Exhibit 4.5
AGREEMENT AND PLAN OF AMALGAMATION
BY AND AMONG
Alvarion Ltd.
Alvarion Mobile Inc.
AND
Interwave Communications International Ltd.
DATED AS OF JULY 27, 2004
TABLE OF CONTENTS
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ARTICLE I THE AMALGAMATION............................................................................................2
1.1 The Amalgamation Transaction........................................................................2
1.2 Closing Date........................................................................................2
1.3 Effect on Capital Stock.............................................................................2
1.4 Surrender of Certificates...........................................................................3
1.5 Interwave's Transfer Books Closed; No Further Ownership Rights in Interwave Shares..................4
1.6 Lost, Stolen, Destroyed or Unissued Certificates....................................................4
1.7 Taking of Necessary Action; Further Action..........................................................5
1.8 Tax Consequences....................................................................................5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF INTERWAVE................................................................5
2.1 Organization and Qualification; Subsidiaries........................................................5
2.2 Memorandum of Association; Bye-laws.................................................................6
2.3 Capitalization......................................................................................6
2.4 Authority Relative to this Agreement................................................................8
2.5 No Conflict; Required Filings and Consents..........................................................8
2.6 Compliance with Laws; Environmental Matters; Permits................................................9
2.7 SEC Filings; Financial Statements..................................................................10
2.8 No Undisclosed Liabilities.........................................................................11
2.9 Absence of Certain Changes or Events...............................................................11
2.10 Absence of Litigation..............................................................................12
2.11 Employee Matters and Benefit Plans.................................................................12
2.12 Receivables........................................................................................16
2.13 Restrictions on Business Activities................................................................16
2.14 Property...........................................................................................17
2.15 Taxes..............................................................................................17
2.16 Brokers............................................................................................19
2.17 Intellectual Property..............................................................................19
2.18 Contracts..........................................................................................24
2.19 Opinion of Financial Advisor.......................................................................25
2.20 Insurance..........................................................................................26
2.21 Board Approval.....................................................................................26
2.22 Inapplicability of Certain Statutes................................................................26
2.23 Foreign Corrupt Practices Act......................................................................26
2.24 Major Customers and Suppliers; Product Prices......................................................26
2.25 Product Warranty and Product Liability.............................................................27
2.26 Inventory..........................................................................................27
2.27 Full Disclosure....................................................................................27
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF ALVARION AND MERGER SUB................................................27
3.1 Organization and Qualification.....................................................................27
3.2 Charter Documents..................................................................................28
3.3 Authority Relative to this Agreement...............................................................28
3.4 No Conflict; Required Filings and Consents.........................................................28
3.5 SEC Filings; Financial Statements..................................................................29
3.6 Financing..........................................................................................30
3.7 Brokers............................................................................................30
3.8 Merger Sub Board Approval..........................................................................30
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME.......................................................................30
4.1 Conduct of Business by Interwave...................................................................30
ARTICLE V ADDITIONAL AGREEMENTS......................................................................................34
5.1 Regulatory Publications and Filings; Preparation of Certificate of Amalgamation....................34
5.2 Approval of Stockholders of Interwave..............................................................36
5.3 Merger Sub General Meeting.........................................................................37
5.4 Confidentiality; Access to Information.............................................................37
5.5 No Solicitation....................................................................................37
5.6 Public Disclosure..................................................................................39
5.7 Commercially Reasonable Efforts....................................................................39
5.8 Third Party Consents...............................................................................40
5.9 Share Options and Employee Benefits................................................................40
5.10 Interwave Warrants.................................................................................43
5.11 Notification.......................................................................................43
5.12 Indemnification....................................................................................44
5.13 Assignment of Agreements...........................................................................44
5.14 Alvarion Guaranty of Merger Sub Obligations........................................................45
5.15 Payment of Certain Accounts Payable and Closing Costs..............................................45
5.16 Bridge Loan........................................................................................45
5.17 Corporate Authority................................................................................45
ARTICLE VI CONDITIONS TO THE AMALGAMATION............................................................................45
6.1 Conditions to Obligations of Each Party to Effect the Amalgamation.................................45
6.2 Additional Conditions to the Obligations of Alvarion and Merger Sub................................46
6.3 Additional Conditions to the Obligations of Interwave..............................................47
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER........................................................................48
7.1 Termination........................................................................................48
7.2 Notice of Termination; Effect of Termination.......................................................50
7.3 Fees and Expenses..................................................................................51
7.4 Amendment..........................................................................................51
7.5 Extension; Waiver..................................................................................51
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ARTICLE VIII GENERAL PROVISIONS......................................................................................51
8.1 Non-Survival of Representations and Warranties.....................................................51
8.2 Notices............................................................................................51
8.3 Interpretation; Knowledge..........................................................................52
8.4 Counterparts.......................................................................................53
8.5 Entire Agreement; Third Party Beneficiaries........................................................53
8.6 Severability.......................................................................................54
8.7 Other Remedies; Specific Performance...............................................................54
8.8 Applicable Law.....................................................................................54
8.9 Rules of Construction..............................................................................54
8.10 Assignment.........................................................................................54
INDEX OF EXHIBITS
Exhibit A Form of Voting Agreement
Exhibit B Form of Employment and Non-Competition Agreement;
Schedule D Parties signing the Voting Agreement
Schedule 4.1(g) Option Guidelines
Schedule 5.9(e) Employees receiving Offers of Employment and Summary of Terms
Schedule 5.15 Accounts Payable Costs and Transaction Costs
Schedule 6.2(c) Officers entering Employment and Non-Competition Agreements
Schedule 6.2(d) Consents
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AGREEMENT AND PLAN OF AMALGAMATION
This AGREEMENT AND PLAN OF AMALGAMATION (the "Agreement") is made and
entered into as of July 27, 2004, by and between Alvarion Ltd. ("Alvarion"), an
Israeli company, Alvarion Mobile Inc. ("Merger Sub"), a Delaware corporation and
a wholly owned subsidiary of Alvarion, and Interwave Communications
International Ltd. ("Interwave") a Bermuda company.
RECITALS
A. Upon terms and subject to the conditions of this Agreement, Interwave
and Merger Sub will amalgamate and merge with each other in accordance with
Section 104B of the Bermuda Companies Act 1981 (the "Bermuda Act") and Section
252 of the Delaware General Corporation Law (the "Delaware Code") (the
"Amalgamation", and such amalgamated and merged entity, the "Amalgamated
Company"), such that the Amalgamated Company will be a Delaware corporation and
following which, pursuant to the Delaware Code, the separate corporate existence
of Interwave will cease and the Amalgamated Company will become a wholly owned
subsidiary of Alvarion, and each Interwave Share will be exchanged for cash in
the amount of US$5.75, all in accordance with this Agreement, the Bermuda Act
and the Delaware Code; and
B. The Board of Directors of Interwave has: (i) determined that this
Agreement, the Amalgamation and the other transactions contemplated by this
Agreement are fair to, and in the best interests of, Interwave and its
shareholders, and that, considering the financial position of the merging
companies, no reasonable concern exists that the Amalgamated Company will be
unable to fulfill the obligations of Interwave to its creditors; (ii) subject to
the approval of Interwave shareholders as provided in Section 2.4, approved this
Agreement, the Amalgamation and the other transactions contemplated by this
Agreement; and (iii) subject to Section 5.2(b), determined to recommend that the
shareholders of Interwave approve this Agreement, the Amalgamation and the other
transactions contemplated by this Agreement.
C The Board of Directors of each of Alvarion and Merger Sub has approved
this Agreement, the Amalgamation and the other transactions contemplated by this
Agreement and the Board of Directors of Merger Sub has determined that,
considering the financial position of the merging companies, no reasonable
concern exists that the Amalgamated Company will be unable to fulfill the
obligations of Merger Sub to its creditors.
D Concurrently with the execution of this Agreement and as a condition
and inducement to Alvarion's willingness to enter into this Agreement: (i) all
directors and officers and the principal shareholders of Interwave identified on
Schedule D hereto are entering into voting agreements in substantially the form
attached hereto as Exhibit A (the "Voting Agreements"); (ii) certain individuals
are entering into employment and non-competition agreements in substantially the
form attached hereto as Exhibit B, which shall become effective as of the
Closing Date (as defined herein) (the "Employment and Non-Competition
Agreements"); and (iii) all directors of Interwave and each of its subsidiaries
(excluding only those directors of the foreign subsidiaries mutually and
reasonably agreed upon by the parties) are executing resignation letters in form
reasonably satisfactory to the parties which shall become effective as of the
Closing Date (the "Director Resignations")
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties agree as follows:
ARTICLE I
THE AMALGAMATION
1.1 The Amalgamation Transaction. At the Effective Time (as defined in
Section 1.2) and subject to and upon the terms and conditions of this Agreement
and the applicable provisions of the Bermuda Act and the Delaware Code, (a)
Interwave and Merger Sub will amalgamate and merge with each other in accordance
with Section 104B of the Bermuda Act and the Delaware Code, such that the
Amalgamated Company will be a Delaware corporation and following which, pursuant
to the Delaware Code, the separate corporate existence of Interwave will cease
and the Amalgamated Company shall become a wholly owned subsidiary of Alvarion
and shall succeed to, and assume all of the rights, properties and obligations
of, Interwave; and (b) all Interwave Shares will be exchanged for the right to
receive the Per Share Consideration in accordance with Section 1.3(b) hereof,
all in accordance with the provisions of the Bermuda Act and this Agreement.
1.2 Closing Date. Subject to the terms and conditions of this Agreement,
the closing of the Amalgamation and the other transactions contemplated by this
Agreement (the "Closing") shall take place at a time and on a date to be
designated by the parties (the date upon and time at which the Closing actually
occurs being referred to herein as the "Closing Date" and the "Effective Time",
respectively), which date shall be no later than the second business day (or
such other period of time mutually agreed to by the parties) following the
satisfaction or waiver of the conditions set forth in Article VI hereof (other
than those conditions which by their terms are to be satisfied or waived as of
the Closing).
1.3 Effect on Capital Stock. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Amalgamation, the following
shall occur:
(a) Amalgamation of Interwave and Merger Sub. Interwave and Merger
Sub will amalgamate and merge with each other in accordance with Section 104B
of the Bermuda Act and the Delaware Code, and the separate corporate existence
of Interwave shall cease and Merger Sub shall continue as the Amalgamated
Company.
(b) Exchange of Interwave Shares. Each Common Share, par value
US$0.01 per share, in the capital of Interwave (the "Interwave Shares") issued
and outstanding immediately prior to the Effective Time, other than any
Interwave Shares owned by any direct or indirect wholly-owned subsidiary of
Interwave, shall automatically be converted into and represent solely the right
to receive an amount equal to US$ 5.75 (the "Per Share Consideration"), subject
to the provisions
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of Section 1.3(e), payable to each person who was a registered holder
of such Interwave Share immediately prior to the Effective Time upon surrender
of the certificate representing such Interwave Share in the manner provided in
Section 1.4 (or in the case of a lost, stolen, destroyed or unissued
certificate, upon delivery of an affidavit (and bond, if required) in the manner
provided in Section 1.6).
(c) Subsidiary-Owned Stock. Notwithstanding the provisions of Section
1.3(b), at the Effective Time, each Interwave Share that is owned by any direct
or indirect wholly-owned subsidiary of Interwave immediately prior to the
Effective Time shall remain outstanding, shall not be exchanged under Section
1.3(b) and no Per Share Consideration shall be delivered with respect thereto.
(d) Stock Options; Warrants; Employee Stock Purchase Plan. At the
Effective Time, all Interwave Share Options then outstanding (as defined in
Section 5.9) shall be treated in accordance with Section 5.9(a). At the
Effective Time, all Interwave Warrants (as defined in Section 2.3(a)) then
outstanding shall be assumed by Alvarion in accordance with Section 5.10.
Purchase rights outstanding under Interwave's 1999 Employee Share Purchase Plan
(the "ESPP") shall be treated in accordance with Section 5.9.
(e) Adjustments to Per Share Consideration. Without derogating from
any other provision of this Agreement, the Per Share Consideration shall be
adjusted to reflect appropriately the effect of any share consolidation or
subdivision, forward or reverse stock split, bonus issue, stock dividend
(including any dividend or distribution of securities convertible into
Interwave Shares), extraordinary cash dividends, reorganization,
recapitalization, reclassification, combination, exchange of shares or other
like change with respect to Interwave Shares occurring on or after the date
hereof and prior to the Effective Time.
1.4 Surrender of Certificates.
(a) Paying Agent. A bank or trust company reasonably acceptable to
Interwave shall act as the paying agent (the "Paying Agent") in respect of the
Amalgamation, to receive the Per Share Consideration to which holders of the
Interwave Shares shall become entitled pursuant to Section 1.3 (collectively the
"Merger Consideration").
(b) Alvarion to Provide Per Share Consideration. At the Effective
Time, Alvarion shall deposit with the Paying Agent the Merger Consideration
payable pursuant to Section 1.3 in payment for the Interwave Shares outstanding
immediately prior to the Effective Time. Such funds shall be held in trust by
the Paying Agent for the benefit of the applicable holders of such previously
outstanding Interwave Shares.
(c) Payment Procedures. As soon as reasonably practicable after the
Effective Time, Alvarion shall cause the Paying Agent to mail to each holder of
record (immediately prior to the Effective Time) of outstanding Interwave Shares
(other than those holders who had previously properly delivered their
certificates or certificates which immediately prior to the Effective Time
represented outstanding Interwave Shares (each, a "Certificate" and
collectively, the Certificates") to the Paying Agent): (i) a letter of
transmittal in customary form (which shall specify that delivery
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shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent), and (ii)
instructions for use in effecting the surrender of the Certificates for the Per
Share Consideration. Upon surrender of Certificates for cancellation to the
Paying Agent, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, the holders of
such Certificates shall be entitled to receive in payment therefor the Per Share
Consideration multiplied, in each case, by all Interwave Shares formerly
represented by such Certificates, and the Certificates so surrendered shall
forthwith be canceled. No interest shall accrue or be paid on the amounts
payable pursuant to Section 1.3 upon the surrender of any Certificate for the
benefit of the holder of such Certificate. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time for all corporate
purposes to evidence only the ownership of the right to receive the Per Share
Consideration into which such Interwave Shares shall have been converted.
(d) Withholding. Each of the Paying Agent, Alvarion and the
Amalgamated Company shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Interwave Shares, such amounts as may be required to
be deducted or withheld therefrom under the Code (as defined in Section
2.11(a)), or under any provision of state, local or foreign law or any other
applicable requirement. To the extent such amounts are so deducted or withheld,
such amounts shall be treated for all purposes under this Agreement as having
been paid to the person to whom such amounts would otherwise have been paid.
(e) No Liability. Notwithstanding anything to the contrary in this
Section 1.4, neither the Paying Agent nor any party hereto shall be liable to a
holder or former holder of Interwave Shares for any amount properly paid to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
1.5 Interwave's Transfer Books Closed; No Further Ownership Rights in
Interwave Shares. At the Effective Time: (i) the share register and transfer
books of Interwave shall be deemed closed, and no transfer of any Interwave
Shares or any Certificates in respect thereof shall thereafter be made or
consummated; and (ii) all holders of Interwave Shares that were outstanding
immediately prior to the Effective Time shall cease to have any rights as
shareholders of Interwave, other than the right to receive the Per Share
Consideration into which such Interwave Shares shall have been converted. If,
after the Effective Time, a valid Certificate is presented to the Paying Agent
or to the Amalgamated Company or Alvarion, such Certificate shall be canceled
and shall be paid for as provided in this Article I. The Per Share Consideration
paid in accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to such Interwave Shares.
1.6 Lost, Stolen, Destroyed or Unissued Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, or were never issued,
the Paying Agent shall pay such amounts as specified in Section 1.3, in exchange
for such lost, stolen, destroyed, or unissued Certificates, upon the making of
an affidavit of that fact by the former registered holder of the applicable
Interwave Shares; provided, however, that Alvarion and the Paying Agent may, in
their sole discretion and as a condition precedent to such payment or issuance,
require such former registered holder to deliver a bond in such sum as it may
direct as indemnity against any claim that may be
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made against Alvarion, the Amalgamated Company or the Paying Agent with respect
to the Certificates alleged to have been lost, stolen, destroyed or unissued.
1.7 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Amalgamated Company with full right,
title and possession to all assets, property, rights, privileges, powers and
franchises of Interwave and Merger Sub, the officers and directors of Interwave
and Merger Sub will take all such lawful and necessary action.
1.8 Tax Consequences. The Amalgamation is structured as a taxable
transaction under the Code and, notwithstanding Section 1.4(d) above, each
exchanging holder of Interwave shares shall be exclusively responsible for the
payment of its own tax liability under United States federal, state and local
tax laws and foreign tax laws and neither Alvarion nor Interwave or Merger Sub
has made any representation to the contrary.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF INTERWAVE
Interwave hereby represents and warrants to Alvarion and Merger Sub, as of
the date hereof, subject to such exceptions as are disclosed in writing in the
disclosure schedule supplied by Interwave to Alvarion, dated as of the date
hereof and certified by a duly authorized officer of Interwave (the "Interwave
Disclosure Schedule"), as follows (reference to Interwave in this Article II
shall be deemed to include reference to each of its Subsidiaries (as such term
is defined in Section 2.1(b) below) unless the context otherwise requires).
2.1 Organization and Qualification; Subsidiaries.
(a) Each of Interwave and its Subsidiaries is a corporation duly
organized and validly existing and, where applicable, in good standing, under
the laws of the jurisdiction of its incorporation and has the requisite
corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted. Each of
Interwave and its Subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and, where applicable is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Interwave.
(b) Section 2.1(b) of the Interwave Disclosure Schedule lists each of
Interwave's subsidiaries of the date hereof (the "Subsidiaries"), the
jurisdiction of incorporation of each Subsidiary, and Interwave's equity
interest therein. Except as set forth in Section 2.1(b) of the Interwave
Disclosure Schedule, neither Interwave nor any of its Subsidiaries has agreed,
is obligated to make, or is bound by any written or oral agreement, contract,
subcontract, lease, binding understanding, instrument, note, bond, mortgage,
indenture, option, warranty, license, sublicense,
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benefit plan, obligation, commitment or binding undertaking of any nature (a
"Contract") under which it may become obligated to make any future investment
in, or capital contribution to, any other entity. Except as set forth in Section
2.1(b) of the Interwave Disclosure Schedule, neither Interwave nor any of its
Subsidiaries directly or indirectly owns any equity or similar interest in or
any interest convertible, exchangeable or exercisable for, any equity or similar
interest in, any person.
2.2 Memorandum of Association; Bye-laws. Interwave has previously furnished
to Alvarion a complete and correct copy of its Memorandum of Association and
Bye-laws as amended to the date of this Agreement (together, the "Interwave
Charter Documents"). Such Interwave Charter Documents and equivalent
organizational documents of each of Interwave's Subsidiaries are in full force
and effect. Interwave is not in violation of any of the provisions of the
Interwave Charter Documents, and no Subsidiary of Interwave is in violation of
its equivalent organizational documents.
2.3 Capitalization.
(a) The authorized share capital of Interwave consists of 20,000,000
Common Shares, US$ 0.01 par value per share and 10,000,000 Preferred Shares,
US$0.001 par value per share. Interwave has no class of share capital authorized
other than the Interwave Shares. As of the close of business on July 23, 2004,
(i) no Preferred Shares were issued and outstanding and 9,165,105 Interwave
Shares were issued and outstanding, all of which Interwave Shares were validly
issued, fully paid and nonassessable; (ii) except as set forth in Section 2.3
of the Interwave Disclosure Schedule, no Interwave Shares were held by
subsidiaries of Interwave; (iii) 147,981 Interwave Shares were reserved for
future issuance pursuant to Interwave's ESPP; (iv) 1,947,024 Interwave Shares
were reserved for issuance under Interwave Option Plans (as defined in Section
2.3(c), of which 1,547,360 were subject to outstanding options to purchase
Interwave Shares and 399,664 were available for future options grants; and (v)
284,908 Interwave Shares were reserved for issuance upon the exercise of
warrants to purchase Interwave Shares as set forth in Section 2.3 of the
Interwave Disclosure Schedule (the "Interwave Warrants").
(b) Other than as described in the preceding sentence and except as
set forth in Section 2.3 of the Interwave Disclosure Schedule, as of the close
of business on July 23, 2004, there were no other shares, convertible
securities, outstanding warrants, options or other rights to subscribe for,
purchase or acquire from Interwave any share capital of Interwave and there were
not any Contracts providing for the issuance of, or the granting of rights to
acquire, any share capital of Interwave or under which Interwave is, or may
become, obligated to issue any of its securities. Except as set forth in Section
2.3 of the Interwave Disclosure Schedule, there are no commitments, agreements
or understandings of any character to which Interwave is bound obligating
Interwave to accelerate the vesting of any Interwave Share Option (as defined in
Section 5.11) as a result of the Amalgamation.
(c) Section 2.3 of the Interwave Disclosure Schedule sets forth the
following information with respect to each Interwave Share Option outstanding as
of the close of business on July 23, 2004: (i) the name and address of the
optionee; (ii) the particular plan, if applicable, pursuant to which such
Interwave Share Option was granted, (iii) the number of Interwave Shares
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subject to such Interwave Share Option; (iv) the exercise price of such
Interwave Share Option; (v) the date on which such Interwave Share Option was
granted; (vi) the applicable vesting schedule, including the vesting
commencement date; (vii) the date on which such Interwave Share Option expires;
(viii) whether the vesting or exercisability of such Interwave Share Option will
be accelerated in any way by the transactions contemplated by this Agreement
(whether alone or upon the occurrence of any additional or subsequent events),
and the extent of any such acceleration; and (ix) whether, as of the close of
business on July 23, 2004, the optionee was employed by Interwave and, if not so
employed, the date of termination and expiration of such Interwave Share Option.
Interwave has made available to Alvarion accurate and complete copies of
Interwave's 1994 Stock Plan, 1999 Option Plan and 2001 Supplemental Stock Option
Plan (collectively, the "Interwave Option Plans") pursuant to which Interwave
has granted such Interwave Share Options that are currently outstanding and the
form of all share option agreements evidencing such Interwave Share Options. All
Interwave Shares subject to issuance as aforesaid have been duly authorized and,
upon issuance on the terms and conditions specified in the instrument pursuant
to which they are issuable, will be validly issued, fully paid and
nonassessable. No outstanding Interwave Shares are unvested or subject to any
repurchase option in favor of Interwave. All outstanding Interwave Shares, all
outstanding Interwave Share Options, and all outstanding shares of capital stock
of each subsidiary of Interwave have been issued and granted (i) in compliance
in all material respects with all applicable securities laws and other
applicable Legal Requirements (as defined below) and (ii) in material compliance
with all applicable requirements set forth in Contracts. For the purposes of
this Agreement, "Legal Requirements" means any U.S. federal or state law, or
material local or municipal law, or Bermuda or other foreign law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity (as defined in Section 2.5(b)).
(d) Except for (i) securities that Interwave owns, directly or
indirectly through one or more Subsidiaries, free and clear of all liens,
pledges, hypothecations, charges, mortgages, security interests, encumbrances,
claims, infringements, interferences, options, rights of first refusal,
preemptive rights or restrictions of any nature (including any restriction on
the voting of any security, any restriction on the transfer of any security or
other asset other than pursuant to applicable securities laws and regulations,
any restriction on the possession, exercise or transfer of any other attribute
of ownership of any asset), ("Liens"), other than Liens for Taxes not yet due
and payable, and (ii) shares of capital stock or other similar ownership
interests of Subsidiaries that are owned by certain nominee equity holders as
required by the applicable law of the jurisdiction of organization of such
Subsidiaries (which shares or other interests do not materially affect
Interwave's control of such Subsidiaries), as of the date of this Agreement,
there are no equity securities, partnership interests or similar ownership
interests of any class of equity security of any Subsidiary of Interwave, or
any security exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests, issued,
reserved for issuance or outstanding. Except as set forth in this Section 2.3 or
Section 2.3 of the Interwave Disclosure Schedule, there are no subscriptions,
options, warrants, equity securities, partnership interests or similar ownership
interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which Interwave or any of its Subsidiaries is a
party or by which it is bound, obligating Interwave or any of the Subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold, or
repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or
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acquisition of, any shares of capital stock, partnership interests or similar
ownership interests of Interwave or any of its subsidiaries or obligating
Interwave or any of its subsidiaries to grant, extend, accelerate the vesting of
or enter into any such subscription, option, warrant, equity security, call,
right, commitment or agreement. Except as contemplated by this Agreement or as
set forth in Section 2.3 of the Interwave Disclosure Schedule, there are no
registration rights and there is, except for the Voting Agreements, no voting
trust, proxy, rights plan, anti takeover plan or other similar agreement or
understanding to which Interwave or any of its subsidiaries is a party or by
which they are bound with respect to any equity security of any class of
Interwave or with respect to any equity security, partnership interest or
similar ownership interest of any class of any of its Subsidiaries. Shareholders
of Interwave have the right to apply to the Supreme Court of Bermuda for
appraisal of the fair value of their Shares under ss. 106(6) - (6D) of the
Bermuda Act.
(e) Interwave's shares are not listed for trading on any foreign or
domestic stock exchange other than Nasdaq, nor has Interwave applied to list its
shares on any such stock exchange.
2.4 Authority Relative to this Agreement. Interwave has the requisite
corporate power and authority to execute and deliver this Agreement and, subject
to obtaining the approval of the Agreement, the Amalgamation and the
transactions contemplated by this Agreement by the vote of a majority of the
outstanding Interwave Shares and by three-fourths of the votes cast at the
general meeting called to consider the Amalgamation and the Agreement (the
"Interwave General Meeting"), to consummate the transactions contemplated
hereby, and no other corporate proceedings on the part of Interwave are
necessary to authorize this Agreement or for Interwave to perform its
obligations hereunder. This Agreement has been duly and validly executed and
delivered by Interwave and, assuming the due authorization, execution and
delivery by Alvarion and Merger Sub, constitutes a legal and binding obligation
of Interwave, enforceable against Interwave in accordance with its terms, except
as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting creditors' rights generally and laws relating to the availability of
specific performance, injunctive relief or other equitable remedies. Except as
set forth above, no vote or approval of: (i) any single creditor of Interwave;
(ii) any holder of any option or warrant granted by Interwave; or (iii) any
shareholder of any of Interwave's subsidiaries is necessary in order to approve
this Agreement, or to approve or permit the consummation of the Amalgamation and
the other transactions contemplated by this Agreement.
2.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Interwave do not,
and the performance of this Agreement by Interwave will not: (i) conflict with
or violate the Interwave Charter Documents or the equivalent organizational
documents of any of Interwave's Subsidiaries; (ii) trigger any rights or similar
"poison pill" plans; (iii) subject to compliance with the requirements set forth
in Section 2.5, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Interwave or any of its subsidiaries or by
which its or any of their respective properties is bound or affected; or (iv)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or materially impair
Interwave's or any of its Subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation
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of a Lien on any of the properties or assets of Interwave or any of its
subsidiaries pursuant to, any material Contract to which Interwave or any of its
subsidiaries is a party or by which Interwave or any of its subsidiaries or its
or any of their respective properties are bound or affected, except to the
extent such conflict, violation, breach, default, impairment or other effect
would not in the case of clauses (iii) or (iv), individually or in the
aggregate: (A) as of the date hereof reasonably be expected to have a Material
Adverse Effect on Interwave or materially delay consummation of the Amalgamation
or otherwise prevent the parties hereto from performing their obligations under
this Agreement.
(b) Other than with respect to procedures under the Bermuda Act and
the Delaware Code, the execution and delivery of this Agreement by Interwave
does not, and the performance of this Agreement by Interwave will not require
any consent, approval, authorization or permit of, or filing with or
notification to, any court, administrative agency, commission, governmental or
regulatory authority, domestic or foreign, including the Bermuda Monetary
Authority (each, a "Governmental Entity") with respect to Interwave, except:
(i) for: (A) compliance with applicable requirements of the Securities Act of
1933, as amended (the "Securities Act") and the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); (B) compliance with the pre-merger notification
requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and of foreign governmental entities; and (C) compliance
with the rules and regulations of Nasdaq; and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications: (A) would not as of the date hereof, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Interwave
or, after the Effective Time, Alvarion or Merger Sub, or (B) would not prevent
or materially delay consummation of the transaction or otherwise prevent the
parties hereto from performing their obligations under this Agreement.
2.6 Compliance with Laws; Environmental Matters; Permits.
(a) Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "Hazardous Material" is any material or substance that is
prohibited or regulated by any applicable Environmental Law or that has been
designated by any Governmental Entity to be radioactive, toxic, hazardous or
otherwise a danger to health, reproduction or the environment, but excluding
office and janitorial supplies properly maintained.
(ii) "Environmental Laws" are all applicable laws, rules,
regulations, orders, treaties, statutes, and codes promulgated by any
Governmental Entity which prohibit, regulate or control any Hazardous Material,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Resource Recovery and Conservation
Act of 1976, the Federal Water Pollution Control Act, the Clean Air Act, the
Hazardous Materials Transportation Act, the Clean Water Act, and other
comparable laws, rules, regulations, ordinances, orders, treaties, statutes,
and codes of other Governmental Entities, the regulations promulgated pursuant
to any of the foregoing, and all amendments and modifications of any of the
foregoing, all as amended to date.
-9-
(b) Compliance with Laws. Neither Interwave nor any of its
Subsidiaries is, in any material respect, in conflict with, or in default or
violation of, any law (including Environmental Laws and the Foreign Corrupt
Practices Act of 1977, as amended), rule, regulation, order, judgment or decree
applicable to Interwave or any of its subsidiaries or by which its or any of
their respective properties is bound or affected, except for any conflicts,
defaults or violations that (individually or in the aggregate) would not
reasonably be expected to have a Material Adverse Effect on Interwave. To the
knowledge of Interwave, no investigation or review by any Governmental Entity is
pending or, to the knowledge of Interwave, threatened against Interwave or its
Subsidiaries, nor has any Governmental Entity indicated to Interwave an
intention to conduct the same, other than, in each such case, those the outcome
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Interwave.
(c) Environmental Matters. Interwave has not disposed of, released,
discharged or emitted any Hazardous Materials into the soil or groundwater at
any properties owned or leased at any time by Interwave, or at any other
property, or exposed any employee or other individual to any Hazardous Materials
or any workplace or environmental condition in violation of Environmental Laws
and in such a manner as would result in any material liability or clean-up
obligation to Interwave except for such liability or clean-up obligation as
would not have a Material Adverse Effect on Interwave. To the knowledge of
Interwave, (i) no Hazardous Materials are present in, on, or under any
properties owned, leased or used at any time by Interwave, and (ii) no
reasonable likelihood exists that any Hazardous Materials will come to be
present in, on, or under any properties owned, leased or used at any time by
Interwave, in each case so as to give rise to any liability or clean-up
obligation under any Environmental Laws except for such liability or clean-up
obligation as would not be reasonably expected to have a Material Adverse Effect
on Interwave.
(d) Approvals. Interwave and its Subsidiaries hold all franchises,
grants, permits, licenses, variances, easements, consents, certificates,
exemptions, orders and approvals and other authorizations from Governmental
Entities ("Approvals") which are (i) material to the operation of the business
of Interwave and its Subsidiaries, and (ii) necessary to own, lease and operate
the properties Interwave and its Subsidiaries purport to own, operate or lease
except in the case of clause (ii) where the failure to have such Approvals would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Interwave. Interwave and its Subsidiaries have been and are in
compliance with the terms of such Approvals and any conditions placed thereon
except to the extent that the failure to be in compliance could not reasonably
be expected to have a Material Adverse Effect on Interwave.
2.7 SEC Filings; Financial Statements.
(a) Interwave has made and will make available to Alvarion a correct
and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by Interwave with the Securities and Exchange
Commission ("SEC") since June 30, 2001 (the "Interwave SEC Reports"), which are
all the forms, reports and documents required to be filed by Interwave with the
SEC since such time. Except as set forth in Section 2.7 of the Interwave
Disclosure Schedule the Interwave SEC Reports: (i) were and will be prepared in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the SEC promulgated
thereunder; and (ii) did not and will not at the time of filing
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thereof (and if any Interwave SEC Report filed prior to the date of this
Agreement was amended or superseded by a filing prior to the date of this
Agreement then also on the date of filing of such amendment or superseded
filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. None of Interwave's Subsidiaries is required to file any reports
or other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in Interwave SEC Reports (including
any Interwave SEC Report filed after the date of this Agreement), as the same
may be amended or supplemented: (i) complied and will comply as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto in effect at the time of such filing; and (ii) was and will be
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited statements, may not contain footnotes as permitted by Form 10-Q of the
Exchange Act) and each fairly presents in all material respects the consolidated
financial position of Interwave and its consolidated Subsidiaries at the
respective dates thereof and the consolidated results of its operations and cash
flows for the periods indicated (subject, in the case of unaudited statements,
to normal year-end adjustments which were not or are not expected to be material
in amount).
(c) Interwave's revenues for the quarter ended June 30, 2004, as
reflected in its audited financial statements for the fiscal year ended
June 30, 2004, which audited financial statements shall be provided to Alvarion
prior to the Closing Date (the "June Financial Statements"), shall not be less
than $11.0 million, and its operating expenses from research and development,
sales (excluding commissions), marketing, general and administration (excluding
bad debt expense, and acquisition associated costs (e.g., legal, financial
advisory, accounting, auditing and other merger and acquisition associated
costs) associated with the amalgamation and the transactions contemplated hereby
("Expenses") for such quarter, as reflected in the June Financial Statements,
shall not exceed the prior quarter's Expenses by more than 10% of such prior
quarter's Expenses.
2.8 No Undisclosed Liabilities. Neither Interwave nor any of its
Subsidiaries has any liabilities (absolute, accrued, contingent or otherwise) of
a nature required to be disclosed in an Interwave SEC Report or on a
consolidated balance sheet or in the related notes to consolidated financial
statements prepared in accordance with GAAP and the Exchange Act and the rules
and regulations of the SEC promulgated thereunder which are, individually or in
the aggregate, material to the business, results of operations, assets or
financial condition of Interwave and its subsidiaries taken as a whole, except:
(i) liabilities provided for in Interwave's balance sheet as of March 31, 2004
set forth in Interwave SEC Reports (or in the notes thereto) as of the date
thereof; (ii) liabilities incurred since March 31, 2004 in the ordinary course
of business that would not reasonably be expected to have a Material Adverse
Effect on Interwave and that Interwave would have been permitted to incur under
this Agreement in accordance with Section 4.1 had that section applied to the
period prior to the date hereof; and (iii) banking, accounting, legal and
printing fees and expenses associated with the Amalgamation.
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2.9 Absence of Certain Changes or Events. Since March 31, 2004 to the date
hereof, there has not been: (i) any Material Adverse Effect on Interwave; (ii)
any declaration, setting aside or payment of any dividend on or bonus issue of,
or other distribution (whether in cash, stock or property) in respect of, any of
Interwave's or any of its Subsidiaries' capital stock, or any purchase,
redemption or other acquisition by Interwave of any of Interwave's capital stock
or any other securities of Interwave or its Subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities; (iii)
any consolidation, subdivision, split, combination or reclassification of any of
Interwave's or any of its subsidiaries' capital stock; (iv) any granting by
Interwave or any of its subsidiaries of any increase in compensation or
benefits, except for normal increases of cash compensation in the ordinary
course of business consistent with past practice, or any payment by Interwave or
any of its Subsidiaries of any bonus, except for bonuses made in the ordinary
course of business consistent with past practice, or any granting by Interwave
or any of its Subsidiaries of any increase in severance or termination pay or
any entry by Interwave or any of its subsidiaries into any currently effective
employment, severance, termination or indemnification agreement or any agreement
the benefits of which are contingent or the terms of which are materially
altered upon the occurrence of a transaction involving Interwave of the nature
contemplated hereby; (v) entry by Interwave or any of its Subsidiaries into any
licensing or other agreement with regard to the acquisition or disposition of
any Intellectual Property (as defined in Section 2.17) other than licenses in
the ordinary course of business with terms and conditions consistent with past
practice; or (vi) entry by Interwave or any of its subsidiaries into any
material amendment or consent with respect to any licensing agreement which has
been filed or is required to be filed by Interwave with the SEC; (vii) any
material change by Interwave in its accounting methods, principles or practices,
except as required by concurrent changes in GAAP; (viii) any revaluation by
Interwave of any of its assets, including, without limitation, writing down the
value of capitalized inventory or writing off notes or accounts receivable other
than in the ordinary course of business; (ix) any sale of assets of Interwave
other than in the ordinary course of business consistent with past practice; or
(x) any Tax election or accounting method change inconsistent with past
practice, agreement to pay, settlement or compromise of any material Tax
liability or extension or waiver of any limitation period with respect to Taxes,
or request or negotiation for or receipt of any Tax rulings.
2.10 Absence of Litigation. Except as specifically disclosed in the
Interwave SEC Reports or in Section 2.10 of the Interwave Disclosure Schedule,
there are no claims, actions, suits or proceedings pending or, to the knowledge
of Interwave, threatened (or, to the knowledge of Interwave, any governmental or
regulatory investigation pending or threatened) against Interwave or any of its
subsidiaries or any properties or rights of Interwave or any of its
subsidiaries, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign except for such claims,
actions, suits or proceedings arising in the ordinary course of business that
would not reasonably be expected to have a Material Adverse Effect on Interwave.
2.11 Employee Matters and Benefit Plans.
(a) Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
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(i) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended and as codified in Section 4980B of the
Code and Sections 601 through 608 of ERISA;
(ii) "Code" shall mean the Internal Revenue Code of 1986, as
amended;
(iii) "DOL" shall mean the Department of Labor;
(iv) "Employee" shall mean any current or former or retired
employee, consultant or director of Interwave or any ERISA Affiliate;
(v) "Employment Agreement" shall mean each management, employment,
severance, consulting, relocation, repatriation, expatriation, visa, work permit
or other Contract between Interwave or any ERISA Affiliate and any Employee;
(vi) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended;
(vii) "ERISA Affiliate" shall mean any Subsidiary of Interwave or
other person or entity under common control with Interwave or any subsidiary of
Interwave within the meaning of Section 414(b), (c), (m) or (o) of the Code and
the regulations issued thereunder;
(viii) "Interwave Employee Plan" shall mean any plan, program,
policy, practice, contract, agreement or other arrangement, other than an
Employment Agreement, providing for compensation, severance, termination pay,
deferred compensation, performance awards, stock or stock-related awards, fringe
benefits or other employee benefits or remuneration of any kind, whether written
or unwritten, funded or unfunded, including without limitation, each "employee
benefit plan," within the meaning of Section 3(3) of ERISA which is or has been
maintained, contributed to, or required to be contributed to, by Interwave or
any ERISA Affiliate for the benefit of any Employee, or with respect to which
Interwave or any ERISA Affiliate has or may have any liability or obligation,
including each International Employee Plan;
(ix) "FMLA" shall mean the Family Medical Leave Act of 1993, as
amended;
(x) "International Employee Plan" shall mean each Interwave
Employee Plan and each government-mandated plan or program that has been adopted
or maintained by Interwave or any ERISA Affiliate, whether informally or
formally, or with respect to which Interwave or any ERISA Affiliate will or may
have any liability, for the benefit of Employees who perform services outside
the United States;
(xi) "IRS" shall mean the Internal Revenue Service of the United
States;
(xii) "Multiemployer Plan" shall mean any "Pension Plan" (as
defined below) which is a "multiemployer plan," as defined in Section 3(37) of
ERISA;
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(xiii) "Pension Plan" shall mean each Interwave Employee Plan
which is an "employee pension benefit plan," within the meaning of Section 3(2)
of ERISA.
(b) Schedule. Section 2.11(b) of the Interwave Disclosure Schedule
contains an accurate and complete list, as of the date hereof, of each Interwave
Employee Plan other than legally-mandated plans, programs and arrangements, and
each Employment Agreement. Interwave does not have any plan or commitment to
establish any new Interwave Employee Plan or Employment Agreement, to modify any
Interwave Employee Plan or Employment Agreement (except to the extent required
by law or to conform any such Interwave Employee Plan or Employment Agreement to
the requirements of any applicable law, in each case as previously disclosed to
Alvarion in writing or as required by this Agreement), or to adopt or enter into
any Interwave Employee Plan or Employment Agreement. Except as set forth on
Section 2.11(b) of the Interwave Disclosure Schedule, neither Interwave nor any
ERISA Affiliate is obligated to provide an Employee with any compensation or
benefits pursuant to an agreement (for example, an acquisition agreement) with a
former employer of such Employee.
(c) Documents. Interwave has provided or made available to Alvarion
correct and complete copies of: (i) all documents embodying each Interwave
Employee Plan, other than legally-mandated plans, programs and arrangements and
each Employment Agreement including (without limitation) all amendments thereto
and all related trust documents, administrative service agreements, group
annuity contracts, group insurance contracts, and policies pertaining to
fiduciary liability insurance covering the fiduciaries for each Plan; (ii) the
most recent annual actuarial valuations, if any, prepared for each Interwave
Employee Plan or any International Employee Plan; (iii) the three (3) most
recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Interwave Employee Plan; (iv) if Interwave Employee Plan
is funded, the most recent annual and periodic accounting of Interwave Employee
Plan assets; (v) the most recent summary plan description together with the
summary(ies) of material modifications thereto, if any, required under ERISA
with respect to each Interwave Employee Plan; (vi) all IRS determination,
opinion, notification and advisory letters, and all applications and
correspondence to or from the IRS or the DOL with respect to any such
application or letter; (vii) all written communications material to any Employee
or Employees relating to any Interwave Employee Plan and any proposed Interwave
Employee Plans, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments or
vesting schedules or other events which would result in any material liability
to Interwave; (viii) all correspondence to or from any Governmental Entity
relating to any Interwave Employee Plan; (ix) all COBRA forms and related
notices (or such forms and notices as required under comparable law); (x) the
three (3) most recent plan years' discrimination tests for each INTERWAVE
Employee Plan; (xi) all registration statements, annual reports (Form 11-K and
all attachments thereto) and prospectuses prepared in connection with each
Interwave Employee Plan; and (xii) any licenses or permits held by Interwave or
any of its Subsidiaries which enable it to employ foreign employees.
(d) Employee Plan Compliance. Except as set forth on Section 2.11(d)
of the Interwave Disclosure Schedule, (i) Interwave has performed in all
material respects all obligations required to be performed by it under, is not
in default or violation of, and has no knowledge of any default or violation by
any other party to each Interwave Employee Plan and Employment
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Agreement, and each Interwave Employee Plan and Employment Agreement has been
established and maintained in all material respects in accordance with its terms
and in material compliance with all applicable laws, statutes, orders, rules and
regulations, including but not limited to ERISA and the Code; (ii) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under Section 4975 of
the Code or Section 408 of ERISA (or any administrative class exemption issued
thereunder), has occurred with respect to any Interwave Employee Plan; (iii)
there are no actions, suits or claims pending, or, to the knowledge of
Interwave, threatened or reasonably anticipated against any Interwave Employee
Plan or Employment Agreement or against the assets of any Interwave Employee
Plan, except for claims for benefits in the ordinary course; (iv) each Interwave
Employee Plan and Employment Agreement can be amended, terminated or otherwise
discontinued after the Effective Time, without material liability to Alvarion,
Interwave or any of its ERISA Affiliates (other than ordinary administration
expenses); (v) there are no audits, inquiries or proceedings pending or, to the
knowledge of Interwave or any ERISA Affiliates, threatened by the IRS, DOL or
any other Governmental Entity with respect to any Interwave Employee Plan; and
(vi) neither Interwave nor any ERISA Affiliate is subject to any penalty or tax
with respect to any Interwave Employee Plan under Section 502(i) of ERISA or
Sections 4975 through 4980 of the Code.
(e) Retirement Plans and Welfare Plans. Neither Interwave nor any
ERISA Affiliate has ever maintained, established, sponsored, participated in,
contributed to, or is obligated to contribute to, or otherwise incurred any
obligation or liability (including, without limitation, any contingent
liability) under any Multiemployer Plan, any Pension Plan subject to Title IV of
ERISA or Section 412 of the Code, any multiple employer plan (as defined in
ERISA or the Code), or any "funded welfare plan" within the meaning of Section
419 of the Code. Any Interwave Employee Plan intended to be qualified under
Section 401(a) of the Code and each trust intended to qualify under Section
501(a) of the Code (i) has either applied for or obtained a favorable
determination, notification, advisory and/or opinion letter, as applicable, as
to its qualified status from the IRS or still has a remaining period of time
under applicable Treasury Regulations or IRS pronouncements in which to apply
for such letter and to make any amendments necessary to obtain a favorable
determination, and (ii) incorporates or has been amended to incorporate all
provisions required to comply with the Tax Reform Act of 1986 and subsequent
legislation, except to the extent that there is still a remaining period of time
under applicable Treasury Regulations or IRS pronouncements in which to
incorporate such provisions. For each Interwave Employee Plan that is intended
to be qualified under Section 401(a) of the Code, to the knowledge of Interwave,
there has been no event, condition or circumstance that has adversely affected
or is likely to adversely affect such qualified status. Except as set forth on
Section 2.11(e) of the Interwave Disclosure Schedule, no Interwave Employee Plan
provides health benefits that are not fully insured through an insurance
contract.
(f) No Post-Employment Obligations. Except as set forth in Section
2.11(f) of the Interwave Disclosure Schedule, no Interwave Employee Plan
provides, or reflects or represents any liability to provide post-termination
life, health or other welfare benefits to any person for any reason, except as
may be required by COBRA or other applicable statute, and, to the knowledge of
Interwave, Interwave and its Subsidiaries never represented, promised or
contracted (whether in oral or written form) to any Employee (either
individually or to Employees as a group) or any other person that such
Employee(s) or other person would be provided with post-termination life, health
or other welfare benefits, except to the extent required by statute.
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(g) Effect of Transaction.
(i) Except as set forth on Section 2.11(g) of the Interwave
Disclosure Schedule, the execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Interwave
Employee Plan, Employment Agreement, trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any Employee.
(ii) Except as set forth on Section 2.11(g) of the Interwave
Disclosure Schedule, no payment or benefit which will or may be made by
Interwave or its ERISA Affiliates with respect to any Employee will be
characterized as a "parachute payment," within the meaning of Section 280G(b)(2)
of the Code.
(h) Employment Matters. Interwave and its Subsidiaries: (i) are in
compliance in all material respects with all applicable foreign, federal, state
and local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and hours, in each case,
with respect to Employees; (ii) are not liable for any arrears of wages; and
(iii) are not liable for any payment to any trust or other fund governed by or
maintained by or on behalf of any Governmental Entity, with respect to
unemployment compensation benefits, social security or other benefits or
obligations for Employees (other than routine payments to be made in the normal
course of business and consistent with past practice). As of the date hereof, to
Interwave's knowledge, there are no pending, threatened or reasonably
anticipated claims or actions against Interwave under any worker's compensation
policy or long-term disability policy. Except as set forth in Section 2.11 of
the Interwave Disclose Schedule, each current Employee is an "at-will" employee
whose employment can be terminated by Interwave or any ERISA Affiliate at any
time, with or without cause.
(i) Labor. No work stoppage or labor strike against Interwave or any
of its Subsidiaries is pending, or to the knowledge of Interwave, threatened or
reasonably anticipated. Interwave does not know of any activities or proceedings
of any labor union to organize any Employees. Except as set forth in Section
2.11(i) of the Interwave Disclosure Schedule, there are no actions, suits,
claims, labor disputes or grievances pending, or, to the knowledge of Interwave,
threatened or reasonably anticipated relating to any labor, safety or
discrimination matters involving any Employee, including, without limitation,
charges of unfair labor practices or discrimination complaints, which, if
adversely determined, would, individually or in the aggregate, result in any
material liability to Interwave and its Subsidiaries, taken as a whole. Neither
Interwave nor any of its Subsidiaries has engaged in any unfair labor practices
within the meaning of the National Labor Relations Act. Except as set forth in
Section 2.11(i) of Interwave Disclosure Schedule, Interwave and its Subsidiaries
are not presently, nor have they been in the past, a party to, or bound by, any
collective bargaining agreement or union contract with respect to Employees and
no collective bargaining agreement is being negotiated by Interwave.
(j) International Employee Plan. Each International Employee Plan has
in all material respects been established, maintained and administered in
compliance with its terms and
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conditions and with the requirements prescribed by any and all statutory or
regulatory laws that are applicable to such International Employee Plan.
Furthermore, no International Employee Plan has unfunded liabilities, that as of
the Effective Time, will not be offset by insurance or fully accrued. Except as
required by law, no condition exists that would prevent Interwave or Alvarion
from terminating or amending any International Employee Plan at any time for any
reason without material liability to Interwave or its ERISA Affiliates (other
than ordinary administration expenses or routine claims for benefits).
2.12 Receivables. Section 2.12 of the Interwave Disclosure Schedule
provides an accurate and complete breakdown of all accounts receivable, notes
receivable and other receivables of the Company as of March 31, 2004. Except and
to the extent as has been reserved against in the consolidated financial
statement contained in the Interwave SEC Reports, there is no dispute with
respect to any material amount or the validity of any material accounts
receivable of Interwave or any of its Subsidiaries and all such accounts
receivable represent valid obligations of customers of Interwave arising from
bona fide transactions entered into in the ordinary course of business.
2.13 Restrictions on Business Activities There is no Contract, judgment,
injunction, order or decree binding upon Interwave or its Subsidiaries or to
which Interwave or any of its Subsidiaries is a party which has or could
reasonably be expected to have, following the consummation of the transaction,
the effect of prohibiting or impairing any material business activity of the
Amalgamated Company or any of the Subsidiaries, any acquisition of property by
the Amalgamated Company or any of the Subsidiaries or the conduct of business by
the Amalgamated Company or any of the Subsidiaries as currently conducted.
2.14 Property. Neither Interwave nor any of its Subsidiaries owns any
material real property. Interwave and each of its subsidiaries have good and
valid title to, or in the case of leased properties and assets, valid leasehold
interests in, all of their material properties and assets, free and clear of all
Liens except: (a) Liens for Taxes not yet due and payable; and (b) such Liens or
other imperfections of title, if any, as do not materially detract from the
value of or materially interfere with the present use of the property affected
thereby. All leases pursuant to which Interwave or any of its Subsidiaries lease
from others material real or personal property are valid and effective in
accordance with their respective terms except as would not result in a Material
Adverse Effect on Interwave, and there is not, under any of such leases, any
existing material default or event of default of Interwave or any of its
Subsidiaries or, to Interwave's knowledge, any other party (or any event which
with notice or lapse of time, or both, would constitute a material default and
in respect of which Interwave or Subsidiary has not taken adequate steps to
prevent such default from occurring) except as would not result in a Material
Adverse Effect of Interwave. All of the equipment of Interwave and its
Subsidiaries which is in regular use and which is material to the business of
Interwave and its Subsidiaries has been maintained in good operating condition
and repair, reasonable wear and tear excepted, except for such failures to be in
good operating condition and repair that would not, either individually or in
the aggregate, reasonably be expected to materially impact the operation of the
business of Interwave and its Subsidiaries, taken as a whole.
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2.15 Taxes.
(a) Definition of Taxes. For purposes of this Agreement, "Tax" or,
collectively, "Taxes", means: (i) any and all United States, Bermuda, federal,
provincial, state, local and foreign taxes, assessments and other governmental
charges, duties, impositions and liabilities, including taxes based upon or
measured by gross receipts, income, profits, sales, use and occupation, and
value added, ad valorem, transfer, franchise, withholding, payroll, recapture,
employment, excise and property taxes, together with all interest, linkage for
inflation, penalties and additions imposed with respect to such amounts; (ii)
any liability for the payment of any amounts of the type described in clause (i)
as a result of being or ceasing to be a member of an affiliated, consolidated,
combined or unitary group for any period (including, without limitation, any
liability under United States Treas. Reg. Section 1.1502-6 or any comparable
provision of foreign, state or local law); and (iii) any liability for the
payment of any amounts of the type described in clause (i) or (ii) as a result
of any express or implied obligation to indemnify any other Person or as a
result of any obligations under any agreements or arrangements with any other
Person with respect to such amounts and including any liability for taxes of a
predecessor entity.
(b) Tax Returns and Audits. Except as provided on Section 2.15 of the
Interwave Disclosure Schedule:
(i) Interwave and each of its Subsidiaries has timely filed,
taking into account properly obtained extensions of time to file, all United
States, federal, state, local and Bermuda and other foreign returns, estimates,
declarations, information statements and reports ("Returns") relating to Taxes
required to be filed by Interwave and each of its Subsidiaries with any Tax
authority, and such Returns are true and correct in all material respects and
have been completed in material accordance with applicable law. Interwave and
each of its Subsidiaries have paid all Taxes shown to be due on such Returns.
(ii) Interwave and each of its Subsidiaries (A) has paid or
accrued all Taxes it is required to pay or accrue and (B) has withheld from each
payment or deemed payment made to its past or present employees, officers,
directors and independent contractors, suppliers, creditors, stockholders or
other third parties all material Taxes and other deductions required to be
withheld and has, within the time and in the manner required by law, paid such
withheld amounts to the proper governmental authorities.
(iii) Neither Interwave nor any of its Subsidiaries has been
delinquent in the payment of any Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Interwave, nor has Interwave or any of
its Subsidiaries executed any waiver of any statute of limitations on or
extensions of the period for the assessment or collection of any Tax.
(iv) No audit or other examination of any Return of Interwave or
any of its Subsidiaries is currently in progress, nor has Interwave or any of
its Subsidiaries been notified of any request for such an audit or other
examination, nor is any taxing authority asserting, or to Interwave's knowledge,
threatening to assert, against Interwave or any of its Subsidiaries any claim
for Taxes. There are no matters relating to material Taxes under discussion
between any taxing authority and Interwave or any of its Subsidiaries.
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(v) No material adjustment relating to any Returns filed by
Interwave or any of its Subsidiaries (and no claim by a taxing authority in a
jurisdiction in which Interwave does not file Returns that Interwave or any of
its Subsidiaries may be subject to taxation by such jurisdiction) has been
proposed, formally or, to Interwave's knowledge, informally, by any Tax
authority to Interwave or any of its Subsidiaries or, to Interwave's knowledge,
any Interwave accountant, attorney or other advisor or representative thereof.
(vi) Neither Interwave nor any of its Subsidiaries has any
liability for unpaid Taxes in excess of $50,000 (or the equivalent in other
currencies) (whether or not shown to be due on any Return) which has not been
accrued for or reserved on the most recent Interwave balance sheet in accordance
with GAAP, whether asserted or unasserted, contingent or otherwise, other than
any liability for unpaid Taxes that may have accrued since the date of
Interwave's most recent balance sheet in connection with the operation of the
business of Interwave and its Subsidiaries in the ordinary course.
(vii) There is no Contract covering any employee or former
employee of Interwave or any of its Subsidiaries that, individually or in the
aggregate, could give rise to the payment of any amount that would not be
deductible as an expense pursuant to Section 162(m) of the Code, nor has
Interwave or any of its Subsidiaries made any payment of any amount that would
not be deductible as an expense pursuant to Section 404 of the Code.
(viii) Neither Interwave nor any of its Subsidiaries: (A) has ever
been a member of an affiliated group filing a consolidated Return; (B) has ever
been a party to any Tax sharing or Tax allocation agreement, arrangement or
understanding and does not owe any amount under any such agreement; (C) is
liable for the Taxes of any other person under United States Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise; and (D) is currently a party
to any joint venture, partnership or other arrangement that could be treated as
a partnership for income Tax purposes.
(ix) There are no Liens on the assets of Interwave or any of its
Subsidiaries relating to or attributable to Taxes except for Liens for Taxes not
yet due and payable.
(x) Neither Interwave nor any of its Subsidiaries has requested or
received a ruling from any taxing authority or signed a closing or other
agreement with any taxing authority which would reasonably be expected to have
an adverse effect on Interwave.
(xi) Neither Interwave nor any of its Subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" in a
distribution of stock qualifying for tax-free treatment under Section 355 of the
Code: (A) in the two years prior to the date of this Agreement or; (B) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Amalgamation.
(xii) Interwave and each of its Subsidiaries are in compliance in
all material respects with all terms and conditions of any Tax exemptions, Tax
holiday or other Tax reduction agreement, approval or order of any government
and, to the knowledge of Interwave, subject to
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receipt of the Approvals required herein, the consummation of the Amalgamation
will not have any adverse effect on the validity and effectiveness of any such
Tax exemptions, Tax holiday or other Tax reduction agreement or order.
2.16 Brokers. Except for fees and expenses payable to Broadview pursuant to
an Engagement Letter dated May 3, 2004, a true, correct and complete copy of
which has been provided to Alvarion and which has not been amended or modified
in any respect, Interwave has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders fees or agent's commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby, including the Amalgamation.
2.17 Intellectual Property.
(a) For the purposes of this Agreement, the following terms have the
meanings set forth below:
"Intellectual Property" shall mean any or all of the following
embodied in any media : (i) works of authorship including, without limitation,
computer programs, source code and executable code, whether embodied in
software, firmware or otherwise, documentation, designs, files, records, data
and mask works; (ii) inventions (whether or not patentable), improvements, and
technology; (iii) proprietary and confidential information, trade secrets and
know how; (iv) databases, data compilations and collections and technical data;
(v) logos, trade names, trade dress, trademarks and service marks; (vi) domain
names, web addresses and sites; and (vii) tools, methods and processes.
"Intellectual Property Rights" shall mean any and all worldwide,
common law and/or statutory rights in, arising out of, or associated therewith:
(i) all United States and foreign patents and utility models and applications
therefor and all reissues, divisions, re-examinations, renewals, extensions,
provisionals, continuations and continuations-in-part thereof, and equivalent or
similar rights anywhere in the world in inventions and discoveries including
without limitation invention disclosures ("Patents"); (ii) all trade secrets and
other rights in know how and confidential or proprietary information; (iii) all
copyrights, copyright registrations and applications therefor, and mask works
and mask work registrations and applications therefor, and all other rights
corresponding thereto ("Copyrights"); (iv) all uniform resource locators, e-mail
and other internet addresses and domain names and applications and registrations
therefore ("URLs"); all trade names, logos, common law trademarks and service
marks, trademark and service ▇▇▇▇ registrations and applications therefor and
all goodwill associated therewith ("Trademarks"); (v) all "moral" or economic
rights of authors and inventors, however denominated throughout the world, and
(vi) any similar, corresponding or equivalent rights to any of the foregoing.
"Interwave Intellectual Property" shall mean any Intellectual
Property and Intellectual Property Rights, including Registered Intellectual
Property Rights that are owned by or exclusively licensed to Interwave or any of
its Subsidiaries.
"Registered Intellectual Property Rights" shall mean all United
States, international and foreign: (i) Patents, including applications therefor;
(ii) registered Trademarks,
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applications to register Trademarks, including intent-to-use applications, or
other registrations or applications related to Trademarks; (iii) Copyright
registrations and applications to register Copyrights; and (iv) any other
Intellectual Property Right that is the subject of an application, certificate,
filing, registration or other document issued by, filed with, or recorded by,
any state, government or other public legal authority at any time.
"Interwave Product" means any product or service offering of
Interwave or any of its Subsidiaries being marketed, sold or licensed by
Interwave or any of its Subsidiaries.
(b) Section 2.17(b) of the Interwave Disclosure Schedule lists all
Registered Intellectual Property Rights owned or exclusively licensed by, or
filed in the name of, or applied for by Interwave or any of its Subsidiaries as
of the date hereof (the "Interwave Registered Intellectual Property Rights") and
lists any proceedings or actions before any court, tribunal (including the
United States Patent and Trademark Office (the "PTO") or equivalent authority
anywhere in the world) which Interwave has received notice of and which are
related to any of Interwave Registered Intellectual Property Rights or Interwave
Intellectual Property.
Except as set forth in Section 2.17 of the Disclosure Schedule,
(c) Interwave has no knowledge of any facts or circumstances that
would render any Interwave Registered Intellectual Property invalid. Without
limiting the foregoing, Interwave knows of no information, materials, facts, or
circumstances, including any information or fact that would constitute prior
art, that would render any of Interwave Registered Intellectual Property Rights
invalid or unenforceable, or would adversely affect any pending application for
any Interwave Registered Intellectual Property Right and neither Interwave nor
any of its Subsidiaries has misrepresented, or failed to disclose, any facts or
circumstances in any application for any Interwave Registered Intellectual
Property Right that would constitute fraud or a misrepresentation with respect
to such application or that would otherwise adversely affect the validity or
enforceability of any Interwave Registered Intellectual Property Right.
(d) Each material item of Interwave Registered Intellectual Property
Rights (that has been issued or granted) is valid and subsisting, and all
necessary registration, maintenance and renewal fees currently due in connection
with Interwave Registered Intellectual Property Rights have been paid and all
documents and certificates currently due in connection with such Interwave
Registered Intellectual Property Rights have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of obtaining or
maintaining such Interwave Registered Intellectual Property Rights. There are no
actions that must be taken by Interwave or any of its Subsidiaries within sixty
(60) days of the Closing Date, including the payment of any registration,
maintenance or renewal fees or the filing of any responses to the PTO office
actions, documents, applications or certificates for the purposes of
prosecuting, maintaining, perfecting or preserving or renewing any Interwave
Registered Intellectual Property Rights. In each case in which Interwave or any
of its Subsidiaries has acquired ownership of any Intellectual Property Rights
from any person, Interwave or such Subsidiary has obtained an assignment
sufficient to irrevocably transfer all rights in such Intellectual Property
Rights (including the right to seek past and future damages with respect
thereto) to Interwave or such Subsidiary.
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(e) No Contract to which Interwave or a Subsidiary is a party shall
restrict (or impose a payment of any kind to any third party for) the
transferability, alienation or licensing of Interwave Intellectual Property or
any Intellectual Property Rights that are licensed to Interwave or any of its
Subsidiaries by, the Amalgamated Company and/or Alvarion.
(f) Each material item of Interwave Intellectual Property is free and
clear of any Liens. Interwave and its Subsidiaries are the exclusive owners or
exclusive licensees of all Interwave Intellectual Property. Interwave or one or
more of its Subsidiaries is the exclusive owner, or has acquired the necessary
licenses to use, all material Trademarks used in connection with the operation
or conduct of the business of Interwave, including the sale, distribution or
provision of any Interwave Products by Interwave or any of its Subsidiaries.
Interwave or one or more of its Subsidiaries is the exclusive owner of, or has
acquired the appropriate licenses to use, all Copyrighted works that are
included or incorporated into Interwave Products or which Interwave or any of
its Subsidiaries otherwise purports to own. To Interwave's knowledge, the
Interwave Products do not infringe on any Patents held by third parties.
(g) Interwave has not granted any exclusive license of or right to use
or authorized the exclusive retention of any rights to use or joint ownership of
any Interwave Intellectual Property, to any other person.
(h) All Interwave Intellectual Property was created solely by either
(i) employees of Interwave or one or more of its Subsidiaries acting within the
scope of their employment, or (ii) by third parties who have validly and
irrevocably assigned all of their rights, including Intellectual Property Rights
therein, to Interwave or one of its Subsidiaries, and no third party owns any
rights to any of the Interwave Intellectual Property.
(i) To the extent that any Interwave Intellectual Property has been
developed or created independently or jointly by any person other than Interwave
or any of its Subsidiaries for which Interwave or such Subsidiary has paid any
consideration of any kind, Interwave or one or more of its Subsidiaries has a
written Contract with such person with respect thereto, and Interwave or one or
more of its Subsidiaries thereby has obtained ownership of, and is the exclusive
owner of, all such Interwave Intellectual Property and associated Intellectual
Property Rights by operation of law or by valid assignment.
(j) Other than software licensed from third parties identified in
Section 2.17(j) of the Interwave Disclosure Schedule or inbound "shrink-wrap"
and similar generally available commercial binary code end-user licenses,
Interwave Intellectual Property constitutes all the material items of
Intellectual Property and Intellectual Property Rights, and, to Interwave's
knowledge, Patents, which, as of the date hereof, are used in and necessary to
the conduct of the business of Interwave as it currently is conducted by
Interwave.
(k) Other than: (i) inbound "shrink-wrap" and similar generally
available commercial binary code end-user licenses and (ii) customer agreements
entered into in the ordinary course of Interwave's business, the Contracts
listed in Section 2.17(k) of the Interwave Disclosure Schedule include all
Contracts to which Interwave or any of its Subsidiaries is a party as of the
date hereof with respect to any Intellectual Property and Intellectual Property
Rights ("IP Contracts").
-22-
All IP Contracts are in full force and effect and the consummation of the
transactions contemplated by this Agreement will not under the terms of such IP
Contracts, violate, trigger any right of any third party to obtain any source
code from any escrow under, or result in the breach, modification, cancellation,
termination or suspension of such IP Contracts. Interwave is not in breach of
nor has Interwave failed to perform under, any of the foregoing IP Contracts
and, to Interwave's knowledge, no other party to any such IP Contract, is in
material breach thereof or has materially failed to perform thereunder. The IP
Contracts will not restrict and, following the Closing Date, the Amalgamated
Company will be permitted to exercise all of Interwave's rights under such IP
Contracts to the same extent Interwave would have been able to had the
Amalgamation not occurred and without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which Interwave
would otherwise be required to pay under such IP Contracts.
(l) Except for inbound "shrink-wrap" and generally available
commercial binary code end-user or enterprise licenses and except for technology
in the public domain, all Intellectual Property and, to Interwave's knowledge,
Patents, used in and necessary to the conduct of Interwave's business as
presently conducted by Interwave was created solely by: (i) employees of
Interwave or one or more of its Subsidiaries acting within the scope of their
employment; (ii) third parties who have validly and irrevocably assigned all of
their rights, including Intellectual Property Rights therein, to Interwave or
one or more of its subsidiaries or (iii) third parties who have granted to
Interwave or one or more of its subsidiaries a license (sufficient for the
conduct of Interwave's business as presently conducted by Interwave) to all such
third party's Intellectual Property Rights in such Intellectual Property, and no
third party owns or has any exclusive rights to any of Interwave Intellectual
Property owned by Interwave or any of its Subsidiaries (other than non-exclusive
license rights therein in connection with licensing Interwave Products in the
ordinary course of Interwave business consistent with past practice).
(m) There are no Contracts between Interwave or any of its
Subsidiaries and any other person with respect to Interwave Intellectual
Property or any Intellectual Property Rights that are licensed to Interwave or
any of its Subsidiaries under which there is any material dispute as of the date
hereof regarding the rights and obligations specified in such Contracts, or
performance under such Contracts including with respect to any payments to be
made or received by Interwave or any of its Subsidiaries thereunder.
(n) Interwave or one or more of its Subsidiaries own or have the right
to use pursuant to valid licenses, all software development tools, library
functions, and compilers used by Interwave in the operation of the business of
Interwave or such Subsidiary or that are required to create, modify, compile,
operate or support any Interwave Product and such right to use shall not be
affected by the Amalgamation and shall be vested in the Amalgamated Company or
the Subsidiaries. No software licensed pursuant to any GNU public license (or
similar license that requires or purports to require the distribution of source
code of derivative works for open source software) is incorporated into any
Interwave Product.
(o) No government funding, facilities of a university, college, other
educational institution or research center or funding from third parties was
used in the development of any Interwave Intellectual Property. To the knowledge
of Interwave, no current or former employee, consultant or independent
contractor of Interwave, who was involved in, or who contributed to, the
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creation or development of any Interwave Intellectual Property, has performed
services for the government, university, college, or other educational
institution or research center during a period of time during which such
employee, consultant or independent contractor was also performing services for
Interwave.
(p) No Interwave Intellectual Property as of the date hereof was
developed with funding provided by any Governmental Entity or quasi-Governmental
Entity. No Contact to which Interwave is a party restricts Interwave and/or
Alvarion or the Amalgamated Company from transferring, conveying and/or
assigning Interwave Intellectual Property to any entity located in any
jurisdiction in the world.
(q) The design, development, use, import, manufacture and sale of
Interwave Products as it currently is conducted by Interwave, does not infringe
or misappropriate any Intellectual Property Right of any person, or constitute
unfair competition or trade practices under the laws of any jurisdiction, and
Interwave has not received notice from any person claiming Interwave infringes
or misappropriates any Intellectual Property Right of any person or constitutes
unfair competition or trade practices under the laws of any jurisdiction (nor
does Interwave have knowledge of any basis therefor). To the knowledge of
Interwave, the design, development, use, import, manufacture and sale of
Interwave Products as conducted by Interwave and the Interwave Intellectual
Property do not infringe the Patents of a third party.
(r) To the knowledge of Interwave, no person is materially infringing
or misappropriating any Interwave Intellectual Property.
(s) To the knowledge of Interwave, no Interwave Intellectual Property
Right is subject to any proceeding or outstanding decree, order, judgment,
Contract or stipulation that restricts in any manner the use, transfer or
licensing thereof by Interwave or which would reasonably be expected to
adversely affect the validity, use or enforceability of such Interwave
Intellectual Property.
(t) Interwave and its Subsidiaries have taken commercially reasonable
steps to protect Interwave's and its Subsidiaries' rights in confidential
information and trade secrets of Interwave and its Subsidiaries or of other
persons, to the extent required in connection with the disclosure of such
confidential information or trade secrets to Interwave or any of its
Subsidiaries. Without limiting the foregoing, Interwave has, and enforces, a
policy requiring each employee, consultant and contractor to execute proprietary
information, confidentiality and assignment Contracts substantially in one of
the forms made available to Alvarion and all current and former employees,
consultants and contractors of Interwave and its Subsidiaries are in material
compliance with such policy. All employees of Interwave and its Subsidiaries
that have participated in the development of Interwave Products have entered
into one or more valid and binding written Contracts with Interwave or one of
its Subsidiaries sufficient to vest title in Interwave or such Subsidiary of all
Intellectual Property, including all accompanying Intellectual Property Rights,
created by such employee in the scope of his or her employment with Interwave or
such Subsidiary.
(u) No agreement to which Interwave or its Subsidiary is a party will,
following the Amalgamation, result in: (i) Alvarion's or the Amalgamated
Company's granting to any third
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party any right to or with respect to any Intellectual Property or Intellectual
Property Right owned by, or licensed to, either of them; (ii) either Alvarion's
or the Amalgamated Company's being bound by, or subject to, any non-compete or
other restriction on the operation or scope of their respective businesses; or
(iii) either Alvarion's or the Amalgamated Company's being contractually
obligated to pay any royalties or other amounts to any third party in excess of
those currently payable by Interwave in respect thereof.
2.18 Contracts. Except as set forth in Section 2.18 of the Interwave
Disclosure Schedule, as of the date hereof neither Interwave nor any of its
Subsidiaries is a party to or is bound by any of the following Contracts (other
than any such Contract which is no longer of any force or effect):
(a) (i) any employment or consulting Contract with any Employee, or
(ii) any service, operating or management Contract with respect to any of its
facilities (whether leased or owned) other than (A) those that are terminable by
Interwave or any of its Subsidiaries on no more than ninety (90) days' notice
without liability or financial obligation to Interwave, and (B) those that do
not involve in excess of $200,000 (or, with respect to consulting Contracts,
$100,000) being paid by Interwave per annum;
(b) any Contract of indemnification or any guaranty (other than any
Contract of indemnification or warranty entered into in connection with the
sale, license, distribution or marketing of products or services or Contracts
which typically contain indemnity provisions but which are not primarily
indemnification agreements (such as leases for real property, service contracts
and the like), entered into in the ordinary course of business);
(c) any Contract containing any covenant limiting in any respect the
right of Interwave or any of its Subsidiaries to engage in any line of business
or to compete with any person or granting any exclusive distribution rights;
(d) any Contract relating to the disposition or acquisition by
Interwave or any of its subsidiaries after the date of this Agreement of a
material amount of assets not in the ordinary course of business or pursuant to
which Interwave or any of its subsidiaries has any material ownership interest
in any corporation, partnership, joint venture or other business enterprise
other than Interwave's Subsidiaries;
(e) any dealer, distributor, joint marketing or development Contract
under which Interwave or any of its Subsidiaries have continuing material
obligations to jointly market any Interwave Product and which may not be
canceled without penalty upon notice of ninety (90) days or less, or pursuant to
which Interwave or any of its Subsidiaries have continuing material obligations
to jointly develop any Intellectual Property that will not be owned, in whole or
in part, by Interwave or any of its Subsidiaries and which may not be canceled
without penalty upon notice of ninety (90) days or less;
(f) any Contract to license any third party to manufacture, reproduce,
sell or distribute any Interwave Products, except Contracts with distributors or
sales representative in the normal course of business cancelable without penalty
upon notice of ninety (90) days or less and substantially in the form previously
provided to Alvarion;
-25-
(g) any Contract to provide source code to any third party for any
Interwave Product that is material to Interwave and its Subsidiaries taken as a
whole;
(h) any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other Contracts relating to the borrowing of money or
extension of credit, other than trade payables incurred in the ordinary course
of business;
(i) any material settlement agreement under which Interwave has
ongoing obligations; and
(j) any other Contract involving in excess of $165,000 being paid by
or to Interwave per annum.
Neither Interwave nor any of its Subsidiaries, nor to Interwave's knowledge
any other party to any Contract required to be disclosed in Section 2.17 or 2.18
of the Interwave Disclosure Schedule (any such contract, an "Interwave
Contract"), is in material breach, violation or default under, and neither
Interwave nor any of its Subsidiaries has received written notice that it has
breached, violated or defaulted under, any of the material terms or conditions
of any Interwave Contract in such a manner as would permit any other party to
cancel or terminate any such Interwave Contract, or would permit any other party
to seek material damages or other remedies (for any or all of such breaches,
violations or defaults, in the aggregate). To Interwave's knowledge, no third
party has breached, violated or defaulted under any of the material terms of any
Interwave Contract. Interwave has made available to Alvarion true and correct
copies of all Contracts between Interwave and its top ten customers (based on
revenues for the twelve months ended March 31, 2004).
2.19 Opinion of Financial Advisor. Interwave's financial advisor,
Broadview, has delivered to the Board of Directors of Interwave an oral opinion,
to be confirmed in writing, to the effect that, as of the date of such opinion,
the aggregate merger consideration is fair from a financial point of view to the
Interwave shareholders.
2.20 Insurance. Interwave maintains insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of Interwave and its Subsidiaries (collectively, the
"Insurance Policies") which are of the type and in amounts customarily carried
by persons at similar stages of development and financial condition conducting
businesses similar to those of Interwave and its Subsidiaries. A list of all the
Insurance Policies covering Interwave's operations in the United States is
attached as Section 2.20 of the Disclosure Schedule. There is no material claim
by Interwave or any of its Subsidiaries pending under any of the Insurance
Policies as to which coverage has been denied or disputed by the underwriters of
such policies or bonds.
2.21 Board Approval. As of the date hereof and subject to Section 5.2(d),
the Board of Directors of Interwave has unanimously: (a) determined that this
Agreement, the Amalgamation and the other transactions contemplated by this
Agreement are fair to, and in the best interests of, Interwave and its
shareholders, and that, considering the financial position of the merging
companies, no reasonable concern exists that the Amalgamated Company will be
unable to fulfill the obligations of Interwave to its creditors; (b) subject to
the approval of Interwave shareholders as
-26-
provided in Section 2.4, approved this Agreement, the Amalgamation and the other
transactions contemplated by this Agreement; and (c) determined to recommend
that the shareholders of Interwave approve this Agreement, the Amalgamation and
the other transactions contemplated by this Agreement.
2.22 Inapplicability of Certain Statutes. Other than the Bermuda Act, the
Delaware Code and other than competition statutes, Interwave is not subject to
any business combination, control share acquisition, fair price or similar
statute that applies to the Amalgamation or any other transaction contemplated
by this Agreement.
2.23 Foreign Corrupt Practices Act. Neither Interwave nor any Subsidiary,
nor, to the knowledge of Interwave, any agent or employee has, directly or
indirectly, materially violated any applicable provision of the Foreign Corrupt
Practices Act of 1977, as amended.
2.24 Major Customers and Suppliers; Product Prices.
(a) Section 2.24 (a) of the Disclosure Schedule contains a list of all
customers, including distributors, of Interwave for each of the two (2) most
recent fiscal years showing separately the total sales (including payment terms)
and total shipments to each such customer during each such year and any firm
orders received by Interwave from such customer, provided such sales exceeded
$100,000 in any such fiscal year. Except to the extent noted in Section 2.24(a)
of the Disclosure Schedule, no customer described in Section 2.24 of the
Disclosure Schedule has indicated in writing to Interwave its intention to
cancel any purchase order, or return any products purchased by it, to the extent
such cancellations or returns exceed in the aggregate $100,000.
(b) Section 2.24(b) of the Interwave Disclosure Schedule contains a
list by product line of the twenty major sales representatives, dealers,
distributors and franchisees of Interwave. Interwave has furnished to Alvarion
copies of all sales representatives, dealers, distributors and franchise
contracts, and all substantial additions, modifications or exceptions thereto.
(c) Section 2.24(c) of the Interwave Disclosure Schedule contains a
list of Interwave's twenty major suppliers (determined on the basis of the total
dollar amount of purchases during 2003 and the first calendar quarter of 2004)
showing the total purchases from each such supplier during the year 2003 and the
first calendar quarter of 2004 and any open orders placed by Interwave with such
supplier.
2.25 Product Warranty and Product Liability. Interwave and its Subsidiaries
have not received any written product liability claims and any claims, actions,
suits or proceedings pending or that to Interwave's knowledge are threatened,
relating to the Interwave Products or to Interwave, within the last three (3)
years (whether or not covered by insurance), except for (i) claims which have
been fully settled and (ii) unresolved claims, actions, suits or proceedings
that would not have a Material Adverse Effect on Interwave. The Interwave
Products have been designed and manufactured so as to comply, in all material
respects, with all mandatory governmental standards and specifications currently
in effect in jurisdictions where the Interwave Products are sold, and have
received all governmental approvals necessary to allow their sale and use and
comply with all
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customer specifications in jurisdictions where the Interwave Products are sold,
except where such non-compliance or failure to receive approvals will not have a
Material Adverse Effect on Interwave.
2.26 Inventory. In each set of consolidated financial statements
(including, in each case, any related notes thereto) to the Interwave SEC
Reports, Interwave's inventory has been valued in accordance with U.S. GAAP
consistently applied and consists of items of quality useable and saleable in
the normal course of Interwave's business except for items of obsolete materials
and materials of below standard quality, all of which have been written down to
realizable market value or for which adequate reserves have been provided.
2.27 Full Disclosure. This Section 2 (including the Interwave Disclosure
Schedule) does not (i) contain any representation, warranty or information that
is false or misleading with respect to any material fact, or (ii) omit to state
any material fact necessary in order to make the representations, warranties and
information contained herein and therein not false or misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ALVARION AND MERGER SUB
Alvarion and Merger Sub jointly and severally represent and warrant to
Interwave, as of the date hereof, subject to such exceptions as are specifically
disclosed in writing in the disclosure schedule supplied by Alvarion to
Interwave, dated as of the date hereof and certified by a duly authorized
officer of Alvarion (the "Alvarion Disclosure Schedule"), as follows:
3.1 Organization and Qualification. Each of Alvarion and its subsidiaries
is a corporation duly organized, validly existing and, where applicable, in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted, except
where the failure to do so would not, individually or in the aggregate, have a
Material Adverse Effect on Alvarion. Each of Alvarion and its subsidiaries is in
possession of all Approvals necessary to own, lease and operate the properties
it purports to own, operate or lease and to carry on its business as it is now
being conducted, except where the failure to have such Approvals would not,
individually or in the aggregate, have a Material Adverse Effect on Alvarion.
Each of Alvarion and its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and, where applicable, is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect on Alvarion. Merger Sub is a newly incorporated Delaware
corporation. Except in connection with this Agreement, Merger Sub has not
conducted any operations nor entered into any agreements, nor will it do either
prior to the Effective Time. Merger Sub has no obligations or liabilities,
either accrued, absolute, contingent or otherwise, nor will it have any such
obligations or liabilities prior to the Effective Time or the earlier
termination of this Agreement.
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3.2 Charter Documents. Alvarion has previously furnished to Interwave
complete and correct copies of its Memorandum of Association and Articles of
Association as amended to date (together, the "Alvarion Charter Documents") and
the Certificate of Incorporation and Bye-laws of Merger Sub (the "Merger Sub
Charter Documents"). Such Alvarion Charter Documents and Merger Sub Charter
Documents are in full force and effect. Alvarion is not in violation of any of
the provisions of the Alvarion Charter Documents, and Merger Sub is not in
violation of any of the provisions of the Merger Sub Charter Documents.
3.3 Authority Relative to this Agreement. Each of Alvarion and Merger Sub
has all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement by Alvarion and by Merger Sub and the performance by each of
Alvarion and Merger Sub of its obligations hereunder have been duly and validly
authorized by all necessary corporate action on the part of Alvarion and Merger
Sub, and no other corporate proceedings on the part of Alvarion or Merger Sub
and no vote by Alvarion's stockholders are necessary to authorize this Agreement
or for each of Alvarion and Merger Sub to perform its obligations hereunder.
This Agreement has been duly and validly executed and delivered by Alvarion and
by Merger Sub and, assuming the due authorization, execution and delivery by
Interwave, constitutes a legal and binding obligation of Alvarion and of Merger
Sub, enforceable against Alvarion and Merger Sub in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting creditors' rights generally and laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.
3.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Alvarion and
Merger Sub do not, and the performance of this Agreement by Alvarion and Merger
Sub will not: (i) conflict with or violate the Alvarion Charter Documents,
Merger Sub Charter Documents or equivalent organizational documents of any of
Alvarion's subsidiaries; or (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Alvarion or any of its
subsidiaries or by which it or their respective properties are bound or affected
or (iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or materially
impair Alvarion's or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of Alvarion or any of its
subsidiaries pursuant to, any material Contract to which Alvarion or any of its
subsidiaries is a party or by which Alvarion or any of its subsidiaries or its
or any of their respective properties are bound or affected, except to the
extent such conflict, violation, breach, default, impairment or other effect
would not in the case of clauses (ii) or (iii), individually or in the aggregate
prevent or materially delay consummation of the Amalgamation or otherwise
prevent the parties hereto from performing their obligations under this
Agreement, including Alvarion's obligations to pay the aggregate amount of Per
Share Cash Consideration and all Accounts Payable Costs.
(b) The execution and delivery of this Agreement by Alvarion and
Merger Sub do not, and the performance of this Agreement by Alvarion and Merger
Sub will not, require any
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consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity with respect to Alvarion and Merger Sub except: (i)
for: (A) compliance with applicable requirements of the Securities Act; (B)
compliance with the pre-merger notification requirements of the HSR Act and of
foreign governmental entities; (C) compliance with the rules and regulations of
Nasdaq; and (D) (i) other filings and recordation as required by Governmental
Entities other than those in the United States; and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications: (A) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Alvarion, or (B)
would not prevent or materially delay the consummation of the Amalgamation or
otherwise prevent the parties hereto from performing their respective
obligations under this Agreement.
3.5 SEC Filings; Financial Statements.
(a) Alvarion has made available to Interwave a correct and complete
copy of each report, schedule, registration statement and definitive proxy
statement filed by Alvarion with the SEC since December 31, 2002 and prior to
the date of this Agreement (the "Alvarion SEC Reports"), which are all the
forms, reports and documents required to be filed by Alvarion with the SEC since
such time. The Alvarion SEC Reports: (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder; and (ii) did not at
the time of filing thereof (and if any Alvarion SEC Report filed prior to the
date of this Agreement was amended or superseded by a filing prior to the date
of this Agreement then also on the date of filing of such amendment or
superseded filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Alvarion SEC Reports: (i)
complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto in effect at the time of such
filing; (ii) was prepared in accordance with United States GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, may not contain
footnotes as permitted by Form 10-Q of the Exchange Act) and each fairly
presents the consolidated financial position of Alvarion and its consolidated
subsidiaries at the respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated (subject, in the case of
unaudited statements, to normal adjustments which were not or are not expected
to be material in amount); and (iii) fairly presents in all material respects
Alvarion's revenue recognition policies.
3.6 Financing. Alvarion has, or will have at the Closing, sufficient cash
or cash equivalent funds to pay the aggregate amount of Per Share Cash
Consideration and all Accounts Payable Costs.
3.7 Brokers. Alvarion has not incurred nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby, except for any such fees and expenses payable solely by
Alvarion.
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3.8 Merger Sub Board Approval. The Board of Directors of Merger Sub has
unanimously: (a) determined that the Amalgamation is fair to, and in the best
interests of, Merger Sub and its shareholders, and that, considering the
financial position of the merging companies, no reasonable concern exists that
the Amalgamated Company will be unable to fulfill the obligations of Merger Sub
to its creditors; (b) approved this Agreement, the Amalgamation and the other
transactions contemplated by this Agreement; and (c) determined to recommend
that the shareholder of Merger Sub approves this Agreement, the Amalgamation and
the other transactions contemplated by this Agreement.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. Conduct of Business by Interwave. Except as required or permitted by
the terms of this Agreement, as set forth in Section 4.1 of the Interwave
Disclosure Schedule or approved by Alvarion in writing, during the period from
the date of this Agreement and continuing until the earlier of the termination
of this Agreement pursuant to its terms or the Effective Time, each of Interwave
and its Subsidiaries shall carry on its business in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted and in
material compliance with all applicable laws and regulations, pay its debts and
Taxes when due (subject to good faith disputes over such debts or Taxes), pay or
perform other material obligations when due, and use its commercially reasonable
efforts consistent with past practices and policies to: (a) preserve intact its
present business organization; (b) keep available the services of its present
officers and key employees; and (c) preserve its relationships with material
customers, suppliers, distributors, licensors, licensees and others with which
it has significant business dealings; provided, however, that in the event
Interwave shall be required to take or refrain from taking any action pursuant
to this Section 4.1 that would cause or would have the result of causing any
representation or warranty of Interwave set forth in this Agreement to be or
become inaccurate, Interwave shall so notify Alvarion in writing, and as soon as
practicable, and in no event more than three (3) business days, after Alvarion's
receipt of such notice Alvarion shall advise Interwave in writing as to whether
Interwave should (x) take or refrain from taking such action, in which event
such action or inaction shall not be deemed to constitute a breach of, or
inaccuracy in, such representations or warranties, or (y) cause such
representation or warranty to remain accurate, in which case such action or
inaction shall not be deemed to constitute a breach of this Section 4.1.
Interwave shall by 5 p.m. Pacific Daylight Time on every second Tuesday
beginning on August 10, 2004 provide Alvarion with Interwave's current and
estimated bookings, sales, cash receipts and cash expenditures for the then
current fiscal quarter.
In addition, except as required or permitted by the terms of this
Agreement, as set forth in Section 4.1 of the Interwave Disclosure Schedule or
approved by Alvarion in writing, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Interwave shall not do any of the
following and shall not permit its Subsidiaries to do any of the following (it
being understood and agreed that any action taken or omitted to be taken by
Interwave after the execution and delivery of this Agreement that is either
permitted by the terms of this Section 4.1 or approved by Alvarion in
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writing pursuant to this Section 4.1 shall not be deemed to constitute a breach
of, or inaccuracy in, any of the representations or warranties of Interwave set
forth in this Agreement):
(a) Waive any stock repurchase rights, accelerate, (other than in
accordance with written agreements outstanding on the date hereof and disclosed
on Section 2.3 or 2.11(g) of the Interwave Disclosure Schedule), amend or change
the period of exercisability of any Interwave Share Option, or reprice any
Interwave Share Option or authorize cash payments in exchange for any Interwave
Share Option or allow any new enrollments in the ESPP or allow any participant
in the ESPP to increase his or her participation rate in the ESPP;
(b) Grant any severance or termination pay to any officer or employee
except in the ordinary course of business consistent with past practices or
pursuant to written agreements outstanding, or written policies existing, on the
date hereof and included in the Interwave Disclosure Schedule, or as required by
applicable law or adopt any new severance plan, or amend or modify or alter in
any manner any severance plan, agreement, custom, policy or arrangement existing
on the date hereof, or grant any equity based compensation, whether payable in
cash or stock, including any Interwave Share Options except as permitted under
Section 4.1(g), all except the issuance of Interwave Shares upon exercise of
vested Options contemplated by this Agreement;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify any rights to the Interwave Intellectual Property, or enter into
any agreements or make other commitments or arrangements to grant, transfer or
license to any person future patent rights, other than non-exclusive licenses
granted to end users in the ordinary course of business consistent with past
practices; provided that in no event shall Interwave: (i) license on an
exclusive basis or sell any Intellectual Property Rights owned by Interwave; or
(ii) enter into any agreement (A) containing pricing or discounting terms or
provisions other than in the ordinary course of business consistent with past
practices, (B) limiting the right of Interwave to engage in any line of business
or to compete with any person;
(d) Enter into, renew or modify any Contracts relating to the
distribution or marketing by third parties of Interwave Products;
(e) Declare, set aside or pay any dividends on or bonus issue of or
make any other distributions (whether in cash, stock, equity securities or
property) in respect of any capital stock or consolidate, subdivide, split,
combine or reclassify any capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for any
capital stock;
(f) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Interwave or its Subsidiaries or any options,
warrants, calls or rights to acquire any such shares, except repurchases of
unvested shares in connection with the termination of the employment
relationship with any Employee pursuant to share option or purchase agreements
in effect on the date hereof;
(g) Issue, deliver, sell, authorize, pledge or otherwise encumber (or
propose any of the foregoing with respect to) any shares of capital stock or any
securities convertible into or exercisable or exchangeable for shares of capital
stock, or subscriptions, rights, warrants or options
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to acquire any shares of such capital stock or any securities convertible into
shares of such capital stock, or enter into other Contracts of any character
obligating it to issue any such shares or convertible securities, other than the
issuance, delivery and sale of: (i) Interwave Shares pursuant to the exercise of
share options, warrants and other agreements set forth in Section 2.3 of the
Interwave Disclosure Schedule, in each case outstanding as of the date of this
Agreement; (ii) Interwave Shares issuable to participants in the ESPP consistent
with the terms thereof; and (iii) grants of Interwave Share Options to purchase
Interwave Shares under an Interwave Option Plan to new hires according to the
terms of the Option Guidelines set forth in Schedule 4.1(g), which Interwave
Share Options shall not accelerate as a result of the occurrence of any of the
transactions contemplated by this Agreement (whether alone or upon the
occurrence or nonoccurrence of any additional or subsequent events);
(h) Cause, permit or propose any amendments to the Interwave Charter
Documents (or similar governing instruments of any of its Subsidiaries);
(i) Acquire or agree to acquire by merging, amalgamating or
consolidating with, or by purchasing any equity interest in or a portion of the
assets of, or by any other manner, any business or any person or division
thereof, or otherwise acquire or agree to acquire all or substantially all of
the assets of any of the foregoing, enter into any joint ventures, strategic
partnerships or alliances or form or agree to form any subsidiaries;
(j) Sell, lease, license, encumber, convey, assign, sublicense or
otherwise dispose of or transfer any properties or assets or any interest
therein other than: (i) sales and licenses in the ordinary course of business
consistent with past practice; and (ii) the sale, lease or disposition (other
than through licensing permitted by clause (c)) of property or assets which are
not material, individually or in the aggregate, to the business of Interwave and
its subsidiaries taken as a whole in the ordinary course of business consistent
with past practice; modify, amend or terminate any existing Contract affecting
the use, possession or operation of any material properties or assets other than
in the ordinary course of business consistent with past practice; or grant or
otherwise create or consent to the creation of any Lien affecting any owned or
leased real property or any part thereof other than in the ordinary course of
business consistent with past practice;
(k) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Interwave,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than in connection with the financing of ordinary
course trade payables consistent with past practice;
(l) (i) Adopt or amend any Employment Agreement or Interwave Employee
Plan, except as may be required by law; or enter into any employment Contract or
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will," except as may be required by Legal
Requirements, and who are not officers of Interwave); (ii) agree to pay or pay
any special bonus or special remuneration to any director or employee; or (iii)
increase the salaries or wage rates or benefits (including rights to severance
or indemnification) of its directors, officers,
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employees or consultants except, in each case, as may be required by law or by
any existing employee benefit plan, policy, arrangement, program or Contract
disclosed on Section 2.11 of the Interwave Disclosure Schedule;
(m) (i) Pay, discharge, or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)
or settle any litigation (whether or not commenced prior to the date of this
Agreement), other than the payment, discharge, settlement or satisfaction, in
the ordinary course of business consistent with past practice or in accordance
with their terms in existence as of the date hereof, or (ii) waive the benefits
of, agree to modify in any manner, terminate, release any person from or
knowingly fail to enforce any confidentiality or similar Contract to which
Interwave or any of its subsidiaries is a party or of which Interwave or any of
its Subsidiaries is a beneficiary;
(n) Modify or amend in any material respect, or terminate, any
Contract set forth or required to be set forth in Section 2.17 or 2.18 of the
Interwave Disclosure Schedule or waive, delay the exercise of, release or assign
any material rights or claims thereunder;
(o) Except as required by GAAP, revalue any of its assets (including,
without limitation, writing down the value of capitalized inventory or writing
off notes or accounts receivable) or make any material change in accounting
methods, principles or practices;
(p) Hire any employee with an annual compensation level in excess of
$100,000; (ii) terminate employees if such terminations would result in more
than a 10% reduction in the research and development department or the sales and
marketing department; or (iii) increase the number of its employees;
(q) Other than (i) fees and expenses up to $250,000 payable to
Broadview pursuant to the engagement letter referred to in Section 2.16 upon the
delivery of a fairness opinion by Broadview in connection with the Amalgamation
and (ii) fees and expenses payable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in an
amount to up to $125,000 per month (other than fees and expenses in connection
with the Amalgamation, which may be paid when due), make any individual or
series of related payments outside of the ordinary course of business in excess
of $100,000 in the aggregate;
(r) Other than in the ordinary course of business, enter into any
Contract or series of related Contracts requiring Interwave or any of its
Subsidiaries to pay in excess of $100,000 over the term of such Contract or
series of Contracts;
(s) Make any Tax election inconsistent with past practice, agree to
pay, settle or compromise any material Tax liability or consent to any extension
or waiver of any limitation period with respect to Taxes, or request, negotiate
or agree to any Tax rulings; or
(t) Agree in writing or otherwise to take any of the actions described
in Section 4.1(a) through (s) above.
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Regulatory Publications and Filings; Preparation of Certificate of
Amalgamation. Each party to this Agreement shall use all reasonable efforts to
deliver and file, as promptly as practicable after the date of this Agreement,
each notice, report or other document required to be delivered by such party to,
or filed by such party with, any Governmental Entity with respect to the
Amalgamation and the transactions contemplated by this Agreement. Without
limiting the generality of the foregoing:
(a) Not more than three months prior to the Closing Date, Interwave
and Alvarion shall prepare a public statement regarding Interwave and Merger
Sub's intention to amalgamate and continue as a foreign corporation (as defined
in Section 104A of the Bermuda Act), which statement will be published by
Interwave in an appointed newspaper in Bermuda, and by Merger Sub in a national
newspaper in the United States.
(b) On or prior to the Closing Date, Interwave and Alvarion will
prepare, and Interwave will file with the Registrar of Companies in Bermuda, a
Notice of Amalgamation (the "Bermuda Amalgamation Notice"), which shall include
the following information and will have attached to it the following documents:
(i) The Effective Time of the Amalgamation;
(ii) The jurisdiction of the Amalgamated Company and the address
of its registered office or principal address in such jurisdiction;
(iii) A copy of a statutory declaration by a director or officer
of Interwave to the effect that there are reasonable grounds for believing that
(x) Interwave is, and the Amalgamated Company will be, able to pay its
liabilities as they fall due; (y) the realizable value of the Amalgamated
Company's assets will not be less than the aggregate of its liabilities and
issued share capital and share premium accounts; and (z) no creditor of
Interwave will be prejudiced by the Amalgamation; and
(iv) A copy of an irrevocable deed poll executed by Interwave and
its directors pursuant to which Interwave and each of its directors may be
served with legal process at address set forth in Section 8.2, and Interwave and
such directors submit to the non-exclusive jurisdiction of the applicable courts
in the above mentioned address.
(c) As promptly as reasonably practicable after the execution of the
Agreement, Interwave shall prepare and file the proxy statement to be sent to
the shareholders of Interwave in connection with the Interwave General Meeting
(such proxy statement, as amended or supplemented, being referred to herein as
the "Proxy Statement") with the SEC under the Exchange Act. Alvarion shall
provide promptly to Interwave such information concerning itself as, in the
reasonable judgment of Interwave or its counsel, may be required or appropriate
for inclusion in the
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Proxy Statement, or in any amendments or supplements thereto. Interwave shall
respond to any comments of the SEC, and shall use its reasonable best efforts to
have Proxy Statement cleared by the SEC as promptly as practicable after such
filing, and Interwave shall cause the Proxy Statement to be mailed to its
shareholders at the earliest reasonably practicable time after the Proxy
Statement is cleared by the SEC. Interwave shall notify Alvarion promptly upon
the receipt of any written comments from the SEC or its staff and of any written
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and shall supply Alvarion with copies of
all correspondence between Interwave or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement. Interwave shall give Alvarion and its counsel the opportunity to
review and approve the Proxy Statement, including all amendments and supplements
thereto (provided that Alvarion's approval right hereunder shall not extend to
disclosures related Interwave's board process related to the transaction,
including but not limited to the recommendation of Interwave's Board of
Directors, any changes in such recommendation, the reasons for the transaction
or the opinion of Interwave's financial advisor) prior to its being filed with
the SEC and shall give Alvarion and its counsel the opportunity to review and
comment on all responses to requests for additional information and replies to
comments prior to their being filed with, or sent to, the SEC. Interwave shall
cause the Proxy Statement to comply in all material respects with all applicable
Legal Requirements. Whenever any event occurs which is required to be set forth
in an amendment or supplement to the Proxy Statement, Interwave shall promptly
inform Alvarion of such occurrence and file with the SEC or its staff and/or
mail to shareholders of Interwave, such amendment or supplement
(d) As promptly as practicable after the execution and delivery of
this Agreement, Merger Sub will file a copy of the Certificate of
Merger/Amalgamation with the Delaware Secretary of State to obtain pre-approval
of such certificate.
(e) As soon as may be reasonably practicable, Interwave and Alvarion
each shall file with the United States Federal Trade Commission (the "FTC") and
the Antitrust Division of the United States Department of Justice ("DOJ")
Notification and Report Forms relating to the transactions contemplated herein
as required by the HSR Act, as well as any additional pre-merger notification
forms required by control laws and regulations of any applicable jurisdiction,
as reasonably agreed by the parties to be required. Interwave and Alvarion each
shall promptly: (i) supply the other with any information which may be required
in order to effectuate such filings; and (ii) supply any additional information
which reasonably may be required by the FTC, the DOJ or the competition or
merger control authorities of any other jurisdiction and which the parties may
reasonably deem appropriate; provided, however, that neither Alvarion nor
Interwave shall be required to agree to any divestiture by itself or any of its
subsidiaries or affiliates of shares of capital stock or of any material
business, assets or property, or the imposition of any material limitation on
the ability of any of them to conduct their businesses or to own or exercise
control of such assets, properties and stock.
(f) Without derogating from the provisions of Sections 5.6, Interwave
and Alvarion shall cause their respective counsels, advisors and accountants to
coordinate all activities, and to cooperate with each other, with respect to the
preparation and filing of any documents required to be filed or published
pursuant to this Section 5.1. The parties further agree to comply at
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all times with all the procedures detailed in the Bermuda Act and to take all
necessary actions in order to minimize the duration of such procedures.
5.2 Approval of Stockholders of Interwave.
(a) As promptly as practicable after the execution and delivery of
this Agreement and in accordance with the Bermuda Act and the IInterwave Charter
Documents, Interwave shall convene the Interwave General Meeting of its
shareholders for the purpose of approval of the terms and conditions of this
Agreement, the Amalgamation and the transactions contemplated hereby. Unless the
Board of Directors of Interwave shall have withheld, withdrawn, amended,
modified or changed its recommendation of this Agreement, the Amalgamation and
the transactions contemplated thereby in compliance with Section 5.2(d) hereof,
Interwave shall use all commercially reasonable efforts to solicit from its
shareholders proxies in favor of the approval of such matters and to secure the
vote or consent of holders of more than 50% of Interwave's outstanding share
capital and of three-fourths of the votes cast at the Interwave General Meeting.
Notwithstanding anything to the contrary contained in this Agreement, Interwave
may adjourn or postpone the Interwave General Meeting to the extent necessary to
ensure that any necessary supplement or amendment to the Proxy Statement is
provided to Interwave's shareholders in advance of a vote on this Agreement, the
Amalgamation and the transactions contemplated hereby or, if as of the time for
which the Interwave General Meeting is originally scheduled (as set forth in the
Proxy Statement) there are insufficient Shares represented (either in person or
by proxy) to constitute a quorum necessary to conduct the business of the
Interwave General Meeting.
(b) Interwave shall call, give notice of, convene, hold, conduct and
solicit all proxies in connection with, the Interwave General Meeting in
compliance with all applicable Legal Requirements, including the Bermuda Act,
the Interwave Charter Documents, and the rules of Nasdaq.
(c) Unless the Board of Directors of Interwave shall have withheld,
withdrawn, amended, modified or changed its recommendation of this Agreement,
the Amalgamation and the transactions contemplated thereby in compliance with
Section 5.2(d) hereof: (i) the Board of Directors of Interwave shall recommend
that Interwave's shareholders entitled to vote in respect thereof, vote in favor
of and approve this Agreement, the Amalgamation and the transactions
contemplated by this Agreement at the Interwave General Meeting; and (ii)
neither the Board of Directors of Interwave nor any committee thereof shall
withhold, withdraw, amend, modify, change or publicly propose or publicly
resolve to withhold, withdraw, amend, modify or change, in each case in a manner
adverse to Alvarion, the recommendation of the Board of Directors of Interwave
that Interwave's shareholders vote in favor of and approve this Agreement, the
Amalgamation and the transactions contemplated by this Agreement.
(d) Nothing in this Agreement shall prevent the Board of Directors of
Interwave from withholding, withdrawing, amending, modifying or changing its
recommendation in favor of the approval of this Agreement and the Amalgamation
if: (i) a Superior Proposal (as defined below) is made to Interwave and is not
withdrawn; (ii) neither Interwave nor any of its representatives shall have
violated the terms of Section 5.5 hereof in any material respect in connection
with such Superior Proposal; (iii) the Board of Directors of Interwave concludes
in good faith, after
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consultation with its outside counsel, that, in light of such Superior Proposal,
the failure to withhold, withdraw, amend, modify or change such recommendation
would be inconsistent with the fiduciary obligations of the Board of Directors
of Interwave to Interwave or to Interwave's shareholders; (iv) this Agreement,
the Amalgamation and the transactions contemplated hereby have not yet been
approved by Interwave's shareholders at the Interwave General Meeting; and (v)
concurrently with any such withholding, withdrawal, amendment, modification or
changing of such recommendation, Interwave shall have terminated this Agreement
pursuant to and in accordance with Section 7.1(i) hereof and entered into an
Alternative Agreement.
5.3 Merger Sub General Meeting. As promptly as practicable after the
execution and delivery of this Agreement, Merger Sub shall hold its general
meeting, and Alvarion (as the sole shareholder of Merger Sub) shall approve this
Agreement, the Amalgamation and the transactions contemplated by this Agreement
at such general meeting.
5.4 Confidentiality; Access to Information. The parties acknowledge that
Interwave and Alvarion have previously executed a Confidentiality Agreement,
dated as of January 14, 2004 (the "Confidentiality Agreement"), which
Confidentiality Agreement will continue in full force and effect in accordance
with its terms. Interwave will afford Alvarion and its accountants, counsel and
other representatives reasonable access during normal business hours, upon
reasonable notice, to the properties, books, records and personnel of Interwave
during the period prior to the Effective Time to obtain all information
concerning its business, including, without limitation, the status of product
development efforts, properties, results of operations and personnel of
Interwave, as Alvarion may reasonably request. No information or knowledge
obtained by Alvarion in any investigation pursuant to this Section 5.4 will
affect or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the parties to consummate the Amalgamation.
5.5 No Solicitation.
(a) From and after the date of this Agreement until the earlier to
occur of the Effective Time or termination of this Agreement pursuant to Article
VII, Interwave and its Subsidiaries will not, nor will they authorize or permit,
to the extent within its control, any of their respective officers, directors,
controlled affiliates or employees or any of their respective investment
bankers, attorneys or other advisors or representatives retained by them to,
directly or indirectly: (i) solicit, initiate, or take an action intended to
encourage or induce the making, submission or announcement of any Acquisition
Proposal (as defined below); (ii) engage or participate in any discussions or
negotiations with any person (other than any officer, director, controlled
affiliate or employee of Alvarion or any of its subsidiaries or any investment
banker, attorney or other advisor or representative of Alvarion or any of its
subsidiaries) regarding, or furnish to any person any non-public information
with respect to, or take any other action intended to facilitate any inquiries
or the making of any proposal that constitutes or may reasonably be expected to
lead to, any Acquisition Proposal; (iii) approve, endorse or recommend any
Acquisition Proposal; or (iv) enter into any letter of intent or similar
document or any contract, agreement or commitment contemplating or otherwise
relating to any Acquisition Transaction (as defined below). Notwithstanding the
above, prior to the approval of this Agreement, the Amalgamation and the
transactions contemplated hereby by Interwave's shareholders at the Interwave
General Meeting, nothing contained in this Agreement (including, without
limitation, this Section 5.5) shall prohibit the Board of Directors of Interwave
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from (i) complying with Rule 14d-9 or Rule 14e-2(a) under the Exchange Act with
regard to a tender or exchange offer or (ii) in response to an unsolicited
Acquisition Proposal that is not withdrawn in writing, from engaging or
participating in discussions or negotiations with and furnishing information to
the party making such Acquisition Proposal, provided that the Board of Directors
of Interwave: (A) reasonably and in good faith concludes that the Acquisition
Proposal constitutes a Superior Proposal (as defined below) (or that is
reasonably likely to constitute, taking into account all of the relevant facts
and circumstances, a Superior Proposal) and in good faith believes that the
offer is likely to be consummated under the terms stated in such Superior
Proposal, and (B) determines in good faith after consultation with its outside
legal counsel that failure to take such action would be inconsistent with the
fiduciary obligations of the Board of Directors of Interwave to Interwave or to
Interwave's shareholders; and provided further that (x) concurrently with
furnishing any such information to, or entering into discussions or negotiations
with, such party, Interwave gives Alvarion written notice of the identity of
such person or group (unless prohibited by a confidentiality or non-disclosure
agreement entered into prior to the date hereof which cannot be canceled
promptly after the date of the Agreement) and of Interwave's intention to
furnish information to, or enter into discussions or negotiations with, such
party and (y) Interwave receives from such party an executed confidentiality
agreement at least as restrictive as the Confidentiality Agreement; and (z)
contemporaneously with furnishing any such information to such party, Interwave
furnishes such information to Alvarion (to the extent such information has not
been previously furnished by Interwave to Alvarion). Interwave and its
subsidiaries will immediately cease any and all existing discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal.
(b) For purposes of this Agreement: (i) "Acquisition Proposal" shall
mean any offer or proposal (other than an offer or proposal by Alvarion or
Merger Sub or any of their affiliates) relating to any Acquisition Transaction;
(ii) "Acquisition Transaction" shall mean any transaction or series of related
transactions other than the transactions contemplated by this Agreement
involving: (A) any acquisition or purchase from Interwave by any person or
"group" (as defined in Section 13(d) of the Exchange Act and the rules and
regulations thereunder) of more than a 20% interest in the total outstanding
voting securities of Interwave or any of its Subsidiaries or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined in Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning 20% or more of the total outstanding voting
securities of Interwave or any of its Subsidiaries or any merger, consolidation,
business combination or similar transaction involving Interwave pursuant to
which the shareholders of Interwave immediately preceding such transaction hold
less than 80% of the equity interests in the surviving or resulting entity of
such transaction; (B) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than 50% of the assets of
Interwave; or (C) any liquidation, dissolution, recapitalization or other
significant corporate reorganization of Interwave; and (iii) "Superior Proposal"
shall mean any unsolicited, written Acquisition Proposal received or made in
compliance with Section 5.5(a) believed by Interwave's Board of Directors to be
bona fide which: (A) if any cash consideration is involved, is not subject to
any financing contingency or, if subject to a financing contingency, such
financing in the reasonable judgment of Interwave's Board of Directors is likely
to be obtained on a timely basis; and (B) Interwave's Board of Directors shall
have reasonably and in good faith determined that the proposed Acquisition
Transaction is more
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favorable to the shareholders of Interwave, from a financial point of view, than
the Transaction (taking into account the advice of Interwave's financial
advisors).
In addition to the obligations of Interwave set forth in Section 5.5(a),
Interwave shall, as promptly as practicable and in any event within two business
days, advise Alvarion in writing of: (i) any request for non-public information
in connection with, or which Interwave reasonably concludes would lead to, any
Acquisition Proposal; (ii) the receipt of any Acquisition Proposal, or any
inquiry with respect to or which Interwave reasonably concludes would lead to
any Acquisition Proposal; (iii) the material terms and conditions of such
request, Acquisition Proposal or inquiry; and (iv) the identity of the person or
group making any such request, Acquisition Proposal or inquiry (unless
prohibited by a confidentiality or non-disclosure agreement entered into prior
to the date hereof which cannot be canceled promptly after the date of the
Agreement). Interwave shall keep Alvarion informed in all material respects of
the status and details (including material amendments or proposed amendments) of
any such request, Acquisition Proposal or inquiry. In addition to the foregoing,
Interwave shall: (i) provide Alvarion with at least 48 hours prior written
notice (or such lesser prior notice as provided to the members of Interwave's
Board of Directors) of any meeting of Interwave's Board of Directors at which
Interwave's Board of Directors is reasonably expected to recommend a Superior
Proposal to its shareholders and together with such notice a copy of the
definitive documentation relating to such Superior Proposal and shall not
resolve to recommend such Superior Proposal without having notified Alvarion at
least 48 hours prior to such recommendation. Nothing in this Section 5.5 shall
prevent Interwave from sending a written notice to any party with whom Interwave
has entered into a non-disclosure agreement and informing such party that the
non-disclosure agreeement is terminated by such notice and that any further
communications between the party and Interwave or any of its Subsidiaries would
not be covered by the non-disclosure agreement.
5.6 Public Disclosure. Alvarion and Interwave will consult with each other
and, to the extent practicable, agree, before issuing any press release or
otherwise making any public statement with respect to the transactions
contemplated by this Agreement as to the content of such press release or public
statement and will 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 a national securities exchange or Nasdaq, in which case
reasonable efforts to consult with the other party will be made prior to any
such release or public statement.
5.7 Commercially Reasonable Efforts. Subject to the terms and conditions
set forth in this Agreement, each of the parties shall use all commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things reasonably necessary, proper or advisable to consummate and make
effective, in the most expeditious manner reasonably practicable, the
Amalgamation and the other transactions contemplated by this Agreement,
including using commercially reasonable efforts to accomplish the following: (i)
causing the conditions precedent set forth in Article VI to be satisfied; (ii)
the obtaining of all necessary actions or nonactions, waivers, consents,
approvals, rulings, exemptions, orders and authorizations from Governmental
Entities and the making of all necessary registrations, declarations and filings
(including registrations, declarations and filings with Governmental Entities,
if any) and the taking of all commercially reasonable steps as may be necessary
to avoid any suit, claim, action, investigation or proceeding by any
Governmental Entity; (iii) the execution or delivery
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of any additional instruments reasonably necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement. In connection with and without limiting the foregoing, Interwave,
Alvarion and their respective Boards of Directors shall, if any state takeover
statute or similar statute or regulation is or becomes applicable to the
Amalgamation, this Agreement or any of the transactions contemplated by this
Agreement, use all commercially reasonable efforts to ensure that the
Amalgamation and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Amalgamation, this Agreement and the transactions contemplated hereby.
Notwithstanding anything to the contrary contained in this Agreement (except as
otherwise set forth in this sentence), neither Alvarion nor Interwave shall have
any obligation under this Agreement: (i) to dispose or transfer or cause any of
its subsidiaries to dispose of or transfer any material assets, or to commit to
cause Interwave to dispose of any material assets; (ii) to discontinue or cause
any of its subsidiaries to discontinue offering any material product or service,
or to commit to cause Interwave to discontinue offering any material product or
service; (iii) to license or otherwise make available, or cause any of its
subsidiaries to license or otherwise make available, to any person, any material
technology, software or other proprietary asset, or to commit to cause Interwave
to license or otherwise make available to any Person any material technology,
software or other proprietary asset; (iv) to hold separate or cause any of its
subsidiaries to hold separate any material assets or operations (either before
or after the Closing Date), or to commit to cause Interwave to hold separate any
material assets or operations; (v) subject to Section 5.5 hereof, to make or
cause any of its subsidiaries to make any commitment (to any Governmental Entity
or otherwise) regarding its future operations or the future operations of
Interwave or that would affect its discretion in determining the terms of any
Contract or relationship with any person or entity; or (vi) to contest or defend
against any suits, claims, actions, investigations or proceedings, whether
judicial or administrative, challenging this Agreement or the consummation of
the transactions contemplated hereby except, in the case of any action described
in clauses (i) through (vi) of this sentence, where such action would not, in
Alvarion's sole good faith judgment, be reasonably expected to be materially
burdensome to Alvarion, Interwave and their subsidiaries taken as a whole, or,
in the case of any action described in clause (vi) of this sentence, if
Interwave determines in good faith that contesting the legal proceeding would
not be advisable. The Chief Executive Officer of Interwave shall use reasonable
best efforts to contact Interwave's significant shareholders and encourage them
to vote in favor of the Amalgamation.
5.8 Third Party Consents. As soon as practicable following the date hereof,
Interwave, with commercially reasonable assistance from Alvarion, but without
any requirement that Interwave expend more than a nominal sum of money, will
obtain any consents, waivers and approvals under any of its or its Subsidiaries'
respective Contracts required to be obtained in connection with the consummation
of the transactions contemplated hereby, including those Contracts set forth or
required to be set forth on Section 2.5(a) of the Interwave Disclosure Schedule.
5.9 Share Options and Employee Benefits.
(a) Interwave Share Options. Each outstanding option to purchase
Interwave Shares (each, an "Interwave Share Option"), whether vested or
unvested, will be treated in accordance with terms of the Option Plans and
applicable agreements. In the event Alvarion elects to assume Interwave Share
Options, each outstanding option to purchase Interwave Shares (each, an
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"Interwave Share Option") will by virtue of the Amalgamation be assumed by
Alvarion. Each Interwave Share Option so assumed by Alvarion under this
Agreement will continue to have, and be subject to, the same terms and
conditions of such options immediately prior to the Effective Time (including,
without limitation, any repurchase rights or vesting provisions), except that
(i) each Interwave Share Option will be exercisable (or will become exercisable
in accordance with its terms) for that number of whole Alvarion Ordinary Shares
equal to the product (rounded down to the nearest whole number of Alvarion
Ordinary Shares) of the number of shares of Interwave Shares that were issuable
upon exercise of such Interwave Share Option immediately prior to the Effective
Time multiplied by the Option Exchange Ratio, (ii) the per share exercise price
for the Alvarion Ordinary Shares issuable upon exercise of such assumed
Interwave Share Option will be equal to the quotient (rounded up to the nearest
whole cent) determined by dividing the exercise price per Interwave Share at
which such Interwave Share Option was exercisable immediately prior to the
Effective Time by the Option Exchange Ratio, rounded up to the nearest whole
cent; and (iii) effective upon the Closing, 25% of the unvested portion of any
shares at such time subject to an Interwave Share Option (the "Acceleration
Shares") shall accelerate and the remaining unvested shares shall continue to
vest according to the original vesting schedule (which, for the avoidance of
doubt, shall be shortened by the period during which the Acceleration Shares
would otherwise have vested). (For the avoidance of doubt, if an Interwave Share
Option were outstanding to purchase 100 Interwave Shares that were to vest over
a 4 year period and 2 years of vesting had already occurred, the vesting on 12.5
shares would accelerate upon the Closing and the remaining 37.5 unvested shares
would vest over a 1.5 year period). It is the intention of the parties that the
Interwave Share Options so assumed by Alvarion hereunder qualify, to the maximum
extent permissible, following the Effective Time as "incentive stock options" as
defined in Section 422 of the Code to the extent such options qualified as
incentive stock options prior to the Effective Time. For these purposes, "Option
Exchange Ratio" means the quotient obtained by dividing (A) the Per Share
Consideration by (B) the Alvarion Share Price. For these purposes, "Alvarion
Share Price" means the average closing price of Alvarion Ordinary Shares on The
Nasdaq National Market over the five trading days up to and including the second
trading day preceding the Closing. In the event that Alvarion at any time
between the date of this Agreement and the Effective Time declares or pays any
dividend on Alvarion Ordinary Shares payable in Alvarion Ordinary Shares or in
any right to acquire Alvarion Ordinary Shares, or effects a subdivision of the
outstanding Alvarion Ordinary Shares into a greater number of Alvarion Ordinary
Shares (by stock dividends, combinations, splits, recapitalizations and the
like), or in the event the outstanding Alvarion Ordinary Shares will be combined
or consolidated, by reclassification or otherwise, into a lesser number of
Alvarion Ordinary Shares, which dividend, subdivision or other action would
become effective during the five trading days during which the Alvarion Share
Price is calculated, then the Alvarion Share Price will be appropriately
adjusted.
(b) ESPP. The rights of participants in the ESPP with respect to any
offering then underway under the ESPP will be determined by treating a date
prior to the Effective Time as determined by Interwave's Board of Directors as
the last day of such offering and by making such other pro rata adjustments as
may be necessary to reflect the shortened offering but otherwise treating such
shortened offering as a fully effective and completed offering for all purposes
under the ESPP. Outstanding rights to purchase Interwave Shares will be
exercised in accordance with the ESPP, and each Interwave Share purchased
pursuant to such exercise will by virtue of the Merger, and without any action
on the part of the holder thereof, be converted into the right to receive the
Per
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Share Consideration, without issuance of certificates representing issued and
outstanding Interwave Shares to participants under the ESPP. As of the Effective
Time, the ESPP will be terminated. Alvarion agrees that from and after the
Effective Time, employees of the Amalgamated Company may participate in
Alvarion's employee stock purchase plan, if any, subject to the terms and
conditions of such plan.
(c) 401(k) Plan. Interwave shall terminate, effective as of the day
immediately preceding the Effective Time, any and all Interwave Employee Plans
intended to include a Code Section 401(k) arrangement (the "401(k) Plans")
unless Alvarion provides notice to Interwave at least ten (10) business days
prior to the Effective Time that such 401(k) Plan(s) should not be terminated.
Prior to the Closing Date, Alvarion shall receive from Interwave evidence that
the 401(k) Plans have been terminated pursuant to resolutions of each such
entity's Board of Directors (the form and substance of such resolutions shall be
subject to review and approval of Alvarion), effective as of the day immediately
preceding the Effective Time.
(d) U.S. Employee Benefit Plan Participation. At and for one year
after the Effective Time, Alvarion and/or any of Alvarion's subsidiaries shall
arrange for each employee who resides in the United States of America and was
participating in any of the Interwave Employee Plans immediately before the
Effective Time, to participate in any counterpart benefit plans in the United
States of America in which employees of Alvarion participate (the "U.S.
Counterpart Plans"), in accordance with the eligibility criteria thereof,
provided that: (i) such participants shall receive full credit for years of
service with any one or more of Interwave, any Subsidiary and prior employers to
the extent such service is taken into account under such Interwave Employee
Plans and to the extent such service credit does not result in the duplication
of benefits and (ii) such participants shall participate in the U.S. Counterpart
Plans on terms no less favorable than those offered by Alvarion to its similarly
situated employees; provided that Interwave or the applicable employee timely
provides Alvarion and/or its Subsidiaries with the information necessary to
comply with this provision, Alvarion and/or its subsidiaries shall give credit
under those of its U.S. Counterpart Plans that are welfare benefit plans for all
amounts credited toward deductibles and out-of-pocket maximums, and time accrued
against applicable waiting periods, by employees (in each case including their
eligible dependents) of Interwave and its subsidiaries, in respect of the
applicable plan year in which the Effective Time occurs. With respect to its
medical plans, Alvarion and/or its subsidiaries shall waive all requirements for
evidence of insurability and pre-existing conditions otherwise applicable to
employees of Interwave or any of its Subsidiaries under the U.S. Counterpart
Plans in which employees of Interwave and its Subsidiaries become eligible to
participate on or following the Effective Time (to the extent that such
conditions were covered under the Interwave Employee Plans immediately prior to
the Effective Time). Notwithstanding the foregoing, Alvarion or any of its
subsidiaries may continue one or more of the Interwave Employee Plans, in which
case Alvarion and its subsidiaries shall have satisfied their obligations
hereunder with respect to the benefits so provided. Nothing in this Section
5.9(d) shall be construed to entitle any employee to continue his or her
employment for any period of time or prevent Alvarion from amending any of the
U.S. Counterpart Plans or Interwave employee benefit plans at any time;
provided, however, that no such amendment shall be made or given effect within
one year after the Effective Time to the extent that such amendment would result
in persons employed with Interwave or any of its Subsidiaries immediately before
the Effective Time having benefits, in the aggregate, that are less favorable
than the benefits provided to similarly-situated employees of Alvarion.
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(e) Continuing Employees. Following the execution of this Agreement,
Alvarion shall offer certain employees and consultants of Interwave,
compensation packages on terms no less favorable than those offered by Alvarion
to its similarly situated employees, as shall be determined by Alvarion which
packages will include the grant to such employees and consultants of options to
purchase Ordinary Shares of Alvarion. Alvarion shall offer the employees set
forth on Schedule 5.9(e) employment packages that include the terms set forth
opposite each such employee's name on Schedule 5.9(e).
(f) S-8/F-8. In the event Alvarion elects to assume the Interwave
Stock Options, Alvarion agrees to file a registration statement on Form S-8/F-8
for the Alvarion Ordinary Shares issuable with respect to Interwave Share
Options as soon as reasonably practicable after the Effective Time and in any
event within ten (10) business days following the Effective Time to the extent
the shares issuable under such assumed Interwave Share Options qualify for
registration on Form S-8/F-8.
5.10 Interwave Warrants. At the Effective Time, each outstanding Interwave
Warrant, whether or not exercisable, will be assumed by Alvarion. Each Interwave
Warrant so assumed by Alvarion under this Agreement will continue to have, and
be subject to, the same terms and conditions set forth in the applicable
Interwave Warrant immediately prior to the Effective Time, except that each
Interwave Warrant will be exercisable (or will become exercisable in accordance
with its terms) for that number of whole Alvarion Ordinary Shares equal to the
product of the number of Interwave Shares that were issuable upon exercise of
such Interwave Warrant immediately prior to the Effective Time multiplied by the
Option Exchange Ratio, rounded to the nearest whole number of Alvarion Ordinary
Shares, and (ii) the per share exercise price for the Alvarion Ordinary Shares
issuable upon exercise of such assumed Interwave Warrant will be equal to the
quotient determined by dividing the exercise price per Interwave Share at which
such Interwave Warrant was exercisable immediately prior to the Effective Time
by the Option Exchange Ratio, rounded to the nearest whole cent. As soon as
reasonably practicable after the Effective Time, Alvarion will issue to each
holder of an outstanding Interwave Warrant a notice describing the foregoing
assumptions of such Interwave Warrant by Alvarion. Alvarion shall take all
corporate actions necessary to reserve for issuance a sufficient number of
Alvarion Ordinary Shares for delivery upon exercise of all Interwave Warrants
pursuant to the terms set forth in this Section 5.10. In the event that Alvarion
at any time between the date of this Agreement and the Effective Time declares
or pays any dividend on Alvarion Ordinary Shares payable in Alvarion Ordinary
Shares or in any right to acquire Alvarion Ordinary Shares, or effects a
subdivision of the outstanding Alvarion Ordinary Shares into a greater number of
Alvarion Ordinary Shares (by stock dividends, combinations, splits,
recapitalizations and the like), or in the event the outstanding Alvarion
Ordinary Shares will be combined or consolidated, by reclassification or
otherwise, into a lesser number of Alvarion Ordinary Shares, which dividend,
subdivision or other action would become effective during the five trading days
during which the Alvarion Share Price is calculated, then the Alvarion Share
Price will be appropriately adjusted.
5.11 Notification.
(a) Interwave shall give prompt notice to Alvarion upon becoming aware
that any representation or warranty made by it contained in this Agreement has
become untrue or inaccurate,
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or of any failure of Interwave to comply with or satisfy in any material respect
any covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, in each case, such that the conditions set forth in
Section 6.2(a) or 6.2(b) would not be satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(b) Alvarion shall give prompt notice to Interwave upon becoming aware
that any representation or warranty made by it or Merger Sub contained in this
Agreement has become untrue or inaccurate, or of any failure of Alvarion or
Merger Sub to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement, in each case, such that the conditions set forth in Section 6.3(a) or
6.3(b) would not be satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement.
5.12 Indemnification.
(a) From and after the Effective Time, Alvarion will cause the
Amalgamated Company to fulfill and honor in all respects the obligations of
Interwave pursuant to any indemnification and exemption agreements in effect
immediately prior to the Effective Time between Interwave and its current and
former directors and officers (the "Indemnified Parties") and any
indemnification and exculpation provisions under the Interwave Charter Documents
as in effect on the date hereof. The Articles of Incorporation and other
governing documents of the Amalgamated Company will contain provisions with
respect to indemnification and exculpation that are at least as favorable to the
Indemnified Parties as those contained in the Interwave Charter Documents as in
effect on the date hereof, which provisions will not be amended, repealed or
otherwise modified for a period of six (6) years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who were
directors, officers, employees or agents of Interwave, unless such modification
is required by law.
(b) For a period of six (6) years after the Effective Time, Alvarion
will cause the Amalgamated Company to maintain in effect the current policies of
directors' and officers' liability insurance maintained by Interwave and its
Subsidiaries. Alvarion may substitute therefor policies of substantially similar
coverage containing terms and conditions that are not less advantageous in all
material respects to the Indemnified Parties; provided, however, that in no
event will Alvarion or the Amalgamated Company be required to expend an
aggregate amount in excess of US$790,000 for such coverage.
(c) The provisions of this Section 5.12 shall survive the consummation
of the transactions contemplated by this Agreement at the Effective Time and
continue for the periods specified in this Section 5.12 and are: (i) intended to
be for the benefit of, and will be enforceable by, each of the Indemnified
Parties and their respective heirs and representatives; and (ii) in addition to,
and not in substitution for, any other rights to indemnification or contribution
that any such person may have by contract or otherwise. In the event the
Amalgamated Company or any of its respective successors or assigns consolidates
or amalgamates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation,
amalgamation or
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merger, or transfers all or substantially all of its assets to any person in a
single transaction or series of related transactions, then, and in each such
case, Alvarion shall make or cause to be made proper provision so that the
successors and assigns of Interwave or the Amalgamated Company shall assume the
indemnification obligations set forth in this Section 5.12 for the benefit of
the Indemnified Parties.
5.13 Assignment of Agreements. As soon as reasonably practicable following
the execution of this Agreement, Interwave will use commercially reasonably
efforts to arrange for the execution, by all applicable third parties, of all
documents reasonably necessary for the assignment of the agreements that as of
the Effective Time are to be assumed by the Amalgamated Company. To the extent
that any Interwave Contract is not assignable to the Amalgamated Company without
the consent of another party, this Agreement and the Amalgamation shall not
constitute an assignment or an attempted assignment thereof if such assignment
or attempted assignment would constitute a breach thereof. Interwave and
Alvarion agree to use their reasonable commercial efforts (without any
requirement on the part of Alvarion to pay any money or agree to any material
change in the terms of any such Contract) to obtain the consent of such other
party to the assignment of any such Contract to the Amalgamated Company, in all
cases in which such consent is or may be required for such assignment. If any
such consent shall not be obtained, Interwave agrees to cooperate with Alvarion
in any reasonable arrangement designed to provide for Alvarion or the
Amalgamated Company the benefits intended to be assigned to Alvarion under the
relevant Contract. Notwithstanding the foregoing, the receipt of all consents
necessary to assign to Alvarion the Contracts that are indicated on Schedule
6.2(d) (where such consent is required), will be a condition to Alvarion's
obligation to effect the Closing.
5.14 Alvarion Guaranty of Merger Sub Obligations. Alvarion shall cause
Merger Sub to comply with all of its obligations under this Agreement and hereby
guarantees such performance.
5.15 Payment of Certain Accounts Payable and Closing Costs. Within five (5)
days following the Closing Date, Alvarion shall, to the extent not previously
paid by Interwave prior to the Closing Date, cause the Amalgamated Company to
pay in full (the "Accounts Payable Costs") all accounts payable of Interwave and
its Subsidiaries and all costs and expenses incurred by Interwave in connection
with this Agreement and the Amalgamation (including but not limited to all
banking, accounting, legal and printing fees and expenses) (the "Transaction
Costs"). The Accounts Payable Costs are set forth on Schedule 5.15. Schedule
5.15 sets forth Interwave's estimates of the Transaction Costs as of the date of
this Agreement and such Transaction Costs shall be updated by Interwave as of
immediately prior to the Closing Date. All such fees are due upon the Closing.
For the avoidance of doubt, all Transaction Costs and Accounts Payable set forth
on Schedule 5.15, as updated as of the Closing, are due at closing and shall be
paid in accordance in with this Section 5.15.
5.16 Bridge Loan. Alvarion will loan Interwave $3 million (the "Loan
Facility"). The $3 million of Loan Facility funds shall be delivered to an
account designated by Interwave by wire transfer initiated by Alvarion no later
than Wednesday, July 28, 2004, Tel Aviv time, for immediate transfer to such
designated account. Interwave will use the proceeds of the Loan Facility to fund
working capital requirements and operating activities. The Loan Facility will
bear interest at 6% per annum and will be secured by a third priority security
interest subordinate to Interwave's currently
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outstanding debt to financial institutions. Upon completion of the Amalgamation,
all principal and accrued interest outstanding under the Loan Facility will be
cancelled. In the event that the Amalgamation is not completed, or in the event
that this Agreement is terminated prior to completion of the Amalgamation, all
principal and accrued interest outstanding under the Loan Facility will be due
and payable on the earlier of (i) the lapse of six months following the grant of
the first loan by Alvarion to Interwave under the Loan Facility or (ii) 30 days
following completion of an Acquisition Transaction.
5.17 Corporate Authority. Contemporaneously with the Closing, Interwave
shall cause each officer of Interwave to surrender his authority over all
Interwave finances, including without limitation, all Interwave bank accounts,
and evidence of the foregoing (in form and substance reasonably satisfactory to
Alvarion). Contemporaneously with the Closing, Interwave also shall deliver to
Alvarion such documents as are necessary or advisable (in form and substance
reasonably satisfactory to Alvarion) to transfer authority over Interwave's
finances, including without limitation, all Interwave bank accounts, to Alvarion
and the Amalgamated Company.
ARTICLE VI
CONDITIONS TO THE AMALGAMATION
6.1 Conditions to Obligations of Each Party to Effect the Amalgamation. The
respective obligations of each party to this Agreement to effect the
Amalgamation shall be subject to the satisfaction at or prior to the Closing
Date of the following conditions, any of which may be waived, in writing, by
mutual agreement of Alvarion and Interwave:
(a) Approval of Shareholders of Interwave. This Agreement, the
Amalgamation and the transactions contemplated hereby shall have been approved
and adopted by the requisite vote of the shareholders of Interwave in accordance
with the Bermuda Act and the Interwave Charter Documents.
(b) No Order; Competition Laws. No Governmental Entity shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) after the date hereof which is in effect and which has
the effect of making the Amalgamation illegal or otherwise prohibiting
consummation of the Amalgamation. All waiting periods under the HSR Act shall
have expired or terminated. Any notification, waiting period, or approval
requirements under the comparable competition laws of the jurisdictions, where
the failure to satisfy such requirements would have a Material Adverse Effect on
Interwave or Alvarion, shall have been satisfied.
(c) Bermuda Governmental Approvals. All publications and filings
required under the Bermuda Act, including the publications and filings set forth
in Sections 5.1(a) and 5.1(b) shall have been performed, and all Bermuda
Governmental Entity approvals required pursuant to the Bermuda Act for the
consummation of the Amalgamation and the other transactions contemplated by this
Agreement shall have been obtained, except for such filings in connection with
Amalgamation that are required to be filed after the Effective Time.
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(d) Other Approvals. All other consents, authorizations, orders and
approvals or filings with any third party or Governmental Entity in connection
with the execution, delivery and consummation of this Agreement and the
Amalgamation, where the failure to obtain such consent or approval would have a
Material Adverse Effect on Interwave or Alvarion, shall have been obtained or
made.
(e) Proxy Statement. No order suspending the use of the Proxy
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened in writing by the SEC.
6.2 Additional Conditions to the Obligations of Alvarion and Merger Sub.
The obligations of Alvarion and Merger Sub to consummate and effect the
Amalgamation shall be subject to the satisfaction at or prior to the Closing
Date of each of the following conditions, any of which may be waived, in
writing, exclusively by Alvarion:
(a) Representations and Warranties. Each representation and warranty
of Interwave contained in this Agreement shall have been true and correct as of
the date of this Agreement and shall be true and correct on and as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date (other than those representations and warranties which address matters only
as of a particular date, which representations and warranties shall have been
true and correct as of such particular date) except in each case, or in the
aggregate, as would not reasonably be expected to constitute a Material Adverse
Effect on Interwave (provided, however, that such Material Adverse Effect
qualification shall be inapplicable with respect to the representations and
warranties contained in Sections 2.3(a), 2.19 and 2.21, which representations
and warranties shall be true and correct in all material respects as of the
applicable date, and with respect to the representations and warranties
contained in Section 2.7(c), shall be true and correct in all respects). For
purposes of determining the accuracy of such representations and warranties for
purposes of determining whether this condition has been satisfied: (A) all
"Material Adverse Effect" qualifications and other qualifications based on the
word "material" or similar phrases (other than specified Dollar thresholds)
contained in such representations and warranties shall be disregarded; and (B)
any update of or modification to the Interwave Disclosure Schedule made or
purported to have been made after the date of this Agreement shall be
disregarded. Alvarion shall have received a certificate with respect to the
foregoing signed on behalf of Interwave by the Chief Executive Officer and Chief
Financial Officer of Interwave.
(b) Agreements and Covenants. Interwave shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and Alvarion shall have received a certificate to such effect signed on
behalf of Interwave by the Chief Executive Officer and the Chief Financial
Officer of Interwave.
(c) Employment and Noncompetition Agreements. The Employment and
Noncompetition Agreements shall be in full force and effect at the Closing Date
and the officers listed in Schedule 6.2(c) shall have entered into new
employment agreements and/or consulting
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agreements and non-competition agreements with the Amalgamated Company, in
substantially the form set forth in Exhibit B.
(d) Consents. Alvarion shall have received duly executed copies of the
consents, waivers or approvals listed on Schedule 6.2(d) in substance reasonably
satisfactory to Alvarion.
6.3 Additional Conditions to the Obligations of Interwave. The obligation
of Interwave to consummate and effect the Amalgamation shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Interwave:
(a) Representations and Warranties. Each representation and warranty
of Alvarion and Merger Sub contained in this Agreement shall have been true and
correct as of the date of this Agreement and shall be true and correct on and as
of the Closing Date with the same force and effect as if made on and as of the
Closing Date (other than those representations and warranties which address
matters only as of a particular date, which representations and warranties shall
have been true and correct as of such particular date) except in each case, or
in the aggregate, as would not reasonably be expected to constitute a Material
Adverse Effect on Alvarion. For purposes of determining the accuracy of such
representations and warranties for purposes of determining whether this
condition has been satisfied: (A) all "Material Adverse Effect" qualifications
and other qualifications based on the word "material" or similar phrases (other
than dollar thresholds) contained in such representations and warranties shall
be disregarded; and (B) any update of or modification to the Alvarion Disclosure
Schedule made or purported to have been made after the date of this Agreement
shall be disregarded. Interwave shall have received a certificate with respect
to the foregoing signed on behalf of Alvarion by an authorized officer of
Alvarion.
(b) Agreements and Covenants. Alvarion and Merger Sub shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and Interwave shall have received a certificate to such
effect signed on behalf of Alvarion by an authorized officer of Alvarion.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after the requisite approval of the
shareholders of Interwave:
(a) by mutual written consent duly authorized by the Boards of
Directors of Alvarion and Interwave;
(b) by either Interwave or Alvarion, if the Amalgamation shall not
have been consummated by October 31, 2004 for any reason; provided, however,
that the right to terminate this Agreement under this Section 7.1(b) shall not
be available to any party whose action or failure to act
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has been a principal cause of or resulted in the failure of the Amalgamation to
occur on or before such date and such action or failure to act constitutes a
material breach of this Agreement.
(c) by either Interwave or Alvarion, if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action after the date
hereof, in any case having the effect of permanently restraining, enjoining or
otherwise prohibiting the Amalgamation, which order, decree, ruling or other
action shall have become final and nonappealable;
(d) by either Interwave or Alvarion, if the required approvals of the
shareholders of Interwave contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at the Interwave
General Meeting or at any adjournment or postponement thereof or by the holders
of a majority of the outstanding Interwave Shares and three-fourths of the votes
cast at the Interwave General Meeting; provided, however, that in such an event,
Interwave shall reimburse Alvarion, within five (5) business days of such
termination, for up to $500,000 of documented out-of-pocket expenses incurred by
Alvarion prior to such date with respect to this Agreement and the transactions
contemplated thereby; and provided further that in the event that Interwave
completes an Acquisition Transaction during the six month period following such
termination date or, in the case of an acquirer that had made an Acquisition
Proposal to Interwave's Board of Directors after the date hereof and prior to
the date of Interwave General Meeting, the 12 month period following such
termination date, then Interwave shall pay Alvarion, upon the closing of the
Alternative Agreement (as defined below) relating to the Acquisition Transaction
for which such Acquisition Proposal had been made, the Termination Fee, as
defined below. Any amounts paid by Interwave to Alvarion pursuant to its
reimbursement obligation in the preceding sentence will be deducted from the
amounts due to Alvarion as Termination Fee under this Section 7.1(d);
(e) by Interwave, upon a breach of any representation, warranty,
covenant or agreement on the part of Alvarion or Merger Sub set forth in this
Agreement, or if any representation or warranty of Alvarion or Merger Sub shall
have become untrue, in either case such that the conditions set forth in Section
6.3(a) or Section 6.3(b) would not be satisfied as of the time of such breach or
as of the time such representation or warranty shall have become untrue,
provided, that if such inaccuracy in Alvarion's or Merger Sub's representations
and warranties or breach by Alvarion or Merger Sub is curable by Alvarion or
Merger Sub through the exercise of its commercially reasonable efforts, then
Interwave may not terminate this Agreement under this Section 7.1(e) for thirty
(30) days after delivery of written notice from Interwave to Alvarion and Merger
Sub of such breach, provided Alvarion or Merger Sub, as applicable, continues to
exercise commercially reasonable efforts to cure such breach or inaccuracy (it
being understood that Interwave may not terminate this Agreement pursuant to
this paragraph (e) if such breach or inaccuracy by Alvarion or Merger Sub is
cured during such thirty (30)-day period;
(f) by Alvarion, upon a breach of any representation, warranty,
covenant or agreement on the part of Interwave set forth in this Agreement, or
if any representation or warranty of Interwave shall have become untrue, in
either case such that the conditions set forth in Section 6.2(a) or Section
6.2(b) would not be satisfied as of the time of such breach or as of the time
such representation or warranty shall have become untrue, provided, that if such
inaccuracy in Interwave's representations and warranties or breach by Interwave
is curable by Interwave through the exercise of its commercially reasonable
efforts, then Alvarion may not terminate this Agreement
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under this Section 7.1(f) for thirty (30) days after delivery of written notice
from Alvarion to Interwave of such breach, provided Interwave continues to
exercise commercially reasonable efforts to cure such breach or inaccuracy (it
being understood that Alvarion may not terminate this Agreement pursuant to this
paragraph (f) if such breach or inaccuracy by Interwave is cured during such
thirty (30)-day period);
(g) by Alvarion, if a Material Adverse Effect has occurred with
respect to Interwave and its Subsidiaries taken as a whole; provided, that if
such Material Adverse Effect is curable by Interwave or any of its Subsidiaries
through the exercise of its commercially reasonable efforts, then Alvarion may
not terminate this Agreement under this Section 7.1(g) for thirty (30) days
after delivery of written notice from Alvarion to Interwave of such Material
Adverse Effect, provided Interwave continues to exercise commercially reasonable
efforts to cure such Material Adverse Effect (it being understood that Alvarion
may not terminate this Agreement pursuant to this paragraph (g) if such Material
Adverse Effect is cured during such thirty (30)-day period);
(h) by Alvarion, if a Triggering Event (as defined below) shall have
occurred, in which event Interwave shall pay Alvarion, within three (3) business
days after demand by Alvarion, an amount equal to 5% of the total amount of
consideration payable pursuant to this Agreement as a termination fee (the
"Termination Fee"); or
(i) by Interwave, in order to enter into a binding definitive
agreement with a third party (an "Alternative Agreement"); provided such
Alternative Agreement provides for a Superior Proposal in accordance with the
provisions of Section 5.5 hereof; and provided that immediately prior to such
termination, and as a condition to such termination, (i) Interwave shall have
paid Alvarion the Termination Fee; (ii) Interwave shall have given Alvarion at
least three (3) business days prior written notice of its intention to enter
into an Alternative Agreement, which notice shall be accompanied by a correct
and complete copy of such Alternative Agreement (and Interwave shall thereafter
promptly provide Alvarion with correct and complete copies of any amendments or
proposed amendments thereto), and during such period shall give Alvarion the
opportunity to meet with Interwave to suggest such modifications to the terms
hereof that Alvarion may deem advisable; and (iii) concurrently with such
termination Interwave enters into such Alternative Agreement.
(j) For the purposes of this Agreement, a "Triggering Event" shall be
deemed to have occurred if: (i) the Board of Directors of Interwave or any
committee thereof shall for any reason have withdrawn or shall have amended or
modified in a manner materially adverse to Alvarion its recommendation in favor
of, the approval of this Agreement, the Amalgamation or the transactions
contemplated by this Agreement; (ii) Interwave shall have failed to include in
the Proxy Statement the recommendation of the Board of Directors of Interwave in
favor of the approval of this Agreement, the Amalgamation and the transactions
contemplated by this Agreement; (iii) the Board of Directors of Interwave or any
committee thereof shall have approved or publicly recommended any Acquisition
Proposal (other than a confidentiality agreement as permitted by Section 5.5);
(iv) the provisions of Section 5.5 of this Agreement shall have been materially
breached; (v) Interwave shall have entered into any letter of intent or similar
document or any agreement, contract or commitment accepting any Acquisition
Proposal; or (vi) a tender or exchange offer relating to securities of Interwave
shall have been commenced by a person unaffiliated with Alvarion and Interwave
shall not have sent to its security holders pursuant to Rule 14d-9 or 14e-2
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promulgated under the Exchange Act, within ten (10) business days after such
tender or exchange offer is first published, sent or given, a statement
disclosing that Interwave recommends rejection of such tender or exchange offer.
(k) Interwave acknowledges that the agreements contained in this
Section 7.1 with respect to the payment of the Termination Fee are an integral
part of the transactions contemplated by this Agreement, and that, without these
agreements, Alvarion would not enter into this Agreement; accordingly, if
Interwave fails to pay in a timely manner the amounts due pursuant to this
Section 7.1 and, in order to obtain such payment, Alvarion makes a claim that
results in a judgment against Interwave for the amounts set forth in this
Section 7.1, Interwave shall pay to Alvarion its reasonable costs and expenses
(including reasonable attorneys' fees and expenses) in connection with such
suit, together with interest on the amounts set forth in this Section 7.1 at the
prime rate of Bank of America N.T. & S.A. in effect on the date such payment was
required to be made. The Break-up fee shall be the exclusive remedy under this
Agreement except for willful, intentional or material breaches of a covenant in
this Agreement.
7.2 Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon (or, if the
termination is pursuant to Section 7.1(e), Section 7.1(f) or Section 7.1(g) and
the proviso therein is applicable, thirty (30) days after) the delivery of
written notice of the terminating party to the other parties hereto. In the
event of the termination of this Agreement as provided in Section 7.1, this
Agreement shall be of no further force or effect, except (i) as set forth in
Section 7.1, this Section 7.2, Section 7.3 and Article VIII (General
Provisions), each of which shall survive the termination of this Agreement, and
(ii) nothing herein shall relieve any party from liability for any intentional
or willful breach of this Agreement. No termination of this Agreement shall
affect the obligations of the parties contained in the Confidentiality
Agreement, all of which obligations shall survive termination of this Agreement
in accordance with their terms.
7.3 Fees and Expenses. Except as set forth in Section 7.1with respect to
the Termination Fee, all fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the Amalgamation is consummated.
7.4 Amendment. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Alvarion and Interwave.
7.5 Extension; Waiver. At any time prior to the Effective Time, any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations and Warranties. The representations and
warranties of Interwave, Alvarion and Merger Sub contained in this Agreement
shall terminate at the Effective Time. The covenants contained in this Agreement
that by their terms survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Alvarion or Merger Sub, to:
Alvarion Ltd.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇-▇▇▇▇▇▇▇
Attn: General Counsel
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇
Fax: ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Amir, Adv.
(b) if to Interwave, to:
Interwave Communications International Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
with a copy to:
Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: + ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
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8.3 Interpretation; Knowledge. (a) When a reference is made in this
Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement
unless otherwise indicated. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement. Unless
otherwise indicated the words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When reference is made herein to "the business
of" an entity, such reference shall be deemed to include the business of all
direct and indirect subsidiaries of such entity. Reference to the subsidiaries
of an entity shall be deemed to include all direct and indirect subsidiaries of
such entity.
(b) The word "agreement" when used herein shall be deemed in each case
to mean any contract, commitment or other agreement, whether oral or written,
which is legally binding.
(c) For purposes of this Agreement, (i) the term "person" shall mean
any individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity and (ii) the term "Subsidiary" means, with respect to any
person, any corporation or other legal entity of which such person owns,
directly or indirectly, more than fifty percent (50%) of the outstanding stock
or other equity interests.
(d) When used in connection with Alvarion, or Interwave, as the case
may be, the term "Material Adverse Effect" means any change, event, violation,
inaccuracy, circumstance or effect that, individually or when taken together
with all other such changes, events, violations, inaccuracies, circumstances or
effects that have occurred prior to the date of determination of the occurrence
of the Material Adverse Effect, is or is reasonably likely to be materially
adverse to the business, assets (including intangible assets), financial
condition or results of operations of such entity and its Subsidiaries, taken as
a whole; provided, however, that in no event shall any of the following, alone
or in combination, be deemed to constitute, nor shall any of the following be
taken into account in determining whether there has been or will be, a Material
Adverse Effect on any entity: (i) any change in such entity's stock price or
trading volume in and of itself (but not excluding the underlying cause of any
such change pursuant to this clause (i)); (ii) any change, event, violation,
inaccuracy, circumstance or effect that results from changes, events or
circumstances affecting (A) any of the industries in which such entity operates
generally, or (B) general economic conditions (which changes, events or
circumstances in the case of (A) and (B) do not disproportionately affect such
entity); (iii) any change, event, violation, inaccuracy, circumstance or effect
resulting from public announcement or pendency of this Agreement and the
Amalgamation, including any loss, diminution or disruption, whether actual or
threatened, of existing or prospective customer, distributor or supplier
relationships that results therefrom; (iv) any change, event, violation,
inaccuracy, circumstance or effect resulting from acts of war or terrorism or
any escalation thereof in and of itself (but excluding any changes or effect
uniquely on or uniquely with respect to Interwave resulting from any such act
pursuant to this clause (iv)); (v) any change, event, violation , inaccuracy,
circumstance or effect that results from any action or inaction taken by
Alvarion; or (vi)
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the institution of litigation against Interwave or any of its officers or
directors alleging breach of their fiduciary duties in connection with the entry
into this Agreement.
(e) The words "foreign" and "domestic" when used herein shall be
deemed a reference to a country outside the United States and the United States,
respectively.
(f) "Knowledge" of a party with respect to any fact or other matter in
question means the actual knowledge of any of the executive officers or
directors of such party or the knowledge that any of such executive officers
would be reasonably expected to have after making due and diligent inquiry of
those executive officers employed by such party who would reasonably be expected
to have actual knowledge of the fact or other matter in question.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts (including counterparts executed and delivered by facsimile, which
shall be as counterparts executed and delivered manually), all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood and agreed that all parties need not sign the
same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Confidentiality Agreement,
the Interwave Disclosure Schedule and the Alvarion Disclosure Schedule (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
it being understood that the Confidentiality Agreement shall continue in full
force and effect until the Closing and shall survive any termination of this
Agreement; and (b) are not intended to confer upon any other person any rights
or remedies hereunder, except as specifically provided in Section 5.12.
8.6 Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court
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of the United States or any state having jurisdiction, this being in addition to
any other remedy to which they are entitled at law or in equity.
8.8 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflict of law provisions. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction and venue of any court within the State
of New York, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of New York for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction, venue and such process.
8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
-56-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
Date: 27 July , 2004
Alvarion Ltd.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
Interwave Communications International Ltd.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President and Chief Financial Officer
Alvarion Mobile Inc.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------
▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
AMENDMENT NO. 1
OF THE
AGREEMENT AND PLAN OF AMALGAMATION
THIS AMENDMENT NO. 1 OF THE AGREEMENT AND PLAN OF AMALGAMATION (this
"Amendment"), amends the Agreement and Plan of Amalgamation by and among
ALVARION LTD., an Israeli company ("Alvarion"), ALVARION MOBILE INC., a Delaware
corporation and wholly owned subsidiary of Alvarion ("Merger Sub") and INTERWAVE
COMMUNICATIONS INTERNATIONAL LTD., a Bermuda company ("Interwave"), dated July
27, 2004 (the "Amalgamation Agreement"), and is entered into as of August 25,
2004. Capitalized terms not otherwise defined in this Amendment have the meaning
given them in the Amalgamation Agreement.
W I T N E S S E T H:
WHEREAS, Alvarion, Merger Sub and Interwave entered into that certain
Amalgamation Agreement relating to the amalgamation of Interwave with and into
Merger Sub;
WHEREAS, the parties hereto desire to amend the Amalgamation
Agreement, as set forth herein; and
WHEREAS, except for this Amendment, the parties to this Amendment
hereby agree that the Amalgamation Agreement shall continue in full force and
effect as originally executed and delivered.
NOW, THEREFORE, BE IT RESOLVED, in consideration of the agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
8.11 Alvarion, in its sole discretion and prior to the Effective Time,
shall have the right to substitute another entity in place of Alvarion Mobile
Inc. (a "Substituted Merger Sub"), provided, that, (i) such Substituted Merger
Sub is a Delaware corporation and wholly-owned by Alvarion, (ii) Alvarion
provides Interwave at least three (3) business days prior written notice of such
substitution; and (iii) no such substitution may be made at a point in time that
would under the Amalgamation Agreement materially delay the Closing. In the
event of such substitution, any reference in this Amendment or the Amalgamation
Agreement to "Merger Sub" shall refer to such Substituted Merger Sub. In the
event a Substituted Merger Sub is designated pursuant to this Section 1, such
Substituted Merger Sub shall execute the Amalgamation Agreement and this
Amendment, and shall become bound thereby and hereby to the same extent as if
such Substituted Merger Sub were the original Merger Sub thereunder and
hereunder.
8.12 Section 1.3(c) of the Amalgamation Agreement shall be amended and
restated in its entirety to read as follows:
"Non-exchanged Stock. Notwithstanding the provisions of Section
1.3(b), at the Effective Time, each Interwave Share that is owned by Merger
Sub, Alvarion or any direct or indirect wholly-owned subsidiary of
Interwave or of Alvarion immediately prior to the Effective Time, shall be
canceled, shall not be exchanged
2
under Section 1.3(b) and no Per Share Consideration shall be delivered with
respect thereto."
8.13 The following section shall be added as Section 1.9 to the
Amalgamation Agreement:
"1.9 Certificate of Incorporation and Bylaws of Amalgamated Company.
(a) Certificate of Incorporation. As of the Effective Time, by virtue
of the Amalgamation and without any action on the part of Merger Sub or
Interwave, the Memorandum of Association of Interwave will cease to have
effect and the Certificate of Incorporation of the Amalgamated Company
shall be the same as the Certificate of Incorporation of Merger Sub, as in
effect immediately prior to the Effective Time, subject to Section 5.12
hereof, until thereafter amended in accordance with the Delaware Code and
such Certificate of Incorporation.
(b) Bylaws. As of the Effective Time, by virtue of the Amalgamation
and without any action on the part of Merger Sub or Interwave, the Bye-laws
of Interwave will cease to have effect and the Bylaws of the Amalgamated
Company shall be the same as the Bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, subject to Section 5.12 hereof,
until thereafter amended in accordance with the Delaware Code, the
Certificate of Incorporation of the Amalgamated Company and such Bylaws."
8.14 The following section shall be added as Section 1.10 to the
Amalgamation Agreement:
"1.10 Directors of the Amalgamated Company. The initial directors of
the Amalgamated Company shall be the directors of Merger Sub as of
immediately prior to the Effective Time, until their respective successors
are duly elected or appointed and qualified. The names and addresses of the
persons who will be directors of the Amalgamated Company at the Effective
Time are as follows:
▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ 69710
▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
8.15 Section 5.10 of the Amalgamation Agreement shall be amended and
restated in its entirety to read as follows:
"Interwave Warrants. At the Effective Time, each outstanding Interwave
Warrant, whether or not exercisable, will be assumed by Alvarion, and will
continue to have, and be subject to, the same terms and conditions set
forth in the applicable warrant agreement. For the avoidance of doubt,
after the Effective Time, each outstanding Interwave Warrant will be
exercisable at the same exercise price per share as immediately prior to
the Effective Time, and upon exercise, the holder of such
3
Interwave Warrant will receive an amount of cash equal to the product of
the number of Interwave Shares that were issuable upon exercise of such
Interwave Warrant immediately prior to the Effective Time multiplied by the
Per Share Consideration."
8.16 The following paragraph shall be added immediately following the sole
paragraph in Section 5.9(a) of the Amalgamation Agreement:
"The foregoing notwithstanding, in the event Alvarion elects not to
assume the outstanding options to purchase Interwave Shares under
Interwave's 2001 Supplemental Stock Option Plan (the "2001 Plan"), each
Interwave Share Option outstanding under the 2001 Plan (each, a "2001
Option") will be terminated at the Effective Time; provided, however, that
effective as of 3 calendar days prior to the Effective Time, 25% of any
unvested portion of each 2001 Option shall be accelerated and shall become
vested. As soon as practicable following the Effective Time and in no event
later than 10 calendar days following the Effective Time, the Board of
Directors of Alvarion shall grant each of the holders of the 2001 Options
so terminated an option to purchase Alvarion Ordinary Shares under the
appropriate Alvarion stock option plan (as determined by Alvarion) (the
"Replacement Options"), provided, that, (i) each Replacement Option will be
exercisable (or will become exercisable in accordance with its terms) for
that number of whole Alvarion Ordinary Shares equal to the product (rounded
down to the nearest whole number of Alvarion Ordinary Shares) of the number
of Interwave Shares that were issuable upon exercise of the unvested
portion of such Interwave Share Option immediately prior to the Effective
Time (and after the 25% acceleration referenced above) multiplied by the
Option Exchange Ratio and (ii) the per share exercise price for each
Alvarion Ordinary Share issuable upon exercise of such Replacement Option
will be equal to the quotient (rounded up to the nearest whole cent)
determined by dividing the exercise price per Interwave Share at which such
Interwave Share Option was exercisable immediately prior to the Effective
Time by the Option Exchange Ratio, rounded up to the nearest whole cent.
The Replacement Options shall vest according to the vesting schedule of the
2001 Option being replaced (which, for the avoidance of doubt, shall be
shortened by the period during which the shares subject to the 25%
acceleration referenced above would otherwise have vested). For the
purposes of this Agreement, "Alvarion Ordinary Share" shall mean each
Ordinary Share, par value, New Israeli Shekels (NIS) 0.01 per share, in the
capital of Alvarion."
8.17 This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8.18 This Amendment, when executed by the parties hereto as of the date
hereof, shall be binding upon each such party.
8.19 This Amendment shall be governed by and construed in accordance with
the laws of the State of New York without reference to such state's principles
of conflicts of law.
8.20 To the extent not inconsistent with this Amendment, the Amalgamation
Agreement remains in full force and effect as originally executed and delivered.
4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized officers as of the date first
written above.
Date: 25 August, 2004
ALVARION LTD.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
ALVARION MOBILE INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------
▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
INTERWAVE COMMUNICATIONS INTERNATIONAL LTD.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President and Chief Financial Officer
AMENDMENT NO. 2
OF THE
AGREEMENT AND PLAN OF AMALGAMATION
THIS AMENDMENT NO. 2 OF THE AGREEMENT AND PLAN OF AMALGAMATION (this
"Amendment"), amends the Agreement and Plan of Amalgamation by and among
ALVARION LTD., an Israeli company ("Alvarion"), ALVARION MOBILE INC., a Delaware
corporation and wholly owned subsidiary of Alvarion ("Merger Sub") and INTERWAVE
COMMUNICATIONS INTERNATIONAL LTD., a Bermuda company ("Interwave"), dated July
27, 2004 (the "Amalgamation Agreement"), and is entered into as of October 16,
2004. Capitalized terms not otherwise defined in this Amendment shall have the
meaning given to them in the Amalgamation Agreement.
W I T N E S S E T H:
WHEREAS, Alvarion, Merger Sub and Interwave entered into that certain
Amalgamation Agreement relating to the amalgamation of Interwave with and into
Merger Sub, as amended by Amendment No. 1 of the Amalgamation Agreement (the
"First Amendment");
WHEREAS, the parties hereto desire to amend the Amalgamation
Agreement, as set forth herein; and
WHEREAS, except for this Amendment and the First Amendment, the
parties to this Amendment hereby agree that the Amalgamation Agreement shall
continue in full force and effect as originally executed and delivered.
NOW, THEREFORE, BE IT RESOLVED, in consideration of the agreements set
forth herein, and the parties' desire to resolve the disagreements between them,
the parties hereto hereby agree as follows:
C. Recital A of the Amalgamation Agreement shall be amended and restated in
its entirety to read as follows:
"Upon the terms and subject to the conditions of this Agreement,
Interwave and Merger Sub will amalgamate and merge with each other in
accordance with Section 104B of the Bermuda Companies Act 1981 (the
"Bermuda Act") and Section 252 of the Delaware General Corporation Law (the
"Delaware Code") (the "Amalgamation", and such amalgamated and merged
entity, the "Amalgamated Company"), such that the Amalgamated Company will
be a Delaware corporation and following which, pursuant to the Delaware
Code, the separate corporate existence of Interwave will cease and the
Amalgamated Company will become a wholly owned subsidiary of Alvarion, and
each Interwave Share will be exchanged for cash in the amount of US$4.18,
all in accordance with this Agreement, the Bermuda Act and the Delaware
Code; and"
2
D. Section 1.3(b) of the Amalgamation Agreement shall be amended and
restated in its entirety to read as follows:
"Exchange of Interwave Shares. Each Common Share, par value US$0.01
per share, in the capital of Interwave (the "Interwave Shares") issued and
outstanding immediately prior to the Effective Time, other than any
Interwave Shares owned by any direct or indirect wholly-owned subsidiary of
Interwave, shall automatically be converted into and represent solely the
right to receive an amount equal to US$ 4.18 (the "Per Share
Consideration"), subject to the provisions of Section 1.3(e), payable to
each person who was a registered holder of such Interwave Share immediately
prior to the Effective Time upon surrender of the certificate representing
such Interwave Share in the manner provided in Section 1.4 (or in the case
of a lost, stolen, destroyed or unissued certificate, upon delivery of an
affidavit (and bond, if required) in the manner provided in Section 1.6)."
E. Section 2.28 will be added to the Amalgamation Agreement to read as
follows:
"Quarterly Results. To Interwave's knowledge, its revenues, order
intake and cash collection for the fiscal quarter ended September 30, 2004
are as set forth in Section 2.28 of the Disclosure Schedule. The foregoing
are based on Interwave management estimates and have not been reviewed by
Interwave's independent auditors."
F. Section 5.16 of the Amalgamation Agreement shall be amended and restated
in its entirety to read as follows:
"Bridge Loan. According to the terms of the Amalgamation Agreement,
Alvarion will loan Interwave $3 million on July 28, 2004 (the "Initial
Loan"). According to the terms of the Amendment, Alvarion will loan
Interwave $5 million (the "Subsequent Loan" and, together with the Initial
Loan, the "Loan Facility"). Of the Subsequent Loan, $3 million shall be
delivered to an account designated by Interwave by wire transfer initiated
by Alvarion for immediate transfer to such designated account within 3
calendar days following the date of this Amendment, and the remaining $2
million shall be delivered to Interwave on October 30, 2004 (the "Second
Portion of the Subsequent Loan"). $1 million of the Second Portion of the
Subsequent Loan (the "PFG Payment Amount") shall be paid by Interwave
promptly to Partners For Growth ("PFG") in accordance with the terms of the
loan made available to Interwave by PFG on September 10, 2004. Interwave
will use the proceeds of the Loan Facility (other than the PFG Payment
Amount) to fund working capital requirements and operating activities. The
Loan Facility will bear interest at 6% per annum and will be secured by a
third priority security interest subordinate to Interwave's currently
outstanding debt to financial institutions. Upon completion of the
3
Amalgamation, all principal and accrued interest outstanding under the Loan
Facility will be cancelled. In the event that the Amalgamation is not
completed, or in the event that this Agreement is terminated prior to
completion of the Amalgamation, all principal and accrued interest
outstanding under the Loan Facility will be due and payable on the earlier
of (i) the lapse of six months following the grant of the Subsequent Loan
by Alvarion to Interwave under the Loan Facility or (ii) 30 days following
completion of an Acquisition Transaction."
G. Section 6.2(a) of the Amalgamation Agreement shall be amended and
restated in its entirety to read as follows:
"Representations and Warranties. Each representation and warranty of
Interwave contained in this Agreement shall have been true and correct as
of October 16, 2004 and shall be true and correct on and as of the Closing
Date with the same force and effect as if made on and as of the Closing
Date (other than those representations and warranties which address matters
only as of a particular date, which representations and warranties shall
have been true and correct as of such particular date) except in each case,
or in the aggregate, as would not reasonably be expected to constitute a
Material Adverse Effect on Interwave (provided, however, that such Material
Adverse Effect qualification shall be inapplicable with respect to the
representations and warranties contained in Sections 2.3(a), 2.19 and 2.21,
which representations and warranties shall be true and correct in all
material respects as of the applicable date, and with respect to the
representations and warranties contained in Section 2.7(c), shall be true
and correct in all respects). For purposes of determining the accuracy of
such representations and warranties for purposes of determining whether
this condition has been satisfied: (A) all "Material Adverse Effect"
qualifications and other qualifications based on the word "material" or
similar phrases (other than specified Dollar thresholds) contained in such
representations and warranties shall be disregarded; and (B) any update of
or modification to the Interwave Disclosure Schedule made or purported to
have been made after October 16, 2004 shall be disregarded. Alvarion shall
have received a certificate with respect to the foregoing signed on behalf
of Interwave by the Chief Executive Officer and Chief Financial Officer of
Interwave."
Interwave has delivered to Alvarion, concurrently herewith, the
Interwave Disclosure Schedule, updated as of October 16, 2004 (except for
disclosures which address matters only as of a particular date, which shall
be true and correct as of such particular date).
H. Section 7.1(b) of the Amalgamation Agreement shall be amended and
restated in its entirety to read as follows:
4
"by either Interwave or Alvarion, if the Amalgamation shall not have
been consummated by December 31, 2004 for any reason; provided, however,
that the right to terminate this Agreement under this Section 7.1(b) shall
not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Amalgamation to occur
on or before such date and such action or failure to act constitutes a
material breach of this Agreement."
I. Section 8.3(d) of the Amalgamation Agreement shall be amended and
restated in its entirety to read as follows:
"When used in connection with Alvarion, or Interwave, as the case may
be, the term "Material Adverse Effect" means any change, event, violation,
inaccuracy, circumstance or effect that, individually or when taken
together with all other such changes, events, violations, inaccuracies,
circumstances or effects that have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, is or is
reasonably likely to be materially adverse to the business, assets
(including intangible assets), financial condition or results of operations
of such entity and its Subsidiaries, taken as a whole; provided, however,
that in no event shall any of the following, alone or in combination, be
deemed to constitute, nor shall any of the following be taken into account
in determining whether there has been or will be, a Material Adverse Effect
on any entity: (i) any change in such entity's stock price or trading
volume in and of itself (but not excluding the underlying cause of any such
change pursuant to this clause (i)); (ii) any change, event, violation,
inaccuracy, circumstance or effect that results from changes, events or
circumstances affecting (A) any of the industries in which such entity
operates generally, or (B) general economic conditions (which changes,
events or circumstances in the case of (A) and (B) do not
disproportionately affect such entity); (iii) any change, event, violation,
inaccuracy, circumstance or effect resulting from public announcement or
pendency of this Agreement and the Amalgamation, including any loss,
diminution or disruption, whether actual or threatened, of existing or
prospective customer, distributor or supplier relationships that results
therefrom; (iv) any change, event, violation, inaccuracy, circumstance or
effect resulting from acts of war or terrorism or any escalation thereof in
and of itself (but excluding any changes or effect uniquely on or uniquely
with respect to Interwave resulting from any such act pursuant to this
clause (iv)); (v) any change, event, violation, inaccuracy, circumstance or
effect that results from any action or inaction taken by Alvarion; (vi) the
institution of litigation against Interwave or any of its officers or
directors alleging breach of their fiduciary duties in connection with the
entry into this Agreement or (vii) Interwave's revenues, order intake, cash
collection, financial condition or results of operations for the fiscal
quarter ended September 30, 2004 and/or the fiscal quarter ended December
31, 2004 (the "Quarterly Results") or the failure of the Quarterly Results
to meet Interwave's internal projections."
5
J. Section 6.1(d) and the second sentence of Section 6.1(b) of the
Amalgamation Agreement shall be deleted and have no force and effect as
conditions to each party's obligation to consummate and effect the Amalgamation
under Section 6.1. The foregoing notwithstanding, each party shall make
commercially reasonable efforts to satisfy the conditions in Section 6.1(b) and
Section 6.1(d) prior to the Closing Date.
K. Section 6.2(c) of the Amalgamation Agreement shall be amended and
restated in its entirety to read as follows:
"▇▇. ▇▇▇▇▇▇▇▇ and at least two of the other persons listed in Schedule
6.2(c) shall have entered into new employment agreements and/or consulting
agreements and non-competition agreements with the Amalgamated Company, in
substantially the form set forth in Exhibit B or, in the case of such
persons whose roles have been redefined, on such terms as may be agreed
upon between the affected individual and Alvarion."
L. Schedule 6.2(d) shall be amended and restated in its entirety to read as
follows:
"Schedule 6.2(d).Consents, waivers or approvals for The Qualcomm Agreements
shall be obtained prior to the consummation of this Agreement."
M. (a) Within five business days following the date hereof, interWave shall
dismiss without prejudice the complaint it had filed against Alvarion on October
4, 2004 in the United States District Court for the Southern District of New
York entitled Interwave Communications International, Ltd. v. Alvarion Limited,
Case No. 04 CV 7841, which complaint shall be dismissed with prejudice upon the
consummation of the Amalgamation.
(b) Interwave hereby forever relieves, releases, and discharges
Alvarion and any of its affiliated or related corporations and entities, and
each of their respective present and former officers, directors, agents,
employees, representatives, administrators, accountants, attorneys,
investigators, insurers, partners, associates, successors, and assigns, in any
and all capacities (including but not limited to the fiduciary, representative
or individual capacity of any released person or entity), and any Person owned
by or affiliated with any of the above, from any and all claims, damages,
actions, and causes of action, of whatever kind or nature, including without
limitation any statutory, civil, administrative or common law claim arising out
of any act or omission known to Interwave on the date hereof; provided, however,
that the release set forth in this Section 11(b) shall be deemed null and void
in the event that Alvarion breaches the Amalgamation Agreement, as amended
hereby.
(c) Alvarion hereby forever relieves, releases, and discharges
Interwave and any of its affiliated or related corporations and entities, and
each of their respective present and former officers, directors, agents,
employees, representatives, administrators, accountants, attorneys,
investigators, insurers, partners, associates, successors, and assigns, in any
and all capacities
6
(including but not limited to the fiduciary, representative or individual
capacity of any released person or entity), and any Person owned by or
affiliated with any of the above, from any and all claims, damages, actions, and
causes of action, of whatever kind or nature, including without limitation any
statutory, civil, administrative or common law claim arising out of any act or
omission known to Alvarion on the date hereof; provided, however, that the
release set forth in this Section 11(c) shall be deemed null and void in the
event that Interwave breaches the Amalgamation Agreement, as amended hereby.
N. Schedule 2.3(c) of the Interwave Disclosure Schedule lists (i) an option
grant, dated 5/9/04, to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ to purchase 11,000 Interwave common
shares at an exercise price of $3.34 per share under Interwave's 2001
Supplemental Stock Plan and (ii) an option grant, dated 5/9/04, to ▇▇▇▇ ▇▇▇▇▇▇▇
to purchase 5,000 Interwave common shares at an exercise price of $3.34 per
share under Interwave's 2001 Supplemental Stock Plan. Schedule 2.3(c) of the
Interwave Disclosure Schedule shall hereby be amended to indicate that each such
stock option identified in the foregoing paragraph was granted under Interwave's
1999 Option Plan.
O. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
P. This Amendment, when executed by the parties hereto as of the date
hereof, shall be binding upon each such party.
Q. This Amendment shall be governed by and construed in accordance with the
laws of the State of New York without reference to such state's principles of
conflicts of law.
R. To the extent not inconsistent with this Amendment and the First
Amendment, the Amalgamation Agreement remains in full force and effect as
originally executed and delivered.
7
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized officers as of the date first
written above.
Date: 16 October, 2004
ALVARION LTD.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
ALVARION MOBILE INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------
▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer
INTERWAVE COMMUNICATIONS INTERNATIONAL LTD.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
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Senior Vice President and Chief Financial Officer