parent required by Section 7.1(b) of the Merger Agreement and
in favor of all other matters with respect to the Merger proposed at the Meeting
and against any proposal, action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
Parent under the Merger Agreement assuming that Parent had received stockholder
approval of such amendment and such other matters with respect to the Merger.
TERMINATION. Stockholder's agreement to vote as indicated above will
expire and be of no further effect on the earlier to occur of (i) the
adjournment without continuation of the Meeting and (ii) February 28, 1998.
INDEMNIFICATION. The Company shall indemnify and hold harmless Stockholder
and Stockholder's affiliates (the "Indemnified Parties") against and from any
costs, expenses (including reasonable attorneys' fees), settlement payments,
claims, demands, judgments, fines, penalties, losses, damages and liabilities
incurred in connection with any claim, suit, action or proceeding (whether
asserted, commenced or arising before or after the Effective Time) that arises
directly or indirectly from or relates directly or indirectly to (a) the
execution, delivery or performance of this Agreement, or (b) any of the
transactions contemplated by this Agreement. In the event any such claim, suit,
action or proceeding is asserted or commenced against any Indemnified Party, (i)
the Company shall advance and pay the reasonable fees and expenses of any
counsel retained by such Indemnified Party in connection with such claim, suit,
action or proceeding promptly after receipt of a request therefor from such
Indemnified Party, and (ii) the Company shall cooperate with such Indemnified
Party and such Indemnified Party's counsel in the defense of such claim, suit,
action or proceeding. The Company agrees to pay all expenses, including
attorneys' fees, which may be incurred by any of the Indemnified Parties in
enforcing the indemnity and other obligations provided for in this paragraph.
DEFINITIONS.
a. "BENEFICIALLY OWN" OR "BENEFICIAL OWNERSHIP" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by
the same holder, securities Beneficially Owned by a person include securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
the securities of the same issuer.
b. "EXISTING SHARES" means shares of Class A Common Stock or Class B
Common Stock of the Parent (the "Parent Common Stock") Beneficially Owned by
Stockholder as of the date hereof.
c. "SECURITIES" means the Existing Shares together with any shares of
Parent Common Stock or other securities of the Parent acquired by Stockholder in
any capacity after the date hereof and prior to the termination of this
Agreement whether upon the exercise of options, warrants or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares or the like, gift, bequest, inheritance or as a successor in
interest in any capacity or otherwise.
REPRESENTATIONS AND WARRANTIES. Stockholder represents and warrants that:
a. OWNERSHIP OF SHARES. On the date hereof, Stockholder is the sole
record and Beneficial Owner of the Existing Shares consisting of the number of
shares of Parent Common Stock set forth on the signature page hereto. On the
date hereof, the Existing Shares constitute all of the shares of Parent Common
Stock owned of record or Beneficially Owned by Stockholder. There are no
outstanding options or other rights to acquire from Stockholder or obligations
of Stockholder to sell or to acquire, any shares of Parent Common Stock.
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 1 and 8 hereof, and power to agree
to all of the matters set forth in this Agreement, in each case with respect to
all of the Existing Shares with no limitations, qualifications or restrictions
on such rights, subject to applicable securities laws, the terms of this
Agreement and the terms of the Voting Trust.
b. POWER; BINDING AGREEMENT. Stockholder has the legal capacity, power
and authority to enter into and perform all of Stockholder's obligations under
this Agreement. This Agreement has been duly and validly executed and delivered
by Stockholder and constitutes a valid and binding agreement of Stockholder,
enforceable against Stockholder in accordance with its terms except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
c. NO CONFLICTS. Except for filings under the Exchange Act, no filing
with, and no permit, authorization, consent or approval of , any state or
federal public body or authority ("Governmental Entity") is necessary for the
execution of this Agreement by Stockholder and the consummation by Stockholder
of the transactions contemplated hereby, none of the execution and delivery of
this Agreement by Stockholder, the consummation by Stockholder of the
transactions contemplated hereby or compliance by Stockholder with any of the
provisions hereof shall (i) conflict with or result in any breach of any
organizational documents applicable to Stockholder, (ii) result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, loan agreement, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which Stockholder is a party or by which
Stockholder or any of its properties or assets may be bound, or (iii) violate
any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to Stockholder or any of Stockholder's properties or
assets.
d. NO ENCUMBRANCE. Except as permitted by this Agreement, the Existing
Shares are now and, at all times during the term hereof, Securities representing
no less than 51% of the voting power of the Class A and Class B Parent Common
Stock combined will be, held by Stockholder, or by a nominee or custodian for
the benefit of Stockholder, free and clear of all mortgages, claims, charges,
liens, security interests, pledges or options, proxies, voting trusts (other
than the Voting Trust) or agreements, understandings or arrangements or any
rights whatsoever ("Encumbrances"), except for any such Encumbrances arising
hereunder.
e. NO FINDER'S FEES. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Stockholder, except for
Hambrecht & Quist LLC.
6. RELIANCE BY PARENT. Stockholder understands and acknowledges that the
Company is entering into the Merger Agreement in reliance upon Stockholder's
execution and delivery of this Agreement.
7. DISCLOSURE. Stockholder hereby agrees to permit the Company to publish
and disclose in the proxy statement (including all documents and schedules
filed with the Securities and Exchange Commission) and any press release or
other disclosure documents in connection with the Merger and any transactions
related thereto, to the extent required by applicable law (including the
Securities Act of 1933, as amended, and the Exchange Act and the regulations
promulgated under each of such acts), Stockholder's identity and ownership of
Parent Common Stock and the nature of Stockholder's commitments, arrangements
and understandings under this Agreement.
8. CERTAIN ACTIONS. Prior to the termination of this Agreement,
Stockholder agrees not to, directly or indirectly, take any action that would
make any representation or warranty of Stockholder contained herein untrue or
incorrect.
9. DISTRIBUTIONS. In the event of a stock dividend or distribution, or
any change in the Parent Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of share or the like, the terms
"Existing Shares" and "Securities" will be deemed to refer to and include the
shares of Parent Common Stock as well as all such stock dividends and
distributions and any shares into which or for which any or all of the
Securities may be changed or exchanged and appropriate adjustments shall be made
to the terms and provisions of this Agreement.
10. ASSIGNABILITY. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by Stockholder, on the one
hand, without the prior written consent of the Company nor by the Company, on
the other hand, without the prior written consent of Stockholder. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
representatives, executors, administrators, estate, heirs, successors and
assigns.
11. AMENDMENTS. This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be deemed to be one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
each party need not sign the same counterpart.
13. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referenced herein) (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject mater hereof and (ii) is not
intended to confer upon any person other than the parties hereto (and the other
Indemnified Parties) any rights or remedies hereunder.
14. 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.
15. FIDUCIARY DUTIES. Nothing in this Agreement shall, and nothing in
this Agreement shall be deemed to, prevent Stockholder or affiliates of
Stockholder from acting in accordance with any of their fiduciary duties as a
director of Parent or otherwise limit the ability of Stockholder or affiliates
of Stockholder to take any action in any of their capacities as a director or
officer of Parent.
16. CORPORATE ACTION. If prior to the execution hereof, the Board of
Directors of Parent shall not have duly and validly authorized and approved by
all necessary corporate action, the Merger Agreement and the transactions
contemplated thereby, then this Agreement shall be void and unenforceable until
such time as such authorization and approval shall have been duly and validly
obtained.
17. SPECIFIC PERFORMANCE. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity.
18. ENFORCEABILITY. If any term or provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect.
* * *
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
WESTELL TECHNOLOGIES, INC. Number of Existing Shares
VOTING TRUST DATED FEBRUARY 23, 1994 Beneficially Owned by
AS AMENDED Stockholder: 19,661,068
By:
Robert C. Penny III, Voting Trustee
By:
Melvin J. Simon, Voting Trustee
AMATI COMMUNICATIONS CORPORATION
By:
Its:
EXHIBIT 6.14c
VOTING AGREEMENT DIRECTOR OF WTI
This Voting Agreement (the "Agreement") dated as of September 30, 1997 is
entered into by and between the undersigned (the "Stockholder"), and Amati
Communications Corporation, a Delaware corporation (the "Company").
AGREEMENT. In consideration of the recitals, respective representations,
warranties, covenants and agreements set forth herein and in that certain
Agreement of Merger, dated as of September 30, 1997 (the "Merger Agreement"),
among Westell Technologies, Inc., a Delaware corporation ("Parent"), Kappa
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub") and the Company (the transactions contemplated by the
Merger Agreement being referred to herein as the "Merger"), the Stockholder
hereby agrees with the Company that, prior to the earlier to occur of the
valid termination of the Merger Agreement or the Effective Time (as defined in
the Merger Agreement), Stockholder will appear at any annual or special meeting
of stockholders of Parent called to consider and vote on matters relating to the
Merger (the "Meeting") or otherwise cause the Securities to be counted as
present at the Meeting for purposes of establishing a quorum and vote or consent
(or cause to be voted or consented) and will vote all of the capital stock of
Parent for which Stockholder has the power, right, option or ability to vote or
direct the voting of in favor of the amendment to the Certificate of
Incorporation of Parent required by Section 7.1(b) of the Merger Agreement and
in favor of all other matters with respect to the Merger proposed at the Meeting
and against any proposal, action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
Parent under the Merger Agreement assuming that Parent had received stockholder
approval of such amendment and such other matters with respect to the Merger.
TERMINATION. Stockholder's agreement to vote as indicated above will
expire and be of no further effect on the earlier to occur of (i) the
adjournment without continuation of the Meeting and (ii) February 28, 1998.
INDEMNIFICATION. The Company shall indemnify and hold harmless Stockholder
and Stockholder's affiliates (the "Indemnified Parties") against and from any
costs, expenses (including reasonable attorneys' fees), settlement payments,
claims, demands, judgments, fines, penalties, losses, damages and liabilities
incurred in connection with any claim, suit, action or proceeding (whether
asserted, commenced or arising before or after the Effective Time) that arises
directly or indirectly from or relates directly or indirectly to (a) the
execution, delivery or performance of this Agreement, or (b) any of the
transactions contemplated by this Agreement. In the event any such claim, suit,
action or proceeding is asserted or commenced against any Indemnified Party, (i)
the Company shall advance and pay the reasonable fees and expenses of any
counsel retained by such Indemnified Party in connection with such claim, suit,
action or proceeding promptly after receipt of a request therefor from such
Indemnified Party, and (ii) the Company shall cooperate with such Indemnified
Party and such Indemnified Party's counsel in the defense of such claim, suit,
action or proceeding. The Company agrees to pay all expenses, including
attorneys' fees, which may be incurred by any of the Indemnified Parties in
enforcing the indemnity and other obligations provided for in this paragraph.
DEFINITIONS.
a. "BENEFICIALLY OWN" OR "BENEFICIAL OWNERSHIP" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by
the same holder, securities Beneficially Owned by a person include securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
the securities of the same issuer.
b. "EXISTING SHARES" means shares of Class A Common Stock or Class B
Common Stock of the Parent (the "Parent Common Stock") Beneficially Owned by
Stockholder as of the date hereof.
c. "SECURITIES" means the Existing Shares together with any shares of
Parent Common Stock or other securities of the Parent acquired by Stockholder in
any capacity after the date hereof and prior to the termination of this
Agreement whether upon the exercise of options, warrants or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares or the like, gift, bequest, inheritance or as a successor in
interest in any capacity or otherwise.
REPRESENTATIONS AND WARRANTIES. Stockholder represents and warrants that:
a. OWNERSHIP OF SHARES. On the date hereof, Stockholder is the sole
record and Beneficial Owner of the Existing Shares consisting of the number of
shares of Parent Common Stock set forth on the signature page hereto. On the
date hereof, the Existing Shares constitute all of the shares of Parent Common
Stock owned of record or Beneficially Owned by Stockholder. There are no
outstanding options or other rights to acquire from Stockholder or obligations
of Stockholder to sell or to acquire, any shares of Parent Common Stock.
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 1 and 8 hereof, and power to agree
to all of the matters set forth in this Agreement, in each case with respect to
all of the Existing Shares with no limitations, qualifications or restrictions
on such rights, subject to applicable securities laws, the terms of this
Agreement and the terms of the Voting Trust.
b. POWER; BINDING AGREEMENT. Stockholder has the legal capacity, power
and authority to enter into and perform all of Stockholder's obligations under
this Agreement. This Agreement has been duly and validly executed and delivered
by Stockholder and constitutes a valid and binding agreement of Stockholder,
enforceable against Stockholder in accordance with its terms except that (i)
such enforcement may be subject to applicable bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
c. NO CONFLICTS. Except for filings under the Exchange Act, no filing
with, and no permit, authorization, consent or approval of , any state or
federal public body or authority ("Governmental Entity") is necessary for the
execution of this Agreement by Stockholder and the consummation by Stockholder
of the transactions contemplated hereby, none of the execution and delivery of
this Agreement by Stockholder, the consummation by Stockholder of the
transactions contemplated hereby or compliance by Stockholder with any of the
provisions hereof shall (i) conflict with or result in any breach of any
organizational documents applicable to Stockholder, (ii) result in a violation
or breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, loan agreement, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which Stockholder is a party or by which
Stockholder or any of its properties or assets may be bound, or (iii) violate
any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to Stockholder or any of Stockholder's properties or
assets.
d. NO ENCUMBRANCE. Except as permitted by this Agreement, the Existing
Shares are now and, at all times during the term hereof will be (except for
Securities disposed of after the date hereof), held by Stockholder, or by a
nominee or custodian for the benefit of Stockholder, free and clear of all
mortgages, claims, charges, liens, security interests, pledges or options,
proxies, voting trusts or agreements, understandings or arrangements or any
rights whatsoever ("Encumbrances"), except for any such Encumbrances arising
hereunder.
e. NO FINDER'S FEES. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Stockholder, except for
Hambrecht & Quist LLC.
6. RELIANCE BY PARENT. Stockholder understands and acknowledges that the
Company is entering into the Merger Agreement in reliance upon Stockholder's
execution and delivery of this Agreement.
7. DISCLOSURE. Stockholder hereby agrees to permit the Company to publish
and disclose in the proxy statement (including all documents and schedules
filed with the Securities and Exchange Commission) and any press release or
other disclosure documents in connection with the Merger and any transactions
related thereto, to the extent required by applicable law (including the
Securities Act of 1933, as amended, and the Exchange Act and the regulations
promulgated under each of such acts) Stockholder's identity and ownership of
Parent Common Stock and the nature of Stockholder's commitments, arrangements
and understandings under this Agreement.
8. CERTAIN ACTIONS. Prior to the termination of this Agreement,
Stockholder agrees not to, directly or indirectly, take any action that would
make any representation or warranty of Stockholder contained herein untrue or
incorrect.
9. DISTRIBUTIONS. In the event of a stock dividend or distribution, or
any change in the Parent Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of share or the like, the terms
"Existing Shares" and "Securities" will be deemed to refer to and include the
shares of Parent Common Stock as well as all such stock dividends and
distributions and any shares into which or for which any or all of the
Securities may be changed or exchanged and appropriate adjustments shall be made
to the terms and provisions of this Agreement.
10. ASSIGNABILITY. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by Stockholder, on the one
hand, without the prior written consent of the Company nor by the Company, on
the other hand, without the prior written consent of Stockholder. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
representatives, executors, administrators, estate, heirs, successors and
assigns.
11. AMENDMENTS. This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be deemed to be one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
each party need not sign the same counterpart.
13. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referenced herein) (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject mater hereof and (ii) is not
intended to confer upon any person other than the parties hereto (and the other
Indemnified Parties) any rights or remedies hereunder.
14. 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.
15. FIDUCIARY DUTIES. Nothing in this Agreement shall, and nothing in
this Agreement shall be deemed to, prevent Stockholder from acting in accordance
with any of his fiduciary duties as a director of Parent or otherwise limit the
ability of affiliates of Stockholder to take any action in any of their
capacities as a director or officer of Parent.
16. CORPORATE ACTION. If prior to the execution hereof, the Board of
Directors of Parent shall not have duly and validly authorized and approved by
all necessary corporate action, the Merger Agreement and the transactions
contemplated thereby, then this Agreement shall be void and unenforceable until
such time as such authorization and approval shall have been duly and validly
obtained.
17. SPECIFIC PERFORMANCE. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity.
18. ENFORCEABILITY. If any term or provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect.
* * *
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Gary Seamans Beneficially Owned by
Stockholder:____________
AMATI COMMUNICATIONS CORPORATION
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Paul Dwyer Beneficially Owned by
Stockholder:____________
AMATI COMMUNICATIONS CORPORATION
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Robert Gaynor Beneficially Owned by
Stockholder:____________
AMATI COMMUNICATIONS CORPORATION
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Michael Brunner Beneficially Owned by
Stockholder:____________
AMATI COMMUNICATIONS CORPORATION
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Ormand Wade Beneficially Owned by
Stockholder:____________
AMATI COMMUNICATIONS CORPORATION
By:
Its:
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
Number of Existing Shares
Stefan Abrams Beneficially Owned by
Stockholder:____________
AMATI COMMUNICATIONS CORPORATION
By:
Its:
EXHIBIT 6.15
WESTELL TECHNOLOGIES, INC.
SEPTEMBER 30, 1997
Mr. James Steenbergen
President, CEO and CFO
Amati Communications Corporation
2043 Samaritan Drive
San Jose, California 95124
Dear Mr. Steenbergen:
It is our understanding that you were granted an option to purchase
500,000 shares of Amati Communications Corporation ("Amati") common stock on
November 27, 1995 at an exercise price of $4.25. It is also our understanding
that your right to exercise the option vested with respect to 25% of these
shares, or 125,000 shares at grant, and that the remaining 375,000 shares would
vest in three equal annual installments on November 27, 1996, 1997 and 1998.
In connection with the acquisition of Amati by Westell Technologies,
Inc. ("Westell"), your Amati options will be converted on the closing date into
options on Westell common stock. The number of shares covered by the Westell
options will be determined by the exchange ratio contained in the merger
agreement and the per share option price shall be adjusted so that the aggregate
option price for the Westell shares will be equal to the aggregate option price
of the Amati shares subject to your existing option. The Westell options shall
be subject to the same vesting schedule and other terms and conditions as now
exist in your outstanding Amati options. In the event Amati or Westell
terminates your full time employment with Amati or Westell without cause
following the acquisition, you will be retained as a part-time employee and/or
consultant until the date on which your Westell converted options are completely
vested.
Please indicate your agreement with the terms and conditions of the
conversion of your options by affixing your signature to the enclosed copy of
this letter and returning the same to the undersigned as soon as possible.
Very truly yours,
WESTELL TECHNOLOGIES, INC.
By:
Gary F. Seamans
I agree to the foregoing terms and conditions.
Date James Steenbergen
EXHIBIT 6.16
$5,000,000
LOAN AND SECURITY AGREEMENT
dated as of September 30, 1997
between
AMATI COMMUNICATIONS CORPORATION
as Borrower
and
WESTELL TECHNOLOGIES, INC.
as Lender
THE FOLLOWING TABLE OF CONTENTS HAS BEEN INSERTED FOR CONVENIENCE ONLY AND DOES
NOT CONSTITUTE A PART OF THIS AGREEMENT.
TABLE OF CONTENTS
PAGE
SECTION I DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . 6
1.3 Accounting and Financial Determinations . . . . . . . . . . . . . 6
SECTION II THE COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Borrowing Procedures . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Repayment of Loan . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION III NOTE EVIDENCING LOANS . . . . . . . . . . . . . . . . . . . . 7
3.1 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Recordation of Loans and Payments . . . . . . . . . . . . . . . . 7
SECTION IV INTEREST, ETC. . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Loan Interest Rate . . . . . . . . . . . . . . . . . . . . . . . 8
4.2 Default Interest Rate . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . 8
4.4 Computation of Interest . . . . . . . . . . . . . . . . . . . . . 8
SECTION V PAYMENTS AND PREPAYMENTS . . . . . . . . . . . . . . . . . . . . 9
5.1 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Making of Payments . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Due Date Extension . . . . . . . . . . . . . . . . . . . . . . . 9
5.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION VI SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Grant of Security . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 Security for Liabilities . . . . . . . . . . . . . . . . . . . . 11
6.3 Continuing Security Interest; Transfer of Note . . . . . . . . . 11
6.4 Borrower Remains Liable . . . . . . . . . . . . . . . . . . . . . 12
SECTION VII REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 12
7.1 Representations and Warranties . . . . . . . . . . . . . . . . . 12
7.1.1 Location of Collateral, etc. . . . . . . . . . . . . . . . 12
7.1.2 Ownership, No Liens, etc. . . . . . . . . . . . . . . . . 13
7.1.3 Possession and Control . . . . . . . . . . . . . . . . . . 13
7.1.4 Negotiable Documents, Instruments and
Chattel Paper . . . . . . . . . . . . . . . . . . . . . . 13
7.1.5 No Default or Event of Default . . . . . . . . . . . . . . 13
7.1.6 Incorporation by Reference . . . . . . . . . . . . . . . . 13
7.1.7 Other Agreements . . . . . . . . . . . . . . . . . . . . . 14
7.1.8 Effectiveness . . . . . . . . . . . . . . . . . . . . . . 14
SECTION VIII CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . 14
8.1 Condition Precedent to Initial Loan . . . . . . . . . . . . . . . 14
8.2 Conditions Precedent to All Loans . . . . . . . . . . . . . . . . 16
SECTION IX COVENANTS AND OTHER AGREEMENTS . . . . . . . . . . . . . . . . 17
SECTION X EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 18
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . 18
10.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.1 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 20
11.2 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . 21
11.4 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 21
11.5 Costs, Expenses, and Taxes . . . . . . . . . . . . . . . . . . . 21
11.6 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . 22
11.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.8 Severability of Provisions . . . . . . . . . . . . . . . . . . . 22
11.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.10 Submission to Jurisdiction; Waiver of Venue;
Service of Process . . . . . . . . . . . . . . . . . . . . . . 22
11.11 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 23
EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Opinion of Borrower's Counsel
EXHIBIT C Form of Copyright Security Agreement
EXHIBIT D Form of Patent Security Agreement
EXHIBIT E Form of Trademark Security Agreement
SCHEDULES
SCHEDULE I Copyright Collateral
SCHEDULE II Patent Collateral
SCHEDULE III Trademark Collateral
SCHEDULE IV Collateral Locations
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT, dated as of September 30, 1997, is
made by and between AMATI COMMUNICATIONS CORPORATION, a Delaware corporation
(the "Borrower"), and WESTELL TECHNOLOGIES, INC., a Delaware corporation
(together with its successors and assigns, the "Lender"). Capitalized terms
used herein and not otherwise defined herein shall have the respective meanings
provided in the Merger Agreement (as hereinafter defined).
RECITALS
WHEREAS, the Borrower desires that the Lender extend financing to the
Borrower pursuant to the terms of this Agreement;
WHEREAS, the Lender is willing to extend financing to the Borrower
pursuant to the terms of this Agreement for the purposes specified herein; and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition precedent thereto, Borrower, Lender and Kappa
Acquisition Corp. ("Merger Sub") have entered into that certain Agreement and
Plan of Merger of even date herewith (the "Merger Agreement"), whereby Merger
Sub will be merged with and into the Borrower and the separate corporate
existence of Merger Sub will cease and the Borrower will continue as the
surviving corporation under the General Corporation Law of the State of
Delaware;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions hereof, the parties hereto agree
as follows:
SECTION I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Affiliate" has the meaning provided in the Merger Agreement.
"Agreement" means this Loan and Security Agreement, as hereafter
amended, modified, restated, refinanced, refunded or renewed from time to time
in whole or in part.
"Authorized Officer" means any one of the following officers of the
Borrower: James Steenbergen and Ronald Carlini.
"Borrower" - see Preamble.
"Business Day" has the meaning provided in the Merger Agreement, which
is also a day on which banks conduct business in Chicago.
"Code" means the Internal Revenue Code of 1986 and all rules and
regulations thereunder, in each case as from time to time in effect.
"Collateral" - see Section 6.1.
"Commitment" - see Section 2.1.
"Computer Hardware and Software" shall mean (a) all computer and other
electronic data processing hardware, integrated computer systems, central
processing units, memory units, display terminals, printers, features, computer
elements, card readers, tape drives, hard and soft disk drives, cables,
electrical supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware, whether now owned,
licensed or leased or hereafter acquired by the Borrower; (b) all software
programs, including source code and object code whether now owned, licensed or
leased or hereafter acquired by the Borrower, designed for use on the computers
and electronic data processing hardware described in clause (a) above; (c) all
firmware associated therewith, whether now owned, licensed or leased or
hereafter acquired by the Borrower; and (d) all documentation for such hardware,
software and firmware described in the preceding clauses (a), (b) and (c),
whether now owned, licensed or leased or hereafter acquired by the Borrower.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under section 414(b) or section
414(c) of the Code or section 4001 of ERISA.
"Copyright Collateral" shall mean all right, title and interest in and
to all of the Borrower's registered and unregistered copyrights and rights in
copyrighted works owned by others (including, without limitation, copyrights for
any of the Computer Hardware and Software), copyright registrations and
copyright applications, which, in the case of applications or registrations, are
now or hereafter issued by or filed with the CRO or any similar office or agency
of any other countries, including, without limitation, the copyrighted works,
copyright registrations and copyright applications listed on Schedule I attached
hereto and made a part hereof.
"CRO" shall mean the U.S. Copyright Office.
"Default" means any event which if it continues uncured would, with
lapse of time or notice, or both, constitute an Event of Default.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"Effective Date" means the date of this Agreement as set forth in the
Preamble.
"Environmental Laws" has the meaning provided in the Merger Agreement.
"Equipment" - see Section 6.1.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" means any of the events described in Section 10.1.
"GAAP" - see Section 1.3.
"General Intangibles" - see Section 6.1.
"Intellectual Property Collateral" shall mean all of the Borrower's
past, present and future: Trademark Collateral; Copyright Collateral; Patent
Collateral; all reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the foregoing; all license agreements related to
any of the foregoing set forth in this definition; all income, royalties,
damages and payments now and hereafter due or payable with respect thereto,
including without limitation, payments, under all licenses entered into in
connection therewith and damages, settlements and payments for past or future
infringements thereof; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, source codes, object codes and other physical
manifestations, embodiments or incorporation of the foregoing set forth in this
definition; and the right to sue for all past, present and future infringements
of any of the foregoing set forth in this definition.
"Inventory" - see Section 6.1.
"Lender" - see Preamble.
"Liabilities" means all obligations of the Borrower to the Lender
howsoever created, arising or evidenced, whether direct or indirect, joint or
several, absolute or contingent, or now or hereafter existing, or due or to
become due, which arise out of or in connection with this Agreement, the Note or
any other Related Document.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), claim
or other priority or preferential arrangement of any kind or nature whatsoever.
"Loan(s)" - see Section 2.1.
"Material Adverse Change" or "Material Adverse Effect" has the meaning
provided in the Merger Agreement.
"Merger Agreement" - see third recital.
"Note" - see Section 3.1.
"Official Bodies" means any governmental or political subdivision or
any agency, authority, bureau, commission, department or instrumentality of
either or any court or arbitrator.
"Payment Date" - see Section 4.3.
"Patent Collateral" shall mean all of the Borrower's patents, patent
applications, inventions, trade secrets, know-how, proprietary information and
rights in patents, inventions, trade secrets, know-how and proprietary
information owned by others, which, in the case of patents or patent
applications, are now or hereafter issued by or filed with the PTO or any
similar office or agency of any other countries, including, without limitation,
the patents and patent applications listed on Schedule II attached hereto and
made part thereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan," as such term is defined in
section 3(2) of ERISA (including a multiemployer plan as defined in section
4001(a)(3) of ERISA), to which the Borrower or any corporation, trade or
business that is, along with the Borrower, a member of a Controlled Group, may
have liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under section 4069 of ERISA.
"Permitted Liens" shall mean the liens and security interest as to
specific equipment securing purchase money debt for the purchase thereof listed
on the LIEN ANNEX ATTACHED HERETO and the blanket liens of Silicon Valley Bank
also listed thereon securing loans not exceeding $2,000,000 in aggregate
principal amount.
"Person" has the meaning provided in the Merger Agreement.
"Prime Rate" means the prime rate of interest announced by money
center banks as published in the midwest edition of The Wall Street Journal on
the date preceding the date on which interest is determined, such rate to change
as and when such published rate changes.
"PTO" shall mean the U.S. Patent and Trademark Office.
"Receivables" - see Section 6.1.
"Related Contracts" - see Section 6.1.
"Related Documents" shall mean the Note, the Copyright Security
Agreement, the Patent Security Agreement and the Trademark Security Agreement.
"Reportable Event" shall have the meaning assigned to such term in
ERISA.
"Subsidiary" has the meaning provided in the Merger Agreement.
"Taxes" - see Section 5.5.
"Termination Date" means September 30, 1999.
"Trademark Collateral" shall mean all right, title and interest in and
to all of the Borrower's registered and unregistered trademarks, service marks,
trade names, designs, logos, indicia, and/or other source and/or business
identifiers and the goodwill of the business relating to any and all of the
foregoing, rights in such properties owned by others and any registrations or
applications therefor, which, in the case of applications or registrations, are
now or hereafter issued by or filed with the PTO, with any similar office or
agency of any state, territory or possession of the United States or any similar
office or agency of any other countries or, if not so filed, are otherwise used
in the United States, any state, territory or possession thereof or any other
country, including, without limitation, the marks, names, logos, indicia,
trademark registrations and trademark applications listed on Schedule III
attached hereto and made a part hereof.
"U.C.C." shall mean the Uniform Commercial Code or comparable statute
or any successor statute thereto, as in effect from time to time in the relevant
jurisdiction.
SECTION 1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the above-defined
meanings when used in any certificate, report or other document made or
delivered pursuant to this Agreement, unless the context therein shall clearly
otherwise require.
(b) The words "hereof," "herein," "hereunder" and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
(c) The words "amended or modified" when used in this Agreement shall
mean with respect to this Agreement or any Related Document, this Agreement or
Related Document as from time to time, in whole or in part, amended, modified,
supplemented, restated, refinanced, refunded or renewed.
(d) In the computation of periods of time in this Agreement from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
SECTION 1.3 Accounting and Financial Determinations. For purposes of
this Agreement, unless otherwise specified, all accounting terms used herein
shall be interpreted, all accounting determinations and computations hereunder
shall be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with, those generally accepted accounting
principles ("GAAP") applied in the preparation of the financial statements
referred to in Section 3.7 of the Merger Agreement.
SECTION II THE COMMITMENT
SECTION 2.1 Commitment. Subject to the terms and conditions hereof,
Lender agrees to make loans (herein individually called a "Loan" and
collectively called "Loans") during the period beginning five business days from
the date of this Agreement and ending on the earlier of (i) the Business Day
prior to the date that the meeting of stockholders of Borrower is held to
approve the Merger (as defined in the Merger Agreement), or the termination of
the Merger Agreement, to the Borrower in an aggregate principal amount not to
exceed $5,000,000 less any amounts outstanding under the line of credit
agreement with Silicon Valley Bank. The Loans shall be disbursed in accordance
with Section 2.2, and once repaid may not thereafter be reborrowed. The
foregoing commitment of the Lender is herein called its "Commitment."
SECTION 2.2 Borrowing Procedures. Any Authorized Officer of the
Borrower may request a Loan prior to the Termination Date in Dollars on any
Business Day by giving the Lender telephonic or facsimile notice (which notice
shall be irrevocable once given and shall be promptly confirmed in writing if
given telephonically). Each request must be received by the Lender prior to
12:00 noon, Chicago time, on the proposed date of borrowing (which must be a
Business Day) and shall specify (a) the principal amount of such borrowing and
(b) the proposed date of such borrowing. Each Loan shall be in a principal
amount of $100,000 or an integral multiple of $100,000 in excess thereof.
Subject to satisfaction of the applicable conditions precedent set forth in
Section 8 hereof, the Lender shall make the proceeds of each Loan available to
the Borrower by causing an amount of same day funds equal to the principal
amount of the Loan to be credited to the account of the Borrower at a bank
designated by Borrower.
SECTION 2.3 Repayment of Loan. Subject to the provisions of
Sections 5.2 and 10.1, the Loans shall be payable (and the Borrower agrees to
pay such Loans) in full in immediately available funds on the Termination Date.
SECTION III NOTE EVIDENCING LOANS
SECTION 3.1 Note. The Loans of the Lender shall be evidenced by a
promissory note (herein called the "Note") substantially in the form set forth
in Exhibit A, with appropriate insertions, payable to the order of the Lender in
a principal amount equal to $5,000,000.
SECTION 3.2 Recordation of Loans and Payments. The date and amount
of each Loan made by the Lender and of each repayment of principal thereon
received by the Lender shall be recorded by the Lender in its records, or at its
option on a schedule attached to the Note. The aggregate unpaid principal
amount so recorded shall be rebuttable presumptive evidence of the principal
amount owing and unpaid on the Note, in the absence of manifest error. The
failure to so record or any error in so recording any such amount shall not,
however, limit or otherwise affect the obligations of the Borrower hereunder or
under the Note to repay the principal amount of the Loans together with all
interest accrued thereon.
SECTION IV INTEREST, ETC.
SECTION 4.1 Loan Interest Rate. Prior to the occurrence of an Event
of Default, with respect to each Loan, the Borrower hereby promises to pay
interest on the unpaid principal amount thereof for the period commencing on the
date such Loan is made until such Loan is paid in full, at the following rates:
(a) for the first $1 million of borrowings hereunder, a rate per
annum equal to the Prime Rate plus 2%;
(b) for all borrowings in excess of $1 million, a rate per annum
equal to the Prime Rate plus 2-1/2%.
SECTION 4.2 Default Interest Rate. Upon the occurrence of an Event
of Default or in the event of a termination of the Merger Agreement pursuant to
Section 8.1(b)(i), the Borrower hereby promises to pay interest on the unpaid
principal amount of any Loan for the period commencing on the date such Event of
Default occurs until such Loan is paid in full (or such Event of Default is
waived in writing by the Lender) at a rate per annum equal to the sum of: (a)
the interest rate effective on the day of such Event of Default, changing as and
when such interest rate changes but never to fall below the interest rate
effective on the day of the Event of Default, plus (b) three percent (3%) per
annum.
SECTION 4.3 Interest Payment Dates. Accrued interest on the Loans
shall be payable monthly in arrears on the first Business Day of each month and
at maturity (each a "Payment Date"), commencing with the first of such dates to
occur after the Effective Date. After maturity (whether by acceleration,
required prepayment or otherwise), accrued interest on all Loans shall be
payable on demand.
SECTION 4.4 Computation of Interest. All interest on the Loans shall
be computed for the actual number of days elapsed on the basis of a 360-day
year.
SECTION V PAYMENTS AND PREPAYMENTS
SECTION 5.1 Voluntary Prepayments. The Borrower may from time to
time prepay the Loans in whole or in part, provided that (a) each partial
prepayment of a Loan shall be in a principal amount of $100,000 or an integral
multiple thereof, and (b) any prepayment of the entire principal amount of all
Loans shall include accrued interest to the date of prepayment.
SECTION 5.2 Mandatory Prepayments. The Borrower shall make mandatory
repayments of the Loans as follows:
(a) If the Merger Agreement shall be terminated by the Borrower
pursuant to Section 8.1(e) of the Merger Agreement (i.e., acceptance
of a Superior Proposal as provided in the Merger Agreement), the
Borrower shall, immediately on demand, repay the Loans (including
interest accrued thereon) and any other Liabilities in full in
immediately available funds; and
(b) If the Merger Agreement shall be terminated for any reason under
Section 8.1 of the Merger Agreement (other than as set forth above or
pursuant to Sections 8.1(b)(ii), Borrower shall, within 180 days of demand,
repay the Loans (including interest accrued thereon) and any other
Liabilities in full in immediately available funds.
SECTION 5.3 Making of Payments. Except as otherwise provided, all
payments in respect of the Loans shall be made by the Borrower to the Lender in
immediately available funds. All such payments shall be made to the Lender at
its account at Bank One Chicago, N.A. or as otherwise directed by Lender, not
later than 12:30 P.M., Chicago time, on the date due; and funds received after
that hour shall be deemed to have been received by the Lender on the next
following Business Day.
SECTION 5.4 Due Date Extension. If any payment provided for
hereunder falls due on a day which is not a Business Day, then such due date
shall be extended to the next following Business Day (except as provided in the
last sentence of Section 4.3), and additional interest shall accrue and be
payable for the period of such extension.
SECTION 5.5 Use of Proceeds. The proceeds of the Loans shall be used
by the Borrower for general working capital purposes to the extent permitted by
the Merger Agreement. The Borrower will not, directly or indirectly, use any
part of such proceeds for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or to extend credit to any Person for the purpose of purchasing
or carrying any such margin stock.
SECTION VI SECURITY
SECTION 6.1 Grant of Security. The Borrower hereby assigns, pledges
and grants to the Lender a security interest in all of the Borrower's right,
title and interest in and to the following, whether now or hereafter existing,
acquired or created (the "Collateral"):
(a) As such terms are defined in the U.C.C., all "equipment", in all
of its forms, wherever located and all fixtures and all parts thereof and
all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefore, including Computer Hardware and
Software (any and all of the foregoing being the "Equipment");
(b) As such terms are defined in the U.C.C., all "inventory", in all
of its forms, wherever located including, without limitation, (i) all raw
materials and work in process therefor, finished goods thereof and
materials used or consumed in the manufacture or production thereof,
(ii) all goods in which the Borrower has an interest in mass or a joint or
other interest or right of any kind (including, without limitation, goods
in which the Borrower has an interest or right as consignee), and (iii) all
goods which are returned to or repossessed by the Borrower, and all
accessions thereto and products thereof and documents therefor, including
Computer Hardware and Software (any and all of the foregoing being the
"Inventory");
(c) As such terms are defined in the U.C.C., all "accounts"
(including, without limitation, any intercompany accounts), "contracts",
"contract rights", "chattel paper", "documents", "instruments", "deposit
accounts" and "general intangibles", and other obligations of any kind
whether or not arising out of or in connection with the sale or lease of
goods or the rendering of services, and all rights now or hereafter
existing in and to all security agreements, guarantees, leases and other
contracts securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, deposit accounts,
general intangibles and other obligations including, without limitation, to
the extent applicable, the Material Contracts (as defined in the Merger
Agreement), and all payments under contract rights constituting Collateral
(any and all of the foregoing being the "Receivables," and any and all
documents and written instruments related thereto being the "Related
Contracts");
(d) All Intellectual Property Collateral;
(e) All Computer Hardware and Software;
(f) All books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this
Section 6.1;
(g) All of the Borrower's other personal property and rights of every
kind and description and interests therein, including Computer Hardware and
Software;
(h) All products, rents, issues, profits, returns, income and
proceeds of and from and claims relating to any and all of the foregoing
Collateral (including, without limitation, proceeds which constitute
property of the types described in clauses (a) through (g) of this Section
6.1), and, to the extent not otherwise included, all (i) payments under
insurance (whether or not the Lender is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, and (ii) cash.
SECTION 6.2 Security for Liabilities. This Agreement secures the
payment of all of the Liabilities now or hereafter existing, whether for
principal, interest, fees, expenses or otherwise, and all obligations of the
Borrower now or hereafter existing under this Agreement or any Related Document.
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts which constitute Liabilities but for the fact that they
are unenforceable or not allowable owing to the existence of bankruptcy,
reorganization or similar proceedings involving the Borrower or any of its
Subsidiaries.
SECTION 6.3 Continuing Security Interest; Transfer of Note. This
Agreement shall create a continuing security interest in the Collateral and
shall:
(a) remain in full force and effect until payment in full of all
Liabilities and the termination of the Commitment;
(b) be binding upon the Borrower, its successors, transferees and
assigns; and
(c) inure to the benefit of the Lender, its successors, transferees
and assigns.
Without limiting the generality of the foregoing clause (c), the Lender may
assign or otherwise transfer (in whole or in part) the Loans or the Commitment,
or any portion thereof, to any other Person or entity, and such other Person or
entity shall thereupon become vested with all the rights and benefits in respect
the security interest granted to the Lender under this Agreement or any Related
Document or otherwise. Upon the payment in full of all Liabilities and the
termination of the Commitment, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to the Borrower. Upon
any such termination, the Lender will, at the Borrower's sole expense, execute
and deliver to the Borrower such documents as the Borrower shall reasonably
request to evidence such termination.
SECTION 6.4 Borrower Remains Liable. Anything herein to the contrary
notwithstanding:
(a) Borrower shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and shall perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed;
(b) the exercise by the Lender of any of its rights hereunder
shall not release the Borrower from any of its duties or obligations
under the contracts or agreements included in the Collateral; and
(c) the Lender shall not have any obligation or liability under
such contracts or agreements included in the Collateral by reason of
this Agreement, nor shall the Lender be obligated to perform any of
the obligations or duties of the Borrower thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION VII REPRESENTATIONS AND WARRANTIES
SECTION 7.1 Representations and Warranties. The Borrower represents
and warrants to the Lender as set forth in this Section 7.
SECTION 7.1.1 Location of Collateral, etc. All of the Equipment and
Inventory is located at the places specified in Item A and Item B, respectively,
of Schedule IV hereto. The chief place of business and chief executive office
of the Borrower and the office where Borrower Keeps its records concerning the
Receivables, and all originals of all chattel paper that evidence Receivables,
and the original copies of the contracts, are located at its address specified
in Item C of Schedule IV hereto. The Borrower has not been known by any legal
name different from the one set forth on the signature page hereto, nor has the
Borrower been the subject of any merger or other corporate reorganization (other
than as contemplated by the Merger Agreement). None of the Receivables is
evidenced by a promissory note or other instrument.
SECTION 7.1.2 Ownership, No Liens, etc. The Borrower is the legal
and beneficial owner of the Collateral free and clear of any Lien, security
interest, charge or encumbrance except for the security interest created by this
Agreement and Permitted Liens. No effective financing statement or other
document similar in effect covering all or any part of the Collateral is on file
in any recording office, except such as may have been filed by the Borrower
relating to this Agreement and Permitted Liens.
SECTION 7.1.3 Possession and Control. The Borrower has exclusive
possession and control of the Equipment and Inventory.
SECTION 7.1.4 Negotiable Documents, Instruments and Chattel Paper.
The Borrower has, contemporaneously herewith, delivered to the Lender possession
of all originals of all negotiable documents (other than checks received by the
Borrower in the ordinary course of business), instruments and chattel paper
currently owned or held by the Borrower (duly endorsed in blank, if requested by
the Lender).
SECTION 7.1.5 No Default or Event of Default. No Default or Event of
Default has occurred and is continuing with respect to the Borrower and no
violation or breach of any provision has occurred and is continuing under the
Merger Agreement.
SECTION 7.1.6 Incorporation by Reference. The Borrower agrees that
the representations and warranties of the Borrower set forth in Article III of
the Merger Agreement shall be incorporated by reference in this Agreement in
their entirety as if fully set forth herein with the same effect as if applied
to this Agreement. All capitalized terms set forth in Article III of the Merger
Agreement shall have the meanings provided in the Merger Agreement; provided
that for purposes of this Agreement, to the extent set forth in the Merger
Agreement, the term "Company" shall be deemed to refer to the Borrower. Such
representations and warranties shall not be affected in any manner by the
termination of the Merger Agreement.
SECTION 7.1.7 Other Agreements. Neither the Borrower nor any
Subsidiary is a party to any indenture, loan, or credit agreement, or to any
lease or other agreement or instrument, or subject to any charter or corporate
restriction which could have a Material Adverse Effect, or the ability of the
Borrower to carry out its respective obligations under this Agreement or any
Related Documents. Neither the Borrower nor any Subsidiary is in default in any
respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or instrument
material to its business.
SECTION 7.1.8 Effectiveness. Each representation and warranty made
or to be made in this Agreement by the Borrower shall be deemed remade as of and
on the date of each Loan made from time to time under or in connection with this
Agreement with the same effect as if made contemporaneously with the making of
each such Loan and as of and at the date of delivery of any additional
Collateral to the Lender.
SECTION VIII CONDITIONS PRECEDENT
SECTION 8.1 Condition Precedent to Initial Loan. The obligation of
the Lender to make the initial Loan to the Borrower is subject to the condition
precedent that the Lender shall have received on or before the day of such Loan
each of the following, in form and substance satisfactory to the Lender and its
counsel:
(a) Note. The Note duly executed by the Borrower;
(b) Intellectual Property Security Documents. The Copyright Security
Agreement, the Patent Security Agreement and the Trademark Security
Agreement duly executed by the Borrower;
(c) Financing Statements. (i) acknowledgment copies of
financing statements (UCC-1) duly filed under the U.C.C. of all
jurisdictions necessary or, in the opinion of the Lender or its
counsel, desirable to perfect the security interest created by this
Agreement; and (ii) certified copies of Requests for Information (Form
UCC-11) identifying all of the financing statements on file with
respect to the Borrower in all jurisdictions referred to under clause
(i) herein, indicating that no party claims an interest in any of the
Collateral, except for Permitted Liens;
(d) Insurance. Evidence of the existence of insurance on the
property of the Borrower, together with evidence establishing the
Lender as a loss payee and/or additional insured on all related
insurance policies;
(e) Certificate of the Borrower. A certificate (dated as of the
date of this Agreement) of the Secretary of the Borrower certifying:
(i) a copy of the certificate of incorporation of the Borrower as
theretofore amended; (ii) a copy of the bylaws of the Borrower, as
theretofore amended; (iii) copies of all corporate action taken by the
Borrower, including resolutions of its Board of Directors, authorizing
the execution, delivery, and performance of this Agreement and the
Related Documents by the Borrower and each other document to be
delivered pursuant to this Agreement and authorizing borrowings by
each of the Authorized Officers; and (iv) the names and true
signatures of the officers of the Borrower authorized to sign the Loan
Documents to which it is a party and the other documents to be
delivered by the Borrower under this Agreement;
(f) Certified Charter and Good Standing. A certificate of the
due formation, valid existence and good standing of the Borrower in
its state of incorporation, issued by the appropriate authorities of
such jurisdictions, and certificates of the Borrower's good standing
and due qualification to do business, issued by appropriate officials
in any states in which Borrower owns Collateral subject to this
Agreement;
(g) Opinion of counsel for the Borrower. A favorable opinion of
Heller Ehrman White and McAuliffe, counsel for the Borrower, in
substantially the form of Exhibit B and as to such other matters as
the Lender may reasonably request;
(h) Merger Agreement. The Borrower, the Lender and the Merger
Sub shall have executed and delivered the Merger Agreement on terms
and conditions satisfactory to the Lender;
(i) Process Letter. A letter from a process agent acceptable to
the Lender agreeing to receive service of process on behalf of the
Borrower and each of its Subsidiaries, unless a registered agent
exists in the State of Illinois for such party;
(j) Silicon Valley Bank Waivers and Agreement. Lender shall have
received from Silicon Valley Bank an agreement to the execution of the
Merger Agreement, this Agreement and borrowings hereunder, a permanent
waiver of existing covenant defaults, confirmation of Borrower's ability to
borrower under its line of credit, and an agreement in favor of Lender
providing that (i) Lender shall receive notices of all defaults and events
of default, (ii) that prior to initiating any collection or foreclosure
action against Borrower or its assets that Lender will be given 30 days
prior written notice and a right, excercisable within that period, to
purchase Silicon Valley Banks' loans to Borrower, without recourse, for a
price equal to the principal amount thereof plus accrued interest and (iii)
proceeds of Lender's loans, if deposited in such bank, shall not be
available to such bank without written consent of Borrower and Lender to
repay any of such bank's outstanding loans.
(k) The Lender shall have received such other approvals, opinions, or
documents as the Lender may reasonably request.
SECTION 8.2 Conditions Precedent to All Loans. The obligation of the
Lender to make each Loan (including the initial Loan) shall be subject to the
further conditions precedent that on the date of such Loan:
(a) No Further Possible Borrowings from Bank. Borrower shall have
certified to Lender than it has no further current borrowing capacity at
such time under its line of credit with Silicon Valley Bank.
(b) The following statements shall be true and correct and the
Lender shall have received a certificate signed by an Authorized
Officer of the Borrower dated the date of such Loan, stating that:
(i) The representations and warranties contained in
Section 7 of this Agreement and Article III of the Merger
Agreement are true and correct on and as of the date of such
Loan as though made on and as of such date;
(ii) No Default or Event of Default has occurred and
is continuing, or would result from the borrowing of such
Loan; and
(iii) No Material Adverse Change or Material Adverse Effect
has occurred since the date of the most recent financial
statements delivered or required to be delivered pursuant to the
Merger Agreement;
(iv) No material Litigation exists, except as disclosed in
Section 3.12 of the Merger Agreement; and
(c) The Lender shall have received such other approvals,
opinions, or documents as the Lender may reasonably request.
SECTION IX COVENANTS AND OTHER AGREEMENTS
So long as the Note shall remain unpaid and the Lender shall have any
Commitment under this Agreement, the Borrower will:
(a) Limit on Debt. Not permit borrowings from Silicon Valley Bank and
Lender to exceed $5,000,000 in aggregate at any time.
(b) Notice of Litigation. Promptly after the commencement
thereof, notify the Lender of all actions, suits, and proceedings
before any court or governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign, affecting the
Borrower or any Subsidiary, which, if determined adversely to the
Borrower or such Subsidiary, could have a Material Adverse Effect;
(c) Notice of Defaults and Events of Default. As soon as
possible and in any event within five (5) days after the occurrence of
each Default or Event of Default, a written notice setting forth the
details of such Default or Event of Default and the action which is
proposed to be taken by the Borrower with respect thereto;
(d) ERISA Reports. Promptly after the filing or receiving
thereof, copies of all reports, including annual reports, and notices
which the Borrower or any Subsidiary files with or receives from the
PBGC or the U.S. Department of Labor under ERISA; and as soon as
possible and in any event within ten (10) days after the Borrower or
any Subsidiary knows or has reason to know that any Reportable Event
has occurred with respect to any Pension Plan or that the PBGC or the
Borrower or any Subsidiary has instituted or will institute
proceedings under Title IV of ERISA to terminate any Pension Plan, the
Borrower will deliver to the Lender a certificate of the chief
financial officer of the Borrower setting forth details as to such
Reportable Event or Pension Plan termination and the action the
Borrower has taken or proposes to take with respect thereto;
(e) Proxy statements, etc. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements, and
reports which the Borrower or any Subsidiary sends to its
shareholders, and copies of all regular, periodic, and special
reports, and all registration statements which the Borrower or any
Subsidiary files with any governmental authority which may be
substituted therefor, or with any national securities exchange;
(f) Tax Filings; Payment of Taxes. At the time of filing thereof,
copies of all tax returns filed with any Official Body;
(g) Reports to Other Creditors. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other
party pursuant to the terms of any indenture, loan, or credit or
similar agreement and not otherwise required to be furnished to the
Lender pursuant to any other clause of this Section 10.8; and
(h) Incorporation by Reference. Comply with the covenants and
other agreements set forth in Article V and Article VI of the Merger
Agreement and the terms and provisions set forth therein shall be
incorporated by reference in this Agreement in their entirety as if
fully set forth herein with the same effect as if applied to this
Agreement. All capitalized terms set forth in Article V and Article
VI of the Merger Agreement shall have the meanings provided in the
Merger Agreement; provided that for purposes of this Agreement, to the
extent set forth in the Merger Agreement, the term "Company" shall be
deemed to refer to the Borrower. Such covenants and agreements shall
not be affected in any manner by the termination of the Merger
Agreement.
(i) General Information. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower or
any Subsidiary as the Lender may from time to time reasonably request.
SECTION X EVENTS OF DEFAULT
SECTION 10.1 Events of Default. If any of the following events
("Events of Default") shall occur:
(a) The Borrower shall fail to pay the principal of, or interest
on, the Note or any of the other Liabilities as and when due and
payable;
(b) Any representation or warranty made or deemed made by the
Borrower in this Agreement or any Related Document or which is
contained in any certificate, document, opinion, or financial or other
statement furnished at any time under or in connection with this
Agreement or any Related Document shall prove to have been incorrect
in any material respect on the date originally made (e.g. the date of
this Agreement with respect to representations herein or in the Merger
Agreement), and the effect of which is the Lender's termination of the
Merger Agreement;
(c) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section IX of this Agreement, and
the effect of which is the Lender's termination of the Merger
Agreement;
(d) The Borrower shall fail to perform or observe any other
term, covenant, or agreement contained in this Agreement or any
Related Document (other than the Note and those Sections referenced in
the foregoing clause (c)) to which it is a party on its part to be
performed or observed, which failure is not cured within ten (10)
days, and the effect of which is the Lender's termination of the
Merger Agreement;
(e) The Borrower or any of its Subsidiaries (i) shall generally
not, or shall be unable to, or shall admit in writing its inability to
pay its debts as such debts become due; or (ii) shall make an
assignment for the benefits of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver, or trustee for
it or a substantial part of its assets; or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangements,
readjustment of debt, dissolution, or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (iv) shall
have any such petition or application filed or any such proceeding
commenced against it in which an order for relief is entered or
adjudication or appointment is made and which remains undismissed for
a period of sixty (60) days or more; or (v) by any act or omission
shall indicate its consent to, approval of, or acquiescence in any
such petition, application, or proceeding, or order for relief, or the
appointment of a custodian, receiver, or trustee for all or any
substantial part of its properties; or (vi) shall suffer any such
custodianship, receivership, or trusteeship to continue undischarged
for a period of sixty (60) days or more;
(f) This Agreement, the Copyright Security Agreement, the Patent
Security Agreement or the Trademark Security Agreement shall at any
time after their execution and delivery for any reason cease: (i) to
create a valid and perfected first priority security interest in and
to the Collateral covered thereby or (ii) to be in full force and
effect or shall be declared null and void, or the validity or
enforceability thereof shall be contested by the Borrower, or the
Borrower shall deny it has any further liability or obligation under
or shall fail to perform any of its obligations under any of the
foregoing;
(g) The Borrower or any of its Subsidiaries shall violate or
otherwise fails to perform its obligations under the Merger Agreement
(subject to cure periods provided therein) and the effect of such violation
or failure is the Lender's termination of the Merger Agreement.
SECTION 10.2 Remedies. If any Event of Default described in
Section 10(e) shall occur and be continuing, the Commitment shall immediately
terminate and all Liabilities of the Borrower shall become immediately due and
payable, all without presentment, demand, protest or notice of any kind; and, in
the case of any other Event of Default, the Lender may declare the Commitment to
be terminated and all Liabilities with respect to the Borrower to be due and
payable, whereupon the Commitment shall immediately terminate and all
Liabilities with respect to the Borrower shall become immediately due and
payable, all without presentment, demand, protest or notice of any kind. The
Lender shall promptly advise the Borrower of any such declaration, but failure
to do so shall not impair the effect of such declaration.
SECTION XI MISCELLANEOUS
SECTION 11.1 Amendments, Etc. No amendment, modification,
termination, or waiver of any provision of this Agreement or any Related
Document to which the Borrower is a party, nor consent to any departure by the
Borrower from this Agreement or any Related Document to which it is a party,
shall in any event be effective unless the same shall be in writing and signed
by the Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 11.2 Notices, Etc. All notices and other communications
provided for under this Agreement and under the other Related Documents to which
the Borrower is a party shall be in writing (including telegraphic or facsimile
communication) and mailed or telecommunicated or delivered, if to the Borrower
or Lender at the addresses set forth in the Merger Agreement, or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 12.2. All such notices and communications shall, when mailed or
telecommunicated, be effective when deposited in the mails, transmitted by
facsimile or delivered to the telegraph company, respectively, addressed as
aforesaid, except that notices to the Lender pursuant to the provisions of
Section 2 shall not be effective until received by the Lender.
SECTION 11.3 No Waiver; Remedies. No failure on the part of the
Lender to exercise, and no delay in exercising, any right, power, or remedy
under this Agreement or any Related Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under this Agreement or
any Related Document preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided in the this Agreement and
the Related Documents are cumulative and not exclusive of any remedies provided
by law.
SECTION 11.4 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights under this Agreement or any Related Document to which
the Borrower is a party without the prior written consent of the Lender.
SECTION 11.5 Costs, Expenses, and Taxes. The Borrower agrees to pay
on demand all costs and expenses in connection with the preparation, execution,
delivery, filing, recording, and administration of any of this Agreement and the
Related Documents, including, without limitation, the reasonable fees and
expenses of counsel for the Lender, and local counsel who may be retained by
said counsel, with respect thereto and with respect to advising the Lender as to
its rights and responsibilities under this Agreement or any of the Related
Documents, and all costs and expenses, if any, in connection with the
enforcement of this Agreement or any of the Related Documents. In addition, the
Borrower shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of this Agreement or any of the Related Documents and the other
documents to be delivered under this Agreement or any Related Document, and
agrees to save the Lender harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees.
SECTION 11.6 Right of Setoff. Upon the occurrence of any Event of
Default, the Lender is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being expressly waived by the
Borrower), to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by the Lender to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement, the Note or any other Related Document, irrespective of
whether or not the Lender shall have made any demand under this Agreement, the
Note or such other Related Document and although such obligations may be
unmatured. The Lender agrees promptly to notify the Borrower after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of the Lender
under this Section 12.6 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which the Lender may have.
SECTION 11.7 Governing Law. This Agreement, the Note and the other
Related Documents shall be governed by, and construed in accordance with, the
laws of the State of Illinois.
SECTION 11.8 Severability of Provisions. Any provision of this
Agreement or any Related Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Related Document or affecting the validity
or enforceability of such provision in any other jurisdiction.
SECTION 11.9 Headings. Section headings in this Agreement and the
Related Documents are included in this Agreement and such Related Documents for
the convenience of reference only and shall not constitute a part of this
Agreement or the applicable Related Documents for any other purpose.
SECTION 11.10 Submission to Jurisdiction; Waiver of Venue; Service of
Process. The Borrower, on behalf of itself and each Subsidiary (a) hereby
irrevocably submits to the jurisdiction of any Illinois State or Federal court
sitting in Chicago, Illinois over any action or proceeding arising out of or
relating to this Agreement or the Related Documents, and the Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Illinois State or Federal court and (b) agrees
not to institute any legal action or proceeding against the Lender or the
directors, officers, employees, agents or property of any thereof, arising out
of or relating to this Agreement, in any court other than as hereinabove
specified in this Section 11.10. The Borrower, on behalf of itself and each
Subsidiary, hereby irrevocably waives, to the fullest extent permitted by law,
any objection it may now or hereafter have to the laying of venue in any action
or proceeding (whether brought by the Borrower, any Subsidiary, the Lender or
otherwise) in any court hereinabove specified in this Section 11.10 as well as
any right it may now or hereafter have, to remove any such action or proceeding,
once commenced, to another court on the grounds of forum non conveniens or
otherwise. The Borrower on behalf of itself and each Subsidiary agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
SECTION 11.11 WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT, ANY RELATED DOCUMENT OR UNDER ANY OTHER DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH, OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY; THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AMATI COMMUNICATIONS CORPORATION
By:
Name:
Title:
WESTELL TECHNOLOGIES, INC.
By:
Name:
Title: