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EXHIBIT 2.1
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
by and among
ANTEC CORPORATION,
BROADBAND PARENT CORPORATION,
BROADBAND TRANSITION CORPORATION,
NORTEL NETWORKS LLC,
NORTEL NETWORKS INC.,
and
ARRIS INTERACTIVE L.L.C.
Dated as of April 9, 2001
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FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
This First Amendment to the Agreement and Plan of Reorganization, dated
as of April 9, 2001 (this "Amendment"), is by and among ANTEC CORPORATION, a
corporation organized under the laws of Delaware (the "Company"), BROADBAND
PARENT CORPORATION, a corporation organized under the laws of Delaware
("Newco"), BROADBAND TRANSITION CORPORATION, a corporation organized under the
laws of Delaware ("Transition"), NORTEL NETWORKS INC., a corporation organized
under the laws of Delaware ("Nortel Networks"), NORTEL NETWORKS LLC, a limited
liability company organized under the laws of Delaware, and ARRIS INTERACTIVE
L.L.C., a limited liability company organized under the laws of Delaware
("Existing Venture"). Capitalized terms not otherwise defined herein shall have
the respective meanings given them in the Agreement and Plan of Reorganization,
dated as of October 18, 2000, by and among the parties hereto (the "Original
Agreement" and, as amended hereby, the "Agreement").
WITNESSETH:
WHEREAS, the Company, Newco, Transition, Nortel Networks, Nortel
Networks LLC, and Existing Venture entered into the Original Agreement, whereby
the parties agreed: (1) that Transition would merge with and into the Company
(the "Merger") so that the Company would be the surviving corporation in the
Merger and a wholly-owned subsidiary of Newco and the stockholders of the
Company would receive shares of Newco Common Stock and (2) that Nortel Networks
LLC would contribute its interest in the Existing Venture to Newco in exchange
for (i) shares of Newco Common Stock and (ii) cash as described in the Original
Agreement; and
WHEREAS, the respective Boards of Directors or the Managing Member (as
applicable) of the Company, Newco, Transition, Nortel Networks, and Nortel
Networks LLC have determined that it is advisable and in the best interests of
their respective companies and their respective stockholders or members (as
applicable) to modify the terms of the Original Agreement so that, among other
things, (i) a portion of the Existing Venture's currently outstanding
indebtedness to Nortel Networks LLC pursuant to the Existing Venture Loan
Agreement (including all of the amounts attributable to the Company's
Participating Interest (as defined below) therein) be contributed to the capital
of the Existing Venture, (ii) Nortel Networks LLC contribute its entire equity
interest in the Existing Venture to Newco in exchange for 37 million shares of
Newco Common Stock (the "Newco Shares") and no cash, (iii) the remaining portion
of the Existing Venture's currently outstanding indebtedness to Nortel Networks
LLC under the Existing Venture Loan Agreement, and certain other currently
outstanding obligations of the Existing Venture to Nortel Networks and/or its
Affiliates, be deemed paid in full and satisfied by the issuance to Nortel
Networks LLC of the New Membership Interest (as defined below) and the guaranty
by Newco of the redemption of the New Membership Interest, and (iv) contingent
payment in the amount of up to $10 million plus the amount of cash and cash
equivalents then held by the Existing Venture is made to Nortel Networks LLC at
and immediately following the Closing, in each case as further described in, and
on the terms and conditions set forth in, the Agreement as amended hereby; and
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WHEREAS, the respective Boards of Directors or the Managing Member (as
applicable) of the Company, Newco, Transition, Nortel Networks, and Nortel
Networks LLC have determined that it is advisable and in the best interests of
their respective companies and their respective stockholders or members (as
applicable) to amend the Original Agreement and certain of the pre-existing
Ancillary Agreements to provide for the foregoing and the other matters set
forth herein.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
ARTICLE I
AMENDMENTS TO THE AGREEMENT
A. Article I of the Original Agreement shall be amended by making
additions of and amendments to the following definitions:
1. The definition of "Affiliate" in the Original
Agreement shall be amended and restated in its entirety as follows: "
"Affiliate" of a party shall mean a person or entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such party; provided, however, that the Existing
Venture shall not, for the purposes of this Agreement or any Ancillary
Agreement, be, or be deemed or construed to be, an affiliate of either (i) the
Company or any of its Affiliates or (ii) Nortel Networks or any of its
Affiliates, except that the Existing Venture shall be deemed and construed to be
an affiliate of the Company (and its Affiliates), but not of Nortel Networks (or
its Affiliates), as of and after the Closing.".
2. The definition of "Agreement" in the Original
Agreement shall be deleted in its entirety and "Agreement" shall have the
meaning set forth in the introductory paragraph of this Amendment.
3. The definition of "Ancillary Agreements" in the
Original Agreement shall be amended by making the following additions and
modifications:
(a) Subsection (i) shall be deleted in its
entirety and replaced with the following: "(i) Amended and Restated Investor
Rights Agreement among Newco, Nortel Networks and Nortel Networks LLC dated as
of April 9, 2001 (the "Investor Rights Agreement"), attached as Exhibit C;";
(b) Subsection (v) shall be deleted in its
entirety and replaced with the following: "(v) Intellectual Property Agreement
between the Existing Venture and Nortel Networks Limited (the "Intellectual
Property Agreement"), attached as Exhibit E;";
(c) Subsection (vi) shall be deleted in its
entirety and replaced with the following: "(vi) Termination Agreement among the
Company, Nortel Networks, Nortel Networks LLC, Nortel Networks Limited, a
Canadian corporation, Newco and the Existing Venture, dated October 18, 2000
(the "Original Termination Agreement"), attached as Exhibit F, as amended by the
First Amendment to Termination Agreement among the same parties, dated as
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of April 9, 2001 (the "Termination Amendment" and, together with the Original
Termination Agreement, the "Termination Agreement"), attached as Exhibit F-2;";
(d) Subsection (x) shall be added as follows: "(x) Second Amended
and Restated Limited Liability Company Agreement of the Existing Venture, dated
as of the Closing Date, providing, among other things, for the issuance to
Nortel Networks LLC of the New Membership Interest at the Closing as
contemplated by Sections 4.01(a) and 4.02(d), the partial redemption of the same
immediately following the Closing as contemplated by Section 4.07, other matters
set forth in Exhibit H and such other matters as may be reasonably agreed by
Nortel Networks LLC and the Company at or prior to the Closing (the "New
Operating Agreement").";
(e) Subsection (xi) shall be added as follows: "(xi) Subordinated
Guaranty of Newco in favor of Nortel Networks LLC, dated as of the Closing Date,
with such terms as are set forth in Exhibit I-2 and such other terms and in such
form as may be reasonably agreed by Nortel Networks and the Company at or prior
to the Closing (the "Guaranty");"; and
(f) Subsection (xii) shall be added as follows: "(xii) Release and
Amendment Agreement among the Company, Newco, Transition, Nortel Networks,
Nortel Networks LLC and Existing Venture dated as of April 9, 2001, attached as
Exhibit J.".
4. The definition of "Contemplated Financing" shall be added in
alphabetic order as follows: " "Contemplated Financing" shall have the meaning
ascribed to such term in Section 7.17.".
5. The definition of "Closing Date Nortel Redemption" shall be
added in alphabetic order as follows: " "Closing Date Nortel Redemption" shall
have the meaning ascribed to such term in Section 4.07.".
6. The definition of "Existing Venture Cash Balance" shall be
added in alphabetic order as follows: " "Existing Venture Cash Balance" shall
mean the U.S. dollar amount of cash and cash equivalents held by the Existing
Venture on the Business Day immediately preceding the Closing Date."
7. The definition of "Guaranty" shall be added in alphabetic
order as follows: " "Guaranty" shall have the meaning ascribed to such term in
clause (xi) of the definition of the term "Ancillary Agreements" in this Section
1.01.".
8. The definition of "Interest" shall be added in alphabetic
order as follows: " "Interest" shall have the meaning ascribed to such term in
the Existing Venture Loan Agreement, provided that, for the avoidance of doubt,
such term specifically excludes the New Membership Interest.".
9. The definition of "New Membership Interest" shall be added in
alphabetic order as follows: " "New Membership Interest" shall mean the limited
liability company interest in the Existing Venture to be issued to Nortel
Networks LLC at the Closing as contemplated by Sections 4.01(a) and 4.02(d),
with such terms as are set forth in this Agreement (including Exhibit H) and
such other terms as may be reasonably agreed by Nortel Networks LLC and the
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Company at or prior to the Closing, all such terms to be reflected in the New
Operating Agreement.".
10. The definition of "New Membership Interest Balance" shall be
added in alphabetic order as follows: " "New Membership Interest Balance" shall
have the meaning ascribed to it in Section 4.02(f).".
11. The definition of "Newco Shares" in the Original Agreement
shall be deleted in its entirety and "Newco Shares" shall have the meaning set
forth in the recitals to this Amendment for all purposes of the Agreement as
amended hereby.
12. The definition of "Nortel Amount Payable" shall be added in
alphabetic order as follows: " "Nortel Amount Payable" shall have the meaning
ascribed to such term in Section 4.02(e)."
13. The definition of "Nortel Redemption Amount" shall be added in
alphabetic order as follows: " "Nortel Redemption Amount" shall mean the amount,
if any, permitted by the terms of the Contemplated Financing to be borrowed by
the Existing Venture and paid to Nortel Networks LLC on the Closing Date
immediately following the Closing in connection with the Closing Date Nortel
Redemption (as contemplated by Section 4.07 and Exhibit H), but not greater than
the amount of $10,000,000.00.".
14. The definition of "Obligations" shall be added in alphabetic
order as follows: " "Obligations" shall have the meaning ascribed to such term
in the Existing Venture Loan Agreement (provided that the royalties referenced
in clause (z) of Section 4.02(d)(ii) of the Agreement do not constitute
Obligations for the purposes of the Agreement).".
15. The definition of "Outside Closing Date" in the Original
Agreement shall be amended by deleting such definition in its entirety and
inserting the following in lieu thereof: " "Outside Closing Date" shall mean the
earlier of (A) July 31, 2001, and (B) such date following the termination of the
commitment for the Contemplated Financing as Nortel Networks, in its sole
discretion, concludes that the Company will not be able to fulfill the financing
condition set forth in Section 8.03(f). For these purposes the commitment for
the Contemplated Financing shall be deemed to be terminated: (i) when the
Company has received notice from the lenders that the commitment is terminated,
(ii) when the Company will not be able to meet the financing conditions under
the commitment for the Contemplated Financing and the lenders have indicated
their unwillingness to modify or waive such conditions to permit consummation of
the Contemplated Financing, or (iii) if the Company fails to confirm in writing
to Nortel Networks, within two (2) Business Days of any written request for such
confirmation by Nortel Networks, the Company's good faith and reasonable belief
that it will be able to fulfill the financing conditions or negotiate
modifications or waivers of the terms of the commitment for the Contemplated
Financing to permit consummation of the Contemplated Financing, which
confirmation shall specify the actions to be taken by the Company to meet the
lenders' requirements and the Company's reasons for believing that such
requirements will be satisfied, all of which shall be reasonably satisfactory to
Nortel Networks; provided that any modification or waiver of the financing
conditions or otherwise of the terms of the commitment for the Contemplated
Financing to permit consummation of the Contemplated Financing as referenced
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in clauses (ii) and (iii) of this sentence which requires modification of any of
the terms of the Agreement or any Ancillary Agreement or otherwise requires any
action or omission not specified in the Agreement or the Ancillary Agreements to
be taken or omitted to be taken by Nortel Networks or any of its Affiliates, or
adversely affects any of the material rights of Nortel Networks or any of its
Affiliates set forth in the Agreement or any Ancillary Agreement, shall be
conclusively deemed to constitute termination of the commitment for the
Contemplated Financing for the purposes of clause (B) of the sentence above.".
16. The definition of "Participating Interest" shall be added in
alphabetic order as follows: " "Participating Interest" shall mean,
collectively, the Company's Optional Participating Interest (if any) and
Mandatory Participating Interest (as such terms are defined in the Existing
Venture Loan Agreement).".
17. The definition of "Year 2001 Loan Amount" shall be added in
alphabetic order as follows: " "Year 2001 Loan Amount" shall have the meaning
ascribed to such term in Section 4.01(a).".
18. The definition of "Year-End 2000 Loan Amount" shall be added
in alphabetic order as follows: " "Year-End 2000 Loan Amount" shall mean the
amount of $124,132,911.60.".
19. The definition of "1999 Amount Payable" shall be added in
alphanumeric order as follows: " "1999 Amount Payable" shall have the meaning
ascribed to such term in Section 4.02(d)."
20. The definition of "2000 Amount Payable" shall be added in
alphanumeric order as follows: " "2000 Amount Payable" shall have the meaning
ascribed to such term in Section 4.02(d)."
21. The definition of "2001 Amount Payable" shall be added in
alphanumeric order as follows: " "2001 Amount Payable" shall have the meaning
ascribed to such term in Section 4.02(d)."
22. The definition of "2001 Interim Period" shall be added in
alphanumeric order as follows: " "2001 Interim Period" shall mean the period
from and including January 1, 2001 to and including the Closing Date.".
B. Article II of the Original Agreement shall be amended by
deleting Section 2.01(c) in its entirety and inserting the following in lieu
thereof:
"(c) Certificate of Incorporation and By-Laws. The certificate of
incorporation and by-laws of Transition, as in effect immediately prior
to the Effective Time, but with the heading and Article 1 of the
certificate of incorporation amended to read: "The name of the
Corporation is ANTEC Corporation," and the by-laws shall be amended to
reflect the name change, and shall be those of the Surviving
Corporation until thereafter changed or amended as provided therein or
by applicable law.".
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C. Article IV of the Original Agreement shall be amended by
deleting Sections 4.01, 4.02, 4.03 and 4.04 in their entirety and inserting the
following in lieu thereof:
"4.01. Indebtedness Under Existing Venture Loan Agreement.
In connection with the Existing Venture Loan Agreement:
(a) at the Closing, any and all Obligations
(including, for the avoidance of doubt, the unpaid royalties
payable by the Existing Venture outstanding as of December 31,
2000 in the aggregate amount of approximately $14,000,000
(subject to final reconciliation by the Company and Nortel
Networks in good faith prior to the Closing), which royalties
shall, for the purposes of the Agreement, be deemed to have
been advanced to the Existing Venture under the Existing
Venture Loan Agreement as of January 1, 2001, together with
interest thereon from January 1, 2001 until the Closing at the
rate specified in the Existing Venture Loan Agreement)
incurred by the Existing Venture under the Existing Venture
Loan Agreement on or after January 1, 2001 (other than any
interest accruing on the Year-End 2000 Loan Amount for the
2001 Interim Period) shall be deemed paid in full and
satisfied by the issuance of the New Membership Interest by
the Existing Venture to Nortel Networks LLC and the execution
and delivery of the Guaranty (the amount of such Obligations,
the "Year 2001 Loan Amount");
(b) at the Closing, (i) the Company shall
contribute to the capital of the Existing Venture all of the
Company's Participating Interest (including the portion
thereof attributable to interest accrued but unpaid under the
Existing Venture Loan Agreement on the portion of the
Obligations represented by the Year-End 2000 Loan Amount for
the 2001 Interim Period), which Participating Interest was
equal, as of December 31, 2000 and prior to the addition of
interest for the 2001 Interim Period, to $9,834,343.15, (ii)
Nortel Networks LLC shall contribute to the capital of the
Existing Venture all of the Obligations remaining outstanding
after the payment in full and satisfaction of the portion of
such obligations equal to the Year 2001 Loan Amount as set
forth in Section 4.01(a), less the amount of the Company's
Participating Interest contributed to the capital of the
Existing Venture pursuant to clause (i) of this Section
4.01(b) (the amount of such contribution by Nortel Networks
LLC was equal, as of December 31, 2000 and prior to the
addition of interest for the 2001 Interim Period, to
$114,298,568.45), and (iii) the capital accounts of the
Company and Nortel Networks LLC in the Existing Venture
attributable to their respective Interests shall be
appropriately adjusted to reflect the foregoing contributions
to the capital of the Existing Venture (which shall be deemed
to occur prior to the issuance of the New Membership Interest
to Nortel Networks LLC), and the Company's and Nortel Networks
LLC's respective Interests also shall be adjusted, on the
basis of the Existing Venture valuation of $122,000,000.00, to
reflect the same;
(c) prior to the Closing, the Company, at the
Company's sole election, may require the Existing Venture to
make an election pursuant to Section 754 of the Code;
(d) at the Closing, upon consummation of the
transactions contemplated by Sections 4.01(a) and (b) above,
the Existing Venture Loan Agreement
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shall terminate (as set forth in greater detail in, and
subject to, the Termination Agreement), and no further amounts
may be advanced thereunder; and
(e) prior to the Closing, the Existing Venture
shall not make any payments under the Existing Venture Loan
Agreement without the prior written consent of Nortel Networks
LLC.
4.02. Satisfaction of Existing Obligations.
(a) [Intentionally Omitted]
(b) [Intentionally Omitted]
(c) [Intentionally Omitted]
(d) At the Closing, the Existing Venture
shall issue the New Membership Interest, and Newco shall execute and
deliver the Guaranty, in each case to Nortel Networks LLC. Such
issuance of the New Membership Interest and the execution and delivery
of the Guaranty shall be deemed to constitute payment in full and
satisfaction of the following obligations of the Existing Venture:
(i) the portion of the Obligations
equal to the Year 2001 Loan Amount, as set forth in Section 4.01(a);
and
(ii) all amounts owed by the
Existing Venture, as of the Closing, to Nortel Networks and/or its
Affiliates for purchases of goods and/or services and/or royalties
(other than any amounts deemed advanced under the Existing Venture Loan
Agreement), including (x) in respect of purchases of goods and/or
services by the Existing Venture on or prior to December 31, 1999, the
aggregate amount of $17,200,000 (the "1999 Amount Payable"), (y) in
respect of purchases of goods and/or services by the Existing Venture
with respect to the year ended December 31, 2000, the aggregate amount
of approximately $45,000,000 (subject to final reconciliation by the
Company and Nortel Networks in good faith prior to the Closing) (the
"2000 Amount Payable"), and (z) the aggregate amount owed to Nortel
Networks and/or its Affiliates as of the Closing relating to (A)
purchases of goods and/or services by the Existing Venture with respect
to the 2001 Interim Period, and (B) royalties payable by the Existing
Venture to Nortel Networks and/or its Affiliates with respect to the
2001 Interim Period (such aggregate amount, the "2001 Amount Payable").
(e) At the Closing, the obligations of the
Existing Venture described in clause (ii)(z) of Section 4.02(d) above
shall be offset by the aggregate amount (the "Nortel Amount Payable")
owed by Nortel Networks and its Affiliates to the Existing Venture
relating to purchases of goods and/or services from the Existing
Venture by Nortel Networks and/or its Affiliates at all times prior to
the Closing, as reflected in Section 4.02(f) below, and all obligations
of Nortel Networks and/or or its Affiliates relating to such purchases
(other than the obligation to return to the Existing Venture the
inventory of Existing Venture products held by Nortel Networks and its
Affiliates as of
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the Closing, as set forth on Schedule 8.01(f)) shall be deemed paid in
full and satisfied in full as of the Closing.
(f) In connection with the issuance by the Existing
Venture of the New Membership Interest to Nortel Networks LLC and the
execution by Newco and delivery to Nortel Networks LLC of the Guaranty,
as contemplated by Sections 4.01(a) and 4.02(d) above, all of the
right, title and interest of Nortel Networks and its Affiliates
(including Nortel Networks LLC) in and to the obligations and amounts
set forth in clauses (i) and (ii) of Section 4.02(d), as adjusted by
operation of Section 4.02(e), shall be deemed contributed by or on
behalf of Nortel Networks LLC to the capital of the Existing Venture.
The initial capital account balance of Nortel Networks LLC in the
Existing Venture attributable to the New Membership Interest shall, as
of the Closing, be equal to the New Membership Interest Balance. For
the purposes of this Agreement, the term "New Membership Interest
Balance" shall mean (i) the sum of (A) the Year 2001 Loan Amount, (B)
the 1999 Amount Payable, (C) the 2000 Amount Payable and (D) the 2001
Amount Payable, less (ii) the sum of the Nortel Amount Payable and the
Existing Venture Cash Balance. The Year 2001 Loan Amount, the 2001
Amount Payable, the Nortel Amount Payable, the Nortel Redemption Amount
and the Existing Venture Cash Balance shall, subject to the other
provisions of this Agreement, be determined by Nortel Networks and the
Company in good faith as close to (but prior to) the Closing as
reasonably practicable.
4.03. [Intentionally Omitted].
4.04. Contribution. At the Closing, immediately after
consummation of all of the transactions contemplated by Sections 4.01
and 4.02, in exchange for Nortel Networks LLC's Interest in the
Existing Venture, free and clear of any Liens, Newco shall issue to
Nortel Networks LLC the Newco Shares, as follows (all such
transactions, collectively, the "Contribution"):
(a) Nortel Networks LLC shall transfer all of
its Interest in the Existing Venture to Newco by delivering to Newco an
executed Instrument of Assignment and Assumption and thereafter
delivering to Newco such other documents as Newco may reasonably
request to effect the transfer on the books and records of the Existing
Venture; and
(b) Newco shall issue the Newco Shares to Nortel
Networks LLC, and shall deliver to Nortel Networks LLC one or more
stock certificates in the aggregate representing the Newco Shares in
the name of Nortel Networks LLC or such other subsidiary of Nortel
Networks as Nortel Networks may specify in a notice delivered to Newco
not less than two Business Days prior to the Closing."
D. Article IV of the Original Agreement shall be amended by
deleting the first sentence in Section 4.05 in its entirety and inserting the
following in lieu thereof:
"At the Closing, each of the Company and Nortel Networks LLC shall
execute and deliver the New Operating Agreement, amending and restating
in its entirety
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the Amended and Restated Limited Liability Company Agreement of the
Existing Venture LLC, dated as of March 31, 1999 (the "Existing Venture
Operating Agreement").".
E. Article IV of the Original Agreement shall be amended by
adding at the end thereof a new Section 4.07 reading in its entirety as follows:
"On the Closing Date, immediately following the Closing and the
consummation of the Contemplated Financing, the Existing Venture shall
pay to Nortel Networks LLC, as the holder of the New Membership
Interest and in partial redemption thereof (the "Closing Date Nortel
Redemption"), the Nortel Redemption Amount, in cash in immediately
available U.S. funds.
F. Article V of the Original Agreement shall be amended by
deleting Section 5.01(h) in its entirety and inserting the following in lieu
thereof:
"(h) Amendments. Amend the Company, Newco or
Transition certificate of incorporation or by-laws, except that Newco
may amend the Newco certificate of incorporation to contain terms
identical to the Company's certificate of incorporation as in effect on
the date hereof except that there shall be 325,000,000 authorized
shares of stock and except that Newco's name shall be changed to "Arris
Group, Inc."
G. Article V of the Original Agreement shall be amended by
inserting at the end of the existing language of Section 5.02(b)(i) the
following:
"; provided, however, that the actions and omissions relating to
operations of the Existing Venture specified on Schedule 5.02(b) to the
Agreement shall be conclusively deemed to be permitted by the
provisions of this Section 5.02(b), and no such actions or omissions
shall constitute, or be deemed or construed to constitute, a breach or
violation of this Section 5.02(b)."
H. Article V of the Original Agreement shall be amended by
deleting Section 5.02(b)(ii) in its entirety and inserting the following in lieu
thereof:
"(ii) Distributions. Permit the Existing Venture to make any
distributions to members (provided that the foregoing shall not apply
to royalty payments, or other payments under commercial agreements, by
the Existing Venture), except as otherwise provided in Section 4.01 or
Section 4.02."
I. Article VII of the Original Agreement shall be amended by:
1. amending Section 7.13(a) by adding the following
sentence at the end of such Section 7.13(a):
"Without limiting the generality of the foregoing, the Company
shall keep Nortel Networks apprised of the status of all discussions with the
lenders with respect to the Contemplated Financing (or any addition, deletion,
amendment, modification, extension or
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termination of the same or of any material term thereof), and shall provide
Nortel Networks with (i) a written status report relating to such discussions
not less frequently than every two weeks, and (ii) in any event, immediate
written notice of any fact, circumstance or development which may affect the
ability of the Company, Newco and the Existing Venture to consummate the
Contemplated Financing in accordance with its terms.";
2. deleting Section 7.17 in its entirety and inserting the
following in lieu thereof:
"7.17 Financing. Each of the Company and Newco shall use
reasonable best efforts to close on the financing (the "Contemplated Financing")
referenced in the commitment letters described in Section 6.01(u) above.
Further, in the event that the Company and Newco are not able to close on the
financing referenced in such commitment letters, each of the Company and Newco
shall use its respective reasonable best efforts, both prior to and after the
Closing if necessary, to close on a bank or other financing that would provide,
on such terms (including availability and duration) as the Company in good faith
believes are reasonable, working capital sufficient to fund their operations for
the period from the Closing Date and until December 31, 2002 in accordance with
the projections for such operations for such period which were provided by the
Company to Nortel Networks on March 12, 2001 (subject to adjustment of such
projections for any changes in the business occurring between the date hereof
and the Closing Date which were not contemplated by such projections).";
3. deleting the first sentence of Section 7.21 in its entirety
and inserting the following in lieu thereof:
"Each of the parties hereto agrees to negotiate in good faith,
prior to the Closing, the following agreements and instruments:
(a) the Sales Representative/Distribution
Agreement;
(b) the Transition Services Agreement;
(c) the Supply and Manufacturing Agreement;
(d) the Development Agreement;
(e) the exhibits and schedules to the
Intellectual Property Rights Agreement;
(f) the New Operating Agreement; and
(g) the Guaranty,
containing terms consistent with (i) with respect to the agreements listed in
clauses (a) through (d) above, the term sheet therefor attached hereto as
Exhibit I, as amended, as such terms may have been further developed and/or
modified by the parties in discussions occurring during the period from October
18, 2000 to and including ▇▇▇▇▇ ▇, ▇▇▇▇, (▇▇) with respect to the exhibits and
schedules listed in clause (e), the parties' discussions relating thereto during
the period from October 18, 2000 to and including April 9, 2001, and (iii) with
respect to the New Operating Agreement and the Guaranty, the other provisions of
this Agreement (including Exhibit H and Exhibit I-2).";
4. amending the second sentence of Section 7.21 by adding (i) the
words "listed in items (a) through (d) above" after the word "agreements" in the
second line, (ii) the word "such"
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before the word "unresolved" in the second line, and (iii) the word "such"
before the word "unresolved" in the third line; and
5. deleting Section 7.22 in its entirety and inserting the
following in lieu thereof:
"7.22 Amendments. Newco shall amend the Newco certificate
of incorporation to contain terms identical to the Company's certificate of
incorporation as in effect on the date hereof except that there shall be
325,000,000 authorized shares of stock and except that Newco's name shall be
changed to "Arris Group, Inc.".
J. Article VIII of the Original Agreement shall be amended by
1. deleting Section 8.01(f) in its entirety and inserting the
following in lieu thereof:
"(f) Inventory. Certain matters relating to the return to the
Existing Venture of the inventory of Existing Venture products held by
Nortel Networks and its Affiliates as of the Closing, payment by the
Existing Venture for the same, and other matters relating to such
inventory shall be addressed and resolved by the parties as set forth
in Schedule 8.01(f)."; and
2. adding, at the end of Section 8.01, a new paragraph (g) of
such Section 8.01 reading in its entirety as follows:
"(g) New Operating Agreement and Guaranty. The Company and Nortel
Networks LLC shall have reached agreement on the form and substance of
the New Operating Agreement and the Guaranty.".
K. Section 8.02(a) of Article VIII of the Original Agreement
shall be amended by adding "(i)" after the word "except" in the seventh line of
such Section and before the phrase "as would not have or reasonably be expected
to have", and by adding a new clause at the end of the sentence reading in its
entirety as follows:
", or (ii) as may arise or result from any action or omission
contemplated by the proviso of Section 5.02(b)(i) and Schedule 5.02(b)."
L. Article VIII of the Original Agreement shall be amended by
adding, at the end of Section 8.02, a new paragraph (f) of such Section 8.02
reading in its entirety as follows:
"(f) Financing. The Company, Newco and Existing Venture shall have
obtained bank or other financing on terms no less favorable to Newco
and the Company than those described in Exhibit A hereto, or the
Company, Newco and Existing Venture shall have sufficient working
capital and cash availability (from cash on hand, operations,
borrowings under the Company's current credit facility or any
replacement thereof, any equity financings and/or asset sales, and all
other reasonably available sources), on such terms (including
availability and duration, if applicable) as the Company in good faith
believes are reasonable, to fund their operations for the period from
the Closing Date and until December 31, 2002 in accordance with the
projections for such operations for such period which were
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provided by the Company to Nortel Networks on March 12, 2001 (subject
to adjustment of such projections for any changes in the business
occurring between the date hereof and the Closing Date which were not
contemplated by such projections)."
M. Article VIII of the Original Agreement shall be amended by
adding, at the end of Section 8.03, a new paragraph (f) and a new paragraph (g)
of such Section 8.03 reading in their entirety as follows:
"(f) Financing. (i) The Company, Newco and Existing Venture shall
have obtained bank or other financing on terms no less favorable to
Newco and the Company than those described in Exhibit A, (ii) true,
correct and complete copies of the definitive documentation for such
bank or other financing shall have been provided to Nortel Networks,
and (iii) no term or provision of such bank or other financing shall be
materially different from, or in addition to, those set forth in
Exhibit A, Exhibit H or Exhibit I-2, as applicable, in a manner that
(A) restricts the ability of Nortel Networks to sell or transfer shares
of Newco common stock (it being understood that if the definitive
documentation for such financing provides that an acquisition by any
Person of shares of Newco common stock comprising less than 30% of the
then outstanding such shares, whether in one transaction or in a series
of transactions, constitutes a default or an event of default, such
provision shall be deemed to be "materially different" and to restrict
the ability of Nortel Networks to transfer such shares for the purposes
of this clause (iii)(A)), or (B) materially and adversely affects the
ability of the Existing Venture to make payments in redemption of the
New Membership Interest as contemplated by Exhibit H or any other
payments due or to become due to Nortel Networks or its Affiliates
(whether under the Agreement or any Ancillary Agreement or otherwise)."
"(g) New Membership Interest Balance. The New Membership Interest
Balance shall not exceed $100,000,000.00."
N. Article IX of the Original Agreement shall be amended by
deleting Section 9.01(c) in its entirety and inserting the following in lieu
thereof:
"(c) Delay. At any time prior to the Effective Time, by Nortel
Networks or, if the Company's Board of Directors so determines, by the
Company, in the event that the Transactions are not consummated by the
Outside Closing Date except to the extent that the failure of the
Transactions then to be consummated arises out of or results from the
knowing action or inaction of the party seeking to terminate pursuant
to this Section 9.01(c) which action or inaction is in violation of its
obligations under this Agreement."
O. Exhibit A to the Original Agreement shall be deleted and
replaced with Exhibit A to this Amendment, Exhibit C to the Original Agreement
shall be deleted and replaced with Exhibit B to this Amendment, Exhibit E to the
Original Agreement shall be deleted and replaced with Exhibit C to this
Amendment, Exhibit D to this Amendment shall be added as Exhibit F-2
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to the Agreement, Exhibit H to the Original Agreement shall be deleted and
replaced with Exhibit E to this Amendment, Exhibit F to this Amendment shall be
added as Exhibit I-2 to the Agreement, Exhibit G to this Amendment shall be
added as Exhibit J to the Agreement, Schedule 5.01(b) to this Amendment shall be
added as Schedule 5.01(b) to the Agreement and Schedule 8.01(f) to this
Amendment shall be added as Schedule 8.01(f) to the Agreement.
P. Section 6.01(b)(iii) of the Company Disclosure Schedule is
hereby deleted and replaced with Exhibit H to this Amendment.
Q. Except for the amendments expressly set forth above, the
Original Agreement shall remain unchanged and in full force and effect.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
A. Each of the parties hereto represents and warrants to the
other that it has all requisite power and authority to execute and deliver, and
to perform its obligations under, this Amendment.
B. The Company hereby represents and warrants that
(1) Subject, in the case of the consummation of the Merger, to
receipt of the requisite approval and adoption of the "agreement of merger" (as
such term is used in Section 251 of the DGCL) contained in the Agreement and the
Merger by the holders of a majority of the outstanding shares of Company Common
Stock entitled to vote thereon, the Company Board having unanimously adopted a
resolution approving such "agreement of merger" and declaring its advisability,
with ▇▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ abstaining, this Amendment and all applicable additional
Ancillary Agreements and amendments to and/or restatements of pre-existing
Ancillary Agreements contemplated by this Amendment have been duly authorized by
all necessary corporate action of the Company, Newco and Transition and their
respective Boards of Directors (assuming that neither Nortel Networks nor Nortel
Networks LLC is an "interested stockholder" of the Company, Newco or Transition
under Section 203 of the DGCL immediately before the execution and delivery of
the Agreement), prior to the date hereof (which action has not been rescinded or
modified in any way). The execution and delivery of this Amendment and all
applicable additional Ancillary Agreements and amendments to and/or restatements
of pre-existing Ancillary Agreements contemplated by this Amendment by the
Company, Newco and Transition have been duly authorized by the respective Boards
of Directors of the Company, Newco and Transition and by the Company as the sole
shareholder of Newco and by Newco as the sole shareholder of Transition. No
other corporate proceedings on the part of Newco or Transition are necessary to
authorize this Amendment or any of the applicable additional Ancillary
Agreements and amendments to and/or restatements of pre-existing Ancillary
Agreements contemplated by this Amendment.
(2) This Amendment and each amendment and/or restatement of each
of the pre-existing Ancillary Agreements to be executed and delivered as of the
date hereof constitutes, and each other Ancillary Agreement when executed and
delivered at the Closing will constitute, a legal, valid and binding obligation
of the Company, Newco and/or Transition, as applicable,
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enforceable in accordance with the terms of this Amendment or such Ancillary
Agreement, as the case may be (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles, whether considered at law or
in equity).
C. Nortel Networks and Nortel Networks LLC hereby represent and
warrant that
(1) This Amendment and all applicable additional Ancillary
Agreements and amendments to and/or restatements of pre-existing Ancillary
Agreements contemplated by this Amendment have been duly authorized and approved
by all necessary corporate action of Nortel Networks and Nortel Networks LLC and
their respective Board of Directors and Managing Member prior to the date hereof
(which action has not been rescinded or modified in any way). The execution and
delivery of this Amendment and all applicable additional Ancillary Agreements
and amendments to and/or restatements of pre-existing Ancillary Agreements
contemplated by this Amendment by Nortel Networks and Nortel Networks LLC have
been duly authorized by all requisite corporate or limited liability company (as
applicable) action on the parts of Nortel Networks and Nortel Networks LLC. No
other corporate proceedings on the parts of Nortel Networks and Nortel Networks
LLC are necessary to authorize this Amendment or any of the applicable
additional Ancillary Agreements and amendments to and/or restatements of
pre-existing Ancillary Agreements contemplated by this Amendment.
(2) This Amendment and each amendment and/or restatement of each
of the pre-existing Ancillary Agreements to be executed and delivered as of the
date hereof constitutes, and each other Ancillary Agreement when executed and
delivered at the Closing will constitute, a legal, valid and binding obligation
of Nortel Networks and/or Nortel Networks LLC, as applicable, enforceable in
accordance with the terms of this Amendment or such Ancillary Agreement, as the
case may be (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles, whether considered at law or in equity).
ARTICLE III
MISCELLANEOUS
The provisions of Article X of the Original Agreement shall apply to
this Amendment as if set forth herein in their entirety. To the extent that any
provisions of the Existing Venture Operating Agreement are inconsistent with the
provisions of the Agreement or impose any additional requirements for the
execution and delivery of this Amendment, the Original Agreement or any
Ancillary Agreement or the consummation of the Transactions, the Existing
Venture Operating Agreement shall be deemed amended hereby in all respects
necessary to eliminate all such inconsistencies and additional requirements.
[Remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
ANTEC CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
NORTEL NETWORKS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
BROADBAND PARENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
BROADBAND TRANSITION CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
[SIGNATURES CONTINUED ON NEXT PAGE]
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NORTEL NETWORKS LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
ARRIS INTERACTIVE L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and
Chief Financial Officer
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EXHIBIT E
TERMS OF NEW MEMBERSHIP INTEREST (EXHIBIT H TO THE AGREEMENT)
ISSUER: Existing Venture.
INITIAL HOLDER: Nortel Networks LLC (together with any transferee,
the "Holder").
NATURE OF INTEREST: Limited liability company interest.
INITIAL CAPITAL New Membership Interest Balance.
ACCOUNT BALANCE:
DISTRIBUTION Subject to the subordination provisions, if (i)
PREFERENCE IN bankruptcy occurs and (ii) the Holder (or a
BANKRUPTCY; transferee) remains a member, no other member of the
PREFERRED Existing Venture shall be entitled to receive any
RETURN: distributions until the Holder has received (i) the
New Membership Interest Balance and (ii) a return on
the Holder's Invested Capital (to be defined) at the
rate of 10% per annum, compounded annually
("Preferred Return").
MANDATORY Subject to the following paragraph and the
REDEMPTION: subordination provisions, the New Membership Interest
shall be redeemed for cash (A) after the first six
months after the Closing, at the rate of $33 million
per fiscal quarter (the "Maximum Quarterly Nortel
Redemption"), and (B) in any event, in full at the
earlier of (i) the date occurring six months after
the final maturity of the Bank Facility (as defined
below), (ii) a "change of control" of Newco, (iii)
bankruptcy and (iv) acceleration of the Bank
Facility.
During the first six months after the Closing, the
Existing Venture shall not be obligated and shall not
be permitted to make any redemption payments to
Holder. After such six month period, for so long as
any Senior Debt is outstanding, (1) the quarterly
cash redemption obligation of the Existing Venture
under clause (A) of the preceding paragraph shall not
arise with respect to any particular fiscal quarter
unless (a) prior to the date on which such cash
redemption is made, the borrowers under the bank
facility (the "Bank Facility") (the "Borrowers") are
in compliance with all of their reporting
requirements under the Bank Facility with respect to
the immediately preceding fiscal quarter; (b) after
giving pro forma effect to the cash redemption, no
default or event of default shall have occurred and
be continuing under the Bank Facility, and (c) the
Existing Venture and the Company have certified under
the Bank Facility, in the manner required by the
terms of the Bank Facility, that the statement in
clause (b) above is correct and that, after giving
pro forma effect to such cash redemption, the
Borrowers have excess availability of at least $75
million available under the Bank Facility, and (2)
the Existing Venture's redemption obligations under
clause (B) of the preceding paragraph shall not
become payable.
The New Membership Interest shall be redeemed in full
at such time as the Holder has received cash
redemption payments equal, in the aggregate, to the
sum of (x) New Membership Interest Balance and (y)
the Preferred Return on the Invested Capital to the
time of such redemption.
For the avoidance of doubt, the foregoing limitations
on the Holder's ability to exercise its redemption
rights with respect to the New Membership Interest
shall not apply to any other payments to be made by
the Existing Venture, the Company or Newco (or any of
their Affiliates) to Nortel Networks or any of its
Affiliates (including Nortel Networks LLC), whether
pursuant to the Agreement or any of the Ancillary
Agreements, in connection with purchases of goods
and/or services or licenses of intellectual property
rights as of and after the Closing, or otherwise
(including payments with respect to the Inventory and
the German Inventory specified on Schedule 8.01(f) to
the Agreement).
Notwithstanding anything to the contrary contained in
the preceding two sentences, the Existing
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Venture will only be obligated to make, and will only
be permitted to make, the Closing Date Nortel
Redemption if the Borrowers shall have certified
under the Bank Facility, in the manner required by
the terms of the Bank Facility, that (i) after giving
pro forma effect to such Closing Date Nortel
Redemption, no default or event of default shall have
occurred under the Bank Facility, and (ii) after
giving pro forma effect to such Closing Date Nortel
Redemption, the Borrowers shall have excess
availability of at least $85 million under the Bank
Facility; provided that if the Existing Venture makes
the Closing Date Nortel Redemption, the Maximum
Quarterly Nortel Redemption shall be reduced by an
amount equal to (aa) the Nortel Redemption Amount
divided by (bb) 3.
COLLATERAL: None.
GUARANTOR: Issuer's Parent, on an unsecured, subordinated basis
(see Exhibit I-2 to the Agreement).
MANDATORY For so long as any Senior Debt is outstanding, (x) if
EXCHANGE FOR any of the Company, Newco or any of their Affiliates
NEW SECURITIES: (other than the Existing Venture) enter into an
agreement to sell all or any portion of their
membership interests in the Existing Venture, (y) if
the applicable agents for the holders of the Senior
Debt (the "Agents") forecloses on any of the
membership interests in the Existing Venture,
otherwise effects a sale in lieu of foreclosure or
otherwise exercises any rights or remedies of a
secured creditor with respect to such membership
interests or (z) during the continuance of an event
of default under the Senior Debt, upon notice from
the requisite lenders, the New Membership Interest
shall be exchanged for (i) Newco common stock with a
value equal to the unredeemed portion of the New
Membership Interest Balance plus the Preferred Return
accrued to the date of exchange, (ii) Newco preferred
stock with economic and other terms substantially
equivalent to those of the New Membership Interest
(which preferred stock shall, if the Holder so elects
prior to the exchange, be convertible into Newco
common stock), (iii) a subordinated note of Newco
with a maturity date six months after the final
maturity of the Bank Facility in an amount equal to
the unredeemed portion of the New Membership Interest
Balance plus the Preferred Return accrued to the date
of exchange (which subordinated note shall, if the
Holder so elects prior to the exchange, be
convertible into Newco common stock), or (iv) any
combination of the foregoing, in each case as
selected by the Holder (the securities or other
instruments receivable by the Holder in such
exchange, the "New Securities"); provided that the
Holder shall not be entitled to select the kind of
New Securities which would trigger the change of
control or put rights provisions of the Company's
convertible subordinated notes issued under the
Indenture (as modified in connection with the
Supplemental Indenture to be entered into pursuant to
Section 7.15 of the Agreement). Upon the exchange of
the New Membership Interest for the New Securities as
set forth above, the New Membership Interest would be
completely extinguished (including, without
limitation, any preference or other claim) and Holder
would have no rights or claims whatsoever with
respect to the Existing Venture under the New
Membership Interest.
NEGATIVE COVENANTS: None
AFFIRMATIVE The Existing Venture shall be obligated to the Holder
COVENANTS: to comply with all reporting requirements under the
terms of the Senior Debt, to make all requisite
certifications to the lenders, so as to enable the
exercise of the Holder's redemption rights. In
addition, delivery of monthly, quarterly and annual
financial statements; keep proper books and records;
notice of defaults (under both the terms of the New
Membership Interest and the Senior Debt); further
assurances.
SUBORDINATION: All obligations to Holder (under the New Membership
Interest, the Guarantee and the New Securities, if
any) will be subordinated to all obligations under
the Bank Facility and other Senior Debt (to be
defined to include any refinancing, replacement,
amendment, restatement or
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other modification of the Bank Facility) up to
$175,000,000 in aggregate principal amount
($200,000,000 if the Bank Facility is increased to
such amount as contemplated by the commitment letters
for the Contemplated Financing attached as Exhibit A
to the Agreement).
Full and complete subordination of obligations under
New Membership Interest, Guaranty and obligations of
Newco upon extinguishment of the New Membership
Interest, to be in form and substance satisfactory to
the Agents in their sole discretion. During the
continuance of a payment default under the Bank
Facility of which Holder has received notice, no
redemptions will be made until the Bank Facility is
paid in full in cash. Subject to restrictions
contained in the paragraph on Mandatory Redemptions,
as for any continuing non-payment default under the
Bank Facility and of which Holder has notice, there
shall be a 179 day blockage period on redemption,
such blockage to be exercisable no more than once in
any 365 day period. Subject to restrictions contained
in paragraph on Mandatory Redemptions, once the event
of default is cured or waived, the Existing Venture
shall pay to Holder all payments which were blocked.
TRANSFERABILITY: The New Membership Interest shall be freely
transferable by the Holder with no requirement of
consent of any other party, provided that any
transferee shall be required to agree to be bound by
all of the obligations of the transferor with respect
to the transferred interest (including the
subordination provisions).
OTHER PROVISIONS: Other customary and appropriate terms and provisions.
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EXHIBIT F
TERMS OF THE GUARANTY (EXHIBIT I-2 TO THE AGREEMENT)
GUARANTOR: Newco
GUARANTEE: Nortel Networks LLC (together with any transferee, the
"Holder")
COLLATERAL: None
GUARANTEED Full and prompt payment and performance (and not just of
OBLIGATIONS: collection) of all obligations of the Existing Venture arising
under, based on or in connection with the New Membership
Interest, including but not limited to Issuer's obligations to
make redemption payments to the Holder in accordance with the
terms thereof. The Guaranty shall be absolute, unconditional,
unlimited and continuing, subject only to the subordination in
favor of the Lenders.
COVENANTS: Guarantor will, and will cause the Existing Venture and the
Company to, comply with all of their respective reporting
requirements under the terms of the Senior Debt and make all
requisite certifications to the Lenders, so as to enable the
exercise of the Holder's New Membership Interest redemption
rights. Guarantor also shall not be permitted to make any
dividend payments (and this covenant shall remain in effect
notwithstanding any exchange of the New Membership Interest
pursuant to the "Mandatory Exchange for New Securities"
provisions set forth in Exhibit H to the Agreement and the
termination of the Guaranty in connection therewith).
SUBORDINATION: See "Subordination" section in Exhibit H to the
Agreement ("Terms of New Membership Interest").
TRANSFERABILITY The Guaranty shall be fully transferable by the Holder to
any transferee(s) of the New Membership Interest, without the
need for consent or any further action by Guarantor or any
other party, and upon any such transfer(s) shall continue to
be binding on Guarantor in full force and effect, provided
that any transferee shall be required to agree to be bound by
all of the obligations of the transferor with respect to the
New Membership Interest and the Guaranty (including the
subordination provisions).
OTHER TERMS: The Guaranty shall contain other provisions typical for an
unlimited and unconditional guaranty, including but not
limited to waivers of notice, diligence, defenses,
unenforceability of underlying obligation, etc.; no
subrogation until payment in full; no contest with the Holder,
and payment of the Holder's collection costs and interest.