AGREEMENT AND PLAN OF MERGER BY AND AMONG LUMERA CORPORATION, GIGOPTIX, LLC, GALILEO MERGER HOLDINGS, INC. GALILEO MERGER SUB G, LLC AND GALILEO MERGER SUB L, INC. DATED AS OF MARCH 27, 2008
Exhibit
2.1
AGREEMENT
AND PLAN OF MERGER
BY
AND
AMONG
LUMERA
CORPORATION,
GIGOPTIX,
LLC,
GALILEO
MERGER HOLDINGS, INC.
GALILEO
MERGER SUB G, LLC
AND
GALILEO
MERGER SUB L, INC.
DATED
AS OF MARCH 27, 2008
TABLE
OF CONTENTS
|
Section
5.18
|
FIRPTA
|
58
|
|
ARTICLE
VI CONDITIONS PRECEDENT
|
59
|
|
|
Section
6.1
|
Conditions
to Each Party’s Obligation to Effect the Mergers
|
59
|
|
Section
6.2
|
Conditions
to Obligations of Lumera
|
60
|
|
Section
6.3
|
Conditions
to Obligations of GigOptix
|
60
|
|
ARTICLE
VII TERMINATION, AMENDMENT AND WAIVER
|
61
|
|
|
Section
7.1
|
Termination
|
61
|
|
Section
7.2
|
Effect
of Termination
|
63
|
|
Section
7.3
|
Amendment
|
64
|
|
Section
7.4
|
Extension;
Waiver
|
64
|
|
ARTICLE
VIII GENERAL PROVISIONS
|
64
|
|
|
Section
8.1
|
Nonsurvival
of Representations and Warranties
|
64
|
|
Section
8.2
|
Notices
|
64
|
|
Section
8.3
|
Definitions
|
65
|
|
Section
8.4
|
Terms
Defined Elsewhere
|
70
|
|
Section
8.5
|
Interpretation
|
73
|
|
Section
8.6
|
Counterparts
|
73
|
|
Section
8.7
|
Entire
Agreement; No Third-Party Beneficiaries
|
74
|
|
Section
8.8
|
Governing
Law
|
74
|
|
Section
8.9
|
Assignment
|
74
|
|
Section
8.10
|
Consent
to Jurisdiction
|
74
|
|
Section
8.11
|
Headings,
etc
|
74
|
|
Section
8.12
|
Severability
|
74
|
|
Section
8.13
|
Failure
or Indulgence Not Waiver; Remedies Cumulative
|
75
|
|
Section
8.14
|
Waiver
of Jury Trial
|
75
|
|
Section
8.15
|
Specific
Performance
|
75
|
EXHIBITS
|
1.7(a)-1
|
Company
Charter
|
|
|
1.7(a)-2
|
Company
By-Laws
|
|
|
1.7(b)
|
Company
Officers
|
|
|
3.1(c)(v)
|
GigOptix
Independent Directors
|
|
|
3.2(c)(vi)
|
Lumera
Independent Directors
|
|
|
6.2(d)
|
Lock
Up Agreements
|
SCHEDULES
|
1.6(a)
|
Directors
of GigOptix Surviving Company
|
|
|
1.6(b)
|
Officers
of GigOptix Surviving Company
|
|
|
1.6(c)
|
Directors
of Lumera Surviving Corporation
|
|
|
1.6(d)
|
Officers
of Lumera Surviving Corporation
|
|
|
3.1(d)(i)
|
GigOptix
Financial Statements
|
GIGOPTIX
SCHEDULES
|
3.1(a)
(ii)
|
Charter
Documents
|
|
|
3.1(a)
(iii)
|
Subsidiaries
|
|
|
3.1(b)
|
Capital
Structure
|
|
|
3.1(c)(iii)
|
No
Conflict
|
|
|
3.1(c)(iv)(C)
|
Required
Filings or Consents
|
|
|
3.1(d)
|
Financial
Statements
|
|
|
3.1(f)
|
Absence
of Certain Changes or Events
|
|
|
3.1(h)
|
Labor
and Other Employment Matters
|
|
|
3.1(i)
|
Benefit
Plans
|
|
|
3.1(j)
|
Taxes
|
|
|
3.1(l)
|
Environmental
Matters
|
|
|
3.1(m)
|
Intellectual
Property
|
|
|
3.1(o)
|
Contracts
|
|
|
8.3(o)
|
Individuals
with Knowledge
|
LUMERA
SCHEDULES
|
3.2(a)(iii)
|
Subsidiaries
|
|
|
3.2(b)(i)
|
Outstanding
Securities and Securities Rights
|
|
|
3.2(c)(v)(D)
|
Required
Governmental Filings or Consents
|
|
|
3.2(d)(iv)
|
Liabilities
and Obligations
|
|
|
3.2(e)
|
Absence
of Certain Changes or Events
|
|
|
3.2(f)(iii)
|
Litigation
|
|
|
3.2(h)(i)
|
Benefit
Plans
|
|
|
3.2(l)(i)
|
Patents,
Trademarks and Registrations
|
|
|
3.2(l)(ii)(B)
|
Infringement
by Lumera
|
|
|
3.2(l)(ii)(C)
|
Infringement
by Third Party
|
|
|
4.1(a)
|
Conduct
of Business
|
|
|
4.1(a)(ii)
|
Permitted
Option Grants
|
|
|
4.1(a)(vi)
|
Permitted
Changes to Compensation and Benefits
|
|
|
4.1(a)(x)
|
Permitted
Capital Expenditures
|
|
|
8.3(o)
|
Individuals
with Knowledge
|
AGREEMENT
AND PLAN OF MERGER
THIS
AGREEMENT AND PLAN OF MERGER (this “Agreement”)
is
made and entered into as of March 27, 2008, by and among GigOptix, LLC, an
Idaho
limited liability company (“GigOptix”),
Lumera Corporation, a Delaware corporation (“Lumera”),
Galileo Merger Holdings, Inc., a Delaware corporation and a wholly-owned direct
subsidiary of Lumera (the “Company”),
Galileo Merger Sub G, LLC, an Idaho limited liability company and a wholly-owned
direct subsidiary of the Company (“Merger
Sub G”),
and
Galileo Merger Sub L, Inc., a Delaware corporation and a wholly-owned direct
subsidiary of the Company (“Merger
Sub L”).
WITNESSETH:
WHEREAS,
the respective Boards of Directors of GigOptix and Lumera have deemed it
advisable and fair to and in the best interests of each company and their
respective members and stockholders that GigOptix, Lumera and the other parties
engage in a business combination in order to advance their respective long-term
strategic business interests; and
WHEREAS
the respective Boards of Directors of GigOptix, Lumera, the Company, Merger
Sub
G and Merger Sub L have approved the consummation of the business combination
upon the terms and subject to the conditions set forth in this Agreement and
in
accordance with the provisions of the General Corporation Law of the State
of
Delaware (the “DGCL”)
and
the Idaho Limited Liability Company Act (the “ILLCA”),
pursuant to which Merger Sub G and Merger Sub L will merge, respectively, with
and into GigOptix and Lumera, respectively, whereby, subject to the terms of
Article II, each membership unit, of GigOptix (the “GigOptix
Membership Units”)
will
be converted into the right to receive the GigOptix Merger Consideration (as
defined in Section
2.1(a))
and
each share of Common Stock, par value $.001 per share, of Lumera (the
“Lumera
Common Stock”)
will
be converted into the right to receive the Lumera Merger Consideration (as
defined in Section
2.1(d))
(such
transactions are referred to herein individually as the “GigOptix
Merger”
and
the
“Lumera
Merger,”
respectively, and collectively as the “Mergers”),
as a
result of which the holders of GigOptix Membership Units and Lumera Common
Stock
will together own all of the outstanding shares of Common Stock, par value
$.01
per share, of the Company (the “Company
Common Stock”)
(and
the Company will, in turn, own all of the outstanding membership units of the
surviving limited liability company in the GigOptix Merger (the “Surviving
GigOptix Membership Units”)
and
all of the outstanding shares of Common Stock, par value $.01 per share, of
the
surviving corporation in the Lumera Merger (the “Surviving
Lumera Common Stock”));
and
WHEREAS,
the Board of Directors of Lumera has determined that this Agreement and the
transactions contemplated hereby are in the best interests of Lumera and its
stockholders and has determined to recommend to its stockholders adoption of
this Agreement and approval of the transactions contemplated hereby and the
approval of, the Company Charter (as defined in Section
1.7(a))
and the
New Equity Plan (as defined in Section
5.13(b))
(the
“Lumera
Stockholder Approval”);
and
WHEREAS,
the Board of Directors of GigOptix has determined that this Agreement and the
transactions contemplated hereby are in the best interests of GigOptix and
its
members and has determined to recommend to its members (together with the
recommendation of the Board of Directors of Lumera, the “Recommendations”)
the
adoption of this Agreement and approval of the transactions contemplated hereby,
the Company Charter (as defined in Section
1.7(a))
and the
New Equity Plan (as defined in Section
5.13(b))
(the
“GigOptix
Member Approval”);
and
1
WHEREAS,
for United States federal income tax purposes, it is intended that the GigOptix
Merger together with the Lumera Merger shall qualify as an integrated series
of
transfers to which Section 351 of the Internal Revenue Code of 1986, as amended
(the “Code”),
shall
apply;
NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE
I
THE
MERGERS
Section
1.1 The
Mergers.
(a) Upon
the
terms and subject to the conditions set forth in this Agreement, at the GigOptix
Effective Time (as defined in Section
1.3),
Merger
Sub G shall be merged with and into GigOptix in accordance with Section 53-661
of the ILLCA. In the GigOptix Merger, GigOptix shall be the surviving limited
liability company and shall continue its existence under the laws of the State
of Idaho and shall succeed to and assume all of the rights and obligations
of
GigOptix and Merger Sub G in accordance with the ILLCA (the “GigOptix
Surviving Company”),
and
the separate corporate existence of Merger Sub G shall cease. As a result of
the
GigOptix Merger, GigOptix shall become a wholly-owned direct subsidiary of
the
Company.
(b) Upon
the
terms and subject to the conditions set forth in this Agreement, at the Lumera
Effective Time (as defined in Section
1.3),
Merger
Sub L shall be merged with and into Lumera in accordance with Section 251 of
the
DGCL. In the Lumera Merger, Lumera shall be the surviving corporation and shall
continue its corporate existence under the laws of the State of Delaware and
shall succeed to and assume all of the rights and obligations of Lumera and
Merger Sub L in accordance with the DGCL (the “Lumera
Surviving Corporation”),
and
the separate corporate existence of Merger Sub L shall cease. As a result of
the
Lumera Merger, Lumera shall become a wholly-owned direct subsidiary of the
Company.
Section
1.2 Closing.
The
closing of the Mergers (the “Closing”)
shall
take place at 12:00 p.m., New York time, on a date to be specified by the
parties, which shall be no later than the second business day after satisfaction
or waiver of all of the conditions set forth in Article IV (other than delivery
of items to be delivered at the Closing and other than those conditions that
by
their nature are to be satisfied at the Closing, it being understood that the
occurrence of the Closing shall remain subject to the delivery of such items
and
the satisfaction or waiver of such conditions at the Closing) at the offices
of
Ropes & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, unless
another time, date or place is agreed to in writing by the parties hereto.
The
date on which the Closing occurs is referred to herein as the “Closing
Date.”
2
Section
1.3 Effective
Time of the GigOptix Merger and the Lumera Merger.
Subject
to the terms and conditions of this Agreement, as soon as practicable on the
Closing Date, GigOptix shall cause the GigOptix Merger to be consummated by
filing a certificate of merger in such form as required by, and executed in
accordance with, the relevant provisions of the ILLCA (the “GigOptix
Certificate of Merger”)
with
the Secretary of State of the State of Idaho and shall make all other filings
or
recordings required under the ILLCA and Lumera shall cause the Lumera Merger
to
be consummated by filing a certificate of merger in such form as required by,
and executed in accordance with, the relevant provisions of the DGCL (the
“Lumera
Certificate of Merger”)
with
the Secretary of State of the State of Delaware and shall make all other filings
or recordings required under the DGCL. The GigOptix Merger shall become
effective at such time as the GigOptix Certificate of Merger is duly filed
with
the Secretary of State of the State of Idaho or at such subsequent date or
time
as GigOptix and Lumera shall agree and specify in the GigOptix Certificate
of
Merger, which date shall be not more than 90 days after the date the GigOptix
Certificate of Merger is received for filing (the time the GigOptix Merger
becomes effective being hereinafter referred to as the “GigOptix
Effective Time”)
and
the Lumera Merger shall become effective at such time as the Lumera Certificate
of Merger is duly filed with the Secretary of State of the State of Delaware
or
at such subsequent date or time as GigOptix and Lumera shall agree and specify
in the Lumera Certificate of Merger, which date shall be not more than 90 days
after the date the Lumera Certificate of Merger is received for filing (the
time
the Lumera Merger becomes effective being hereinafter referred to as the
“Lumera
Effective Time”).
The
parties shall cause the Lumera Effective Time and the GigOptix Effective Time
to
occur simultaneously, and such time shall hereinafter be referred to as the
“Effective
Time.”
Section
1.4 Effects
of the Mergers.
At the
GigOptix Effective Time, the GigOptix Merger shall have the effects set forth
in
this Agreement and in the applicable provisions of the ILLCA. At the Lumera
Effective Time, the Lumera Merger shall have the effects set forth in this
Agreement and in the applicable provisions of the DGCL.
Section
1.5 Organizational
Documents of GigOptix, Lumera and the Company.
(a) At
the
GigOptix Effective Time, the operating agreement of Merger Sub G, as in effect
immediately prior to the GigOptix Effective Time, shall be the operating
agreement of the GigOptix Surviving Company until thereafter changed or amended
as provided therein or by Applicable Laws (as defined in Section
3.1(g)(ii)).
(b) At
the
Lumera Effective Time, (i) the certificate of incorporation of Merger Sub L,
as
in effect immediately prior to the Lumera Effective Time, shall be the
certificate of incorporation of the Lumera Surviving Corporation until
thereafter changed or amended as provided therein or by Applicable Laws and
(ii)
the by-laws of Merger Sub L, as in effect immediately prior to the Lumera
Effective Time, shall be the by-laws of the Lumera Surviving Corporation, until
thereafter changed or amended as provided therein, in the certificate of
incorporation of the Lumera Surviving Corporation or by Applicable Laws.
3
Section
1.6 Directors
and Officers of the GigOptix Surviving Company and the Lumera Surviving
Corporation.
(a) The
persons listed on Schedule
1.6(a)
hereto
shall, from and after the GigOptix Effective Time, be the directors of the
GigOptix Surviving Company until their successors have been duly elected or
appointed and qualified.
(b) The
persons listed on Schedule
1.6(b)
hereto
shall, from and after the GigOptix Effective Time, be the officers of the
GigOptix Surviving Company until their successors have been duly elected or
appointed and qualified.
(c) The
persons listed on Schedule
1.6(c)
hereto
shall, from and after the Lumera Effective Time, be the directors of the Lumera
Surviving Corporation until their successors have been duly elected or appointed
and qualified.
(d) The
persons listed on Schedule
1.6(d)
hereto
shall, from and after the Lumera Effective Time, be the officers of the Lumera
Surviving Corporation until their successors have been duly elected or appointed
and qualified.
Section
1.7 Governance
of the Company.
(a) Lumera,
GigOptix and the Company shall take all appropriate action so that, immediately
prior to the Effective Time, (i) the certificate of incorporation of the Company
shall be in the form attached as Exhibit
1.7(a)-1
hereto
(the “Company
Charter”)
and
(ii) the by-laws of the Company shall be in the form attached as Exhibit
1.7(a)-2
hereto
(the “Company
By-Laws”).
(b) The
Company shall cause Dr. ▇▇▇ ▇▇▇▇ to be appointed as the Chairman of the Board
and Chief Executive Officer of the Company and the individuals listed on
Exhibit
1.7(b)
hereto
to be appointed to the positions with the Company set forth therein, in each
case, effective as of the Effective Time. Except as provided in the first
sentence of this Section
1.7(b),
Officer
(as such term is defined for purposes of Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”))
and
other key management positions at the Company and, subject to Section
1.6,
its
Subsidiaries (as defined in Section
8.3(y)),
shall
be filled effective as of the Effective Time at the discretion of the Chief
Executive Officer of the Company as of the Effective Time, subject to approval
to the extent required by Applicable Laws or the Company’s by-laws, by the
Company’s Board of Directors after the Effective Time. After the Effective Time,
changes in Officer and other key management positions at the Company and its
Subsidiaries shall be made in accordance with Applicable Laws and the Company’s
by-laws as in effect from time to time.
(c) Prior
to
the Effective Time, Lumera and the Company shall cause the Company to change
its
name to GigOptix, Inc.
4
Section
1.8 Directors
of the Company at the Effective Time.
(a) As
of the
Effective Time, the Board of Directors of the Company shall cause the number
of
directors that shall constitute the full Board of Directors of the Company
at
the Effective Time to be seven and shall cause the Board of Directors to be
divided into three classes, with members of each class to stand for election
at
successive annual meetings of the Company’s stockholders. Prior to the Effective
Time, the Board of Directors of GigOptix shall designate two members of the
Board of Directors of the Company to be appointed or elected as of the Effective
Time pursuant to this Section
1.8(a)
(the
“GigOptix
Directors”),
of
which one designee shall qualify as an “independent director” with respect to
the Company within the meaning of Rule 4200(a)(15) of the Marketplace Rules
of
the NASDAQ Stock Market LLC (an “Independent
Director”).
Prior
to the Effective Time, the Board of Directors of Lumera shall designate two
members of the Board of Directors of the Company to be appointed or elected
as
of the Effective Time pursuant to this Section
1.8(a)
(the
“Lumera
Directors”),
of
which one designee shall qualify as an Independent Director. In addition, Dr.
▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ shall be appointed or elected as of the
Effective Time as members of the Board of Directors and Dr. ▇▇▇ ▇▇▇▇ shall
be
named Chairman of the Board. As soon as practicable following the Effective
Time, the six members of the Board of Directors (including the Chairman of
the
Board) shall designate one member of the Board of Directors of the Company
to be
elected or appointed who
shall
qualify as an Independent Director, provided that such designation shall require
the consent of at least one Lumera Director (the “Designated
Director”).
The
Designated Director and ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ shall be designated Class I
directors and shall stand for election at the first annual meeting of the
Company’s stockholders held after the Closing and thereafter in accordance with
the Company By-Laws. One GigOptix Director and one Lumera Director shall be
designated Class II directors and shall stand for election at the second annual
meeting of the Company’s stockholders held after the Closing and thereafter in
accordance with the Company By-Laws. One GigOptix Director, one Lumera Director
and Dr. ▇▇▇ ▇▇▇▇ shall be designated Class III directors and shall stand for
election at the third annual meeting of the Company’s stockholders held after
the Closing and thereafter in accordance with the Company By-Laws.
(b) All
vacancies on the Board of Directors of the Company or on a committee thereof
created by the cessation of service of a Continuing Lumera Director for any
reason shall be filled by a nominee designated to the Board of Directors of
the
Company by the remaining Continuing Lumera Director; and all vacancies on the
Board of Directors of the Company or on a committee thereof created by the
cessation of service of a Continuing GigOptix Director for any reason shall
be
filled by a nominee designated to the Board of Directors of the Company by
the
remaining Continuing GigOptix Director and Dr. ▇▇▇ ▇▇▇▇. The terms “Continuing
Lumera Directors”
and
“Continuing
GigOptix Directors”
shall
for purposes of this Agreement mean, respectively, the directors of Lumera
or
GigOptix or their successors, as the case may be, who were appointed or
designated to serve as directors of the Company pursuant to Section
1.8(a).
(c) The
provisions of Section
1.8(a)
and
1.8(b)
shall be
incorporated into the Company By-Laws. Following the Effective Time, the
provisions of Section
1.8(a)
and
1.8(b)
as so
incorporated shall be subject to amendment in accordance with the terms of
the
Company Charter and the Company By-Laws, as each may thereafter be changed
and
amended as provided therein or by Applicable Laws, and upon the effectiveness
of
the Company By-Laws, such provisions hereof shall no longer be operative and
binding with respect to the Company other than as provisions of the Company
By-Laws.
5
ARTICLE
II
EFFECTS
OF THE MERGERS; EXCHANGE OF CERTIFICATES
Section
2.1 Effect
on Capital Stock and Membership Units.
Subject
to the terms and conditions of this Agreement, at the GigOptix Effective Time
or
the Lumera Effective Time, as applicable, by virtue of the GigOptix Merger
or
the Lumera Merger, as applicable, and without any action on the part of any
party or the members or holders of any shares of capital stock of any
party:
(a) Conversion
of GigOptix Membership Units.
Subject
to Section
2.1(g)
and
Section
2.1(h),
each
GigOptix Membership Unit issued and outstanding immediately prior to the
GigOptix Effective Time, other than any GigOptix Membership Units to be canceled
pursuant to Section
2.1(b),
shall
be automatically converted into and become the right to receive (i) a number
of
shares of Company Common Stock equal to the quotient obtained by dividing (x)
the aggregate number of shares of Company Common Stock issued as Lumera Merger
Consideration pursuant to Section 2.1(d), as such number may be adjusted from
time to time, by (y) the aggregate number of GigOptix Membership Units
outstanding plus GigOptix Membership Units issuable upon exercise of GigOptix
Options (the “GigOptix
Exchange Ratio”)
(such
shares of Company Common Stock, the “GigOptix
Common Stock Merger Consideration”),
(ii)
the Company A Warrants (the “Company
A Warrants Merger Consideration”),
(iii)
the Company B Warrants (the “Company
B Warrants Merger Consideration”)
and
(iv) the Company C Warrants (the “Company
C Warrants Merger Consideration”
and,
together with the GigOptix Common Stock Merger Consideration and the Company
A
Warrants Merger Consideration and the Company B Warrants Merger Consideration,
the “GigOptix
Merger Consideration”).
As a
result of the GigOptix Merger, at the GigOptix Effective Time, each holder
of a
GigOptix Certificate (as defined in Section
2.2(b))
shall
cease to have any rights with respect thereto, except that such GigOptix
Certificate shall represent only the right to receive the GigOptix Merger
Consideration deliverable in respect of the GigOptix Membership Units
represented by such GigOptix Certificate immediately prior to the GigOptix
Effective Time, any cash in lieu of fractional shares payable pursuant to
Section
2.1(g)
and any
dividends or other distributions payable pursuant to Section
2.2(c),
all to
be issued or paid, without interest, in consideration therefor upon the
surrender of such GigOptix Certificate in accordance with Section
2.2(b)
(or, in
the case of a lost, stolen or destroyed GigOptix Certificate, Section
2.2(i)).
(b) Cancellation
of Membership Units.
Each
GigOptix Membership Unit that is owned by GigOptix, Lumera or the Company shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(c) Conversion
of Merger Sub G Membership Units.
Each
Merger Sub G membership unit issued and outstanding immediately prior to the
GigOptix Effective Time shall be automatically converted into one newly and
validly issued, fully paid and nonassessable membership unit of the GigOptix
Surviving Company.
(d) Conversion
of Lumera Common Stock.
Subject
to Section
2.1(g)
and
Section
2.1(h),
each
share of Lumera Common Stock issued and outstanding immediately prior to the
Lumera Effective Time, other than any shares of Lumera Common Stock to be
canceled pursuant to Section
2.1(e),
shall
be automatically converted into and become the right to receive 0.25 (the
“Lumera
Exchange Ratio”)
fully
paid and nonassessable shares of Company Common Stock (the “Lumera
Merger Consideration”
and
together with the GigOptix Merger Consideration, the “Merger
Consideration”).
As a
result of the Lumera Merger, at the Lumera Effective Time, each holder of a
Lumera Certificate (as defined in Section
2.2(b))
shall
cease to have any rights with respect thereto, except that such Lumera
Certificate shall represent only the right to receive the Lumera Merger
Consideration deliverable in respect of the shares of Lumera Common Stock
represented by such Lumera Certificate immediately prior to the Lumera Effective
Time, any cash in lieu of fractional shares payable pursuant to Section
2.1(g)
and any
dividends or other distributions payable pursuant to Section
2.2(c),
all to
be issued or paid, without interest, in consideration therefor upon the
surrender of such Lumera Certificate in accordance with Section
2.2(b)
(or, in
the case of a lost, stolen or destroyed Lumera Certificate, Section
2.2(i)).
6
(e) Cancellation
of Shares.
Each
share of Lumera Common Stock that is owned by GigOptix, Lumera or the Company
shall automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(f) Conversion
of Merger Sub L Common Stock.
Each
share of Common Stock, par value $0.01 per share, of Merger Sub L issued and
outstanding immediately prior to the Lumera Effective Time shall be
automatically converted into one newly and validly issued, fully paid and
nonassessable share of Common Stock of the Lumera Surviving
Corporation.
(g) Fractional
Shares.
No
fraction of a share of Company Common Stock shall be issued by virtue of the
Mergers, but in lieu thereof each holder of Lumera Common Stock or GigOptix
Membership Units who would otherwise be entitled to a fraction of a share of
Company Common Stock (after aggregating all shares of Company Common Stock
that
otherwise would be received by such holder) shall, upon surrender of such
holder’s Certificate or Certificates (as defined in Section
2.2(b)),
receive from the Company an amount of cash (rounded to the nearest whole cent),
without interest, equal to the product of: (i) the fractional share interest
(after aggregating all shares of Company Common Stock that would otherwise
be
received by such holder) which such holder would otherwise receive, multiplied
by (ii) the average of the closing prices of one share of Lumera Common Stock
on
the NASDAQ Global Market (“NASDAQ”)
for
the five consecutive trading days immediately prior to the Closing
Date.
(h) Adjustments
to Exchange Ratios.
(i) So
as to
maintain the relative proportionate interests of the holders of the Lumera
Common Stock and the GigOptix Membership Units in the Company Common Stock
immediately following the Effective Time intended by this Agreement as of the
date hereof, the Lumera Exchange Ratio, the Lumera Merger Consideration, the
GigOptix Exchange Ratio and the GigOptix Merger Consideration shall be adjusted
to reflect fully the appropriate effect of any issuance of Lumera Common Stock
or GigOptix Membership Units permitted under Section
4.1(a)(ii)
(including, without limitation, shares of Lumera Common Stock issued in a
financing or GigOptix Membership Units issued as consideration for the
conversion of debt owed to any GigOptix member) or stock split, split-up,
reverse stock split, stock dividend (including any dividend or distribution
of
securities convertible into, or exercisable or exchangeable for, Lumera Common
Stock, GigOptix Membership Units or Company Common Stock), reorganization,
recapitalization, reclassification, combination or exchange of shares, or other
similar change with respect to Lumera Common Stock, GigOptix Membership Units
or
Company Common Stock having a record date occurring on or after the date hereof
and prior to the Effective Time.
7
(ii) GigOptix
and Lumera agree that they will review together the trading prices in the Lumera
Common Stock in the period following public announcement of the transactions
contemplated by this Agreement with a view to assessing the ability of the
Company Common Stock to satisfy the $5.00 per share minimum bid price
requirement for initial listing of the Company Common Stock on The NASDAQ Global
Market (the “Minimum
Trading Price Test”).
If,
based on such trading prices, it appears reasonably likely that the trading
prices of the Company Common Stock would fail to meet the Minimum Trading Price
Test, GigOptix and Lumera will decrease both the GigOptix Exchange Ratio and
the
Lumera Exchange Ratio, in such a manner as shall maintain the relative
proportionate interests of the holders of the Lumera Common Stock and the
GigOptix Membership Units in the Company Common Stock immediately following
the
Effective Time intended by this Agreement as of the date hereof, so as to
decrease the total number of shares of Company Common Stock to be issued in
the
Mergers and thereby increase the expected trading prices for the Company Common
Stock to a level sufficient to meet the Minimum Trading Price Test. More than
one adjustment to the GigOptix Exchange Ratio and the Lumera Exchange Ratio
may
be made under this Section
2.1(h)(ii).
GigOptix and Lumera will determine whether any such adjustment should be made
both before the mailing of the Proxy Statement (as defined in Section
3.1(e))
and
before the Lumera Stockholders’ Meeting (as defined in Section
5.1(b))
is
held, and may make any such adjustment even if such an adjustment would require
a postponement of the Lumera Stockholders’ Meeting and the preparation,
clearance with the SEC (as defined in Section
3.1(e))
and
mailing of supplemental proxy materials.
(i) Stock
Options, Warrants and Rights.
(i) At
the
Effective Time, each then outstanding Lumera Option, each then outstanding
Lumera Warrant and each then outstanding GigOptix Option, in each case, whether
or not vested or exercisable at the Effective Time, shall be assumed by the
Company and converted into an option, right or warrant, as applicable, to
purchase Company Common Stock on the same terms and conditions applicable to
such Lumera Option, Lumera Warrant or GigOptix Option, as applicable (including
any applicable option award agreement, warrant instrument or other document
evidencing such Lumera Option, Lumera Warrant or GigOptix Option, as
applicable), immediately prior to the Effective Time, including existing vesting
and exercisability provisions, except that:
(A) each
assumed Lumera Option or each assumed Lumera Warrant, as applicable, when
exercisable, shall be exercisable for that number of whole shares of Company
Common Stock equal to the product of the number of shares of Lumera Common
Stock
that were subject to such assumed Lumera Option or assumed Lumera Warrant,
as
applicable, immediately prior to the Effective Time multiplied by the Lumera
Exchange Ratio, rounded down to the nearest whole share;
(B) the
per
share exercise price for the shares of Company Common Stock issuable upon
exercise of each assumed Lumera Option or each assumed Lumera Warrant, as
applicable, shall be equal to the quotient determined by dividing the per share
exercise price of Lumera Common Stock of each assumed Lumera Option or each
assumed Lumera Warrant, as applicable, by the Lumera Exchange Ratio, rounded
up
to the nearest whole cent;
8
(C) each
assumed GigOptix Option, when exercisable, shall be exercisable for that number
of whole shares of Company Common Stock equal to the product of the number
of
shares of GigOptix Membership Units that were subject to such assumed GigOptix
Option immediately prior to the Effective Time multiplied by the GigOptix
Exchange Ratio, rounded down to the nearest whole share; and
(D) the
per
share exercise price for the shares of Company Common Stock issuable upon
exercise of each such assumed GigOptix Option shall be equal to the quotient
determined by dividing the per share exercise price of GigOptix Membership
Units
of such assumed GigOptix Option by the GigOptix Exchange Ratio, rounded up
to
the nearest whole cent.
Notwithstanding
the foregoing, the conversion of any Lumera Option or GigOptix Option that
is
intended to be an “incentive stock option” within the meaning of Section 422 of
the Code into an option to purchase Company Common Stock shall be made so as
not
to constitute a “modification” of such Lumera Option or GigOptix Option within
the meaning of Section 424 of the Code.
(ii) Effective
as of the Effective Time, the Company shall assume the Lumera Stock Plan only
to
the extent that the Lumera Options which shall be assumed by the Company and
converted into awards relating to the Company Common Stock pursuant to this
Section 2.1(i) were issued pursuant to the Lumera Stock Plan. Effective as
of
the Effective Time, the Company shall assume the GigOptix Plan only to the
extent that the GigOptix Options which shall be assumed by the Company and
converted into awards relating to the Company Common Stock pursuant to this
Section 2.1(i) were issued pursuant to the GigOptix Plan.
(iii) Each
of
Lumera and GigOptix shall take all corporate action necessary, so that, as
of
the Effective Time, (1) each Lumera Option, each Lumera Warrant, each GigOptix
Option is treated in accordance with the applicable provisions of Sections
2.1(i)(A), (i)(B), (i)(C) and (i)(D) and (2) assuming approval of the New Equity
Plan pursuant to Section 5.13(b), each of the Lumera Stock Plan and the GigOptix
Plan shall terminate to the extent such plan is not assumed by the Company
pursuant to Section 2.1(i). As soon as reasonably practicable following the
Effective Time, the Company shall (A) issue to each holder of an assumed Lumera
Option, an assumed Lumera Warrant or an assumed GigOptix Option, a document
evidencing the foregoing assumption of such Lumera Option, Lumera Warrant or
GigOptix Option, as applicable, and (B) issue appropriate notices setting forth
such holder’s rights pursuant to the foregoing awards, including the effect of
the Mergers on such awards. Prior to the Effective Time, the Company shall
take
all corporate action necessary to reserve for issuance a sufficient number
of
shares of Company Common Stock for delivery in connection with the exercise
or
settlement of the assumed Lumera Options, assumed Lumera Warrants and assumed
GigOptix Options. As soon as reasonably practicable following the Closing Date,
subject to applicable SEC rules and regulations, the Company shall register
the
offering and sale by the Company of the shares of Company Common Stock subject
to the assumed Lumera Options and assumed GigOptix Options on Form S-8 (or
any
successor form), and the Company shall maintain the effectiveness of such
registration statement or registration statements with respect thereto for
so
long as such awards remain outstanding.
9
(iv) Each
of
the Company, Lumera and GigOptix shall take all corporate action necessary
to
ensure that, as of the Effective Time, all option awards and warrants are
assumed by the Company.
(j) Dissenting
Shares.
Notwithstanding the provisions of Section
2.1(d),
each
share of Lumera Common Stock issued and outstanding immediately prior to the
Lumera Effective Time and held by a holder who has not voted in favor of the
Lumera Merger or consented thereto in writing and who has demanded appraisal
for
such share of Lumera Common Stock in accordance with the DGCL shall not be
converted into a right to receive the Lumera Merger Consideration to be paid
with respect to such share of Lumera Common Stock pursuant to Section
2.1(d)
but
shall be converted into the right to receive such consideration as may be
determined to be due with respect to such share pursuant to the DGCL, unless
such holder fails to perfect, withdraws or otherwise loses such holder’s right
to appraisal. If, after the Lumera Effective Time, such holder fails to perfect,
withdraws or loses such holder’s right to appraisal, such share shall be deemed
to have been converted as of the Lumera Effective Time into a right to receive
the Lumera Merger Consideration to be paid with respect to such share pursuant
to Section
2.1(d).
The
Company shall control all negotiations and proceedings and any settlement of
such demands shall be an obligation of the Company.
(k) Cancellation
of Company Shares.
Each
share of Company Common Stock held by Lumera immediately prior to the Effective
Time shall automatically be canceled and retired and shall cease to exist,
and
no consideration shall be delivered in exchange therefor.
Section
2.2 Exchange
of Shares and Certificates.
(a) Exchange
Agent.
As of
the Effective Time, the Company shall engage an institution reasonably
satisfactory to GigOptix and Lumera (and Lumera’s transfer agent shall be deemed
satisfactory to GigOptix and Lumera) to act as exchange agent in connection
with
the Mergers (the “Exchange
Agent”),
pursuant to an agreement reasonably satisfactory to GigOptix and Lumera. At
the
Effective Time, the Company shall deposit with the Exchange Agent, in trust
for
the benefit of the holders of Lumera Common Stock and GigOptix Membership Units
immediately prior to the Lumera Effective Time and the GigOptix Effective Time,
respectively, certificates representing the shares of Company Common Stock
issuable pursuant to Sections 2.1(a)
and
2.1(d).
In
addition, the Company shall make available by depositing with the Exchange
Agent, as necessary from time to time after the Effective Time, cash in an
amount sufficient to make the payments in lieu of fractional shares pursuant
to
Section
2.1(g)
and any
dividends or distributions to which former holders of Lumera Common Stock and
of
GigOptix Membership Units may be entitled pursuant to Section
2.2(c).
All
cash and certificates representing shares of Company Common Stock deposited
with
the Exchange Agent shall hereinafter be referred to as the “Exchange
Fund.”
10
(b) Exchange
Procedures.
Promptly after the Effective Time, and in any event within ten business days
after the Effective Time, Lumera shall cause the Exchange Agent to mail to
each
holder of record of a certificate or certificates which immediately prior to
the
Lumera Effective Time or the GigOptix Effective Time, as applicable, represented
outstanding shares of Lumera Common Stock (the “Lumera
Certificates”)
or of
GigOptix Membership Units (the “GigOptix
Certificates”
and,
together with the Lumera Certificates, the “Certificates”),
which
at the Lumera Effective Time or the GigOptix Effective Time, as applicable,
were
converted into the right to receive the Merger Consideration pursuant to
Section
2.1,
(i) a
letter of transmittal (which shall specify that delivery shall be effected,
and
that risk of loss and title to the Certificates shall pass, only upon delivery
of the Certificates to the Exchange Agent and which shall be in form and
substance reasonably satisfactory to GigOptix and Lumera) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing whole shares of Company Common Stock, cash in lieu
of
any fractional shares pursuant to Section
2.1(g)
and any
dividends or other distributions payable pursuant to Section
2.2(c).
Upon
surrender of Certificates for cancellation to the Exchange Agent, together
with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificates shall be
entitled to receive in exchange therefor a certificate representing that number
of whole shares of Company Common Stock (after taking into account all
Certificates surrendered by such holder) to which such holder is entitled
pursuant to Section
2.1
(which
shall be in uncertificated book entry form unless a physical certificate is
requested), payment by cash or check in lieu of fractional shares which such
holder is entitled to receive pursuant to Section
2.1(g)
and any
dividends or distributions payable pursuant to Section
2.2(c),
and the
Certificates so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Lumera Common Stock or GigOptix Membership
Units which is not registered in the transfer records of Lumera or GigOptix,
respectively, a certificate representing the proper number of shares of Company
Common Stock may be issued to a Person (as defined in Section
8.3(v))
other
than the Person in whose name the Certificate so surrendered is registered,
if
such Certificate shall be properly endorsed or otherwise be in proper form
for
transfer and the Person requesting such issuance shall pay any transfer or
other
Taxes (as defined in Section
3.1(j)(xi))
required by reason of the issuance of shares of Company Common Stock to a Person
other than the registered holder of such Certificate or establish to the
reasonable satisfaction of the Company that such Taxes have been paid or are
not
applicable. Until surrendered as contemplated by this Section
2.2(b),
each
Certificate shall be deemed at any time after the Lumera Effective Time or
the
GigOptix Effective Time, as applicable, to represent only the right to receive
the Merger Consideration (and any amounts to be paid pursuant to Section
2.1(g)
or
Section
2.2(c))
upon
such surrender. No interest shall be paid or shall accrue on any amount payable
pursuant to Section
2.1(g)
or
Section
2.2(c).
(c) Distributions
with Respect to Unexchanged Shares; Voting.
All
shares of Company Common Stock to be issued pursuant to the Mergers shall be
deemed issued and outstanding as of the Effective Time and whenever a dividend
or other distribution is declared by the Company in respect of Company Common
Stock, the record date for which dividend or other distribution is after the
Effective Time, such declaration shall include dividends or other distributions
in respect of all shares issuable pursuant to this Agreement. Notwithstanding
the foregoing, no dividends or other distributions with respect to shares of
Company Common Stock with a record date after the Effective Time shall be
delivered to the holder of any unsurrendered Certificate with respect to the
shares of Company Common Stock represented thereby, and no cash payment in
lieu
of fractional shares shall be paid to any such holder pursuant to Section
2.1(g),
until
such Certificate has been surrendered in accordance with this Article II.
Subject to Applicable Laws, following surrender of any such Certificate, there
shall be delivered to the record holder thereof, without interest, (i) promptly
after such surrender, the number of whole shares of Company Common Stock
issuable in exchange therefor pursuant to this Article II, together with any
cash payable in lieu of a fractional share of Company Common Stock to which
such
holder is entitled pursuant to Section
2.1(g)
and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Company
Common Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time and a payment
date subsequent to such surrender payable with respect to such whole shares
of
Company Common Stock.
11
(d) No
Further Ownership Rights in Lumera Common Stock or GigOptix Membership
Units.
All
shares of Company Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article II and any cash paid
pursuant to Section
2.1(g)
or
Section
2.2(c)
shall be
deemed to have been issued (or paid) in full satisfaction of all rights
pertaining to the Lumera Common Stock or GigOptix Membership Units, as
applicable, previously represented by such Certificates. After the Lumera
Effective Time and the GigOptix Effective Time, the transfer books and records
of Lumera and GigOptix, respectively, shall be closed and there shall be no
further registration of transfers on the transfer books of the Lumera Surviving
Corporation or the GigOptix Surviving Company, respectively, of the shares
of
Lumera Common Stock or GigOptix Membership Units, respectively, which were
outstanding immediately prior to the Lumera Effective Time or the GigOptix
Effective Time, respectively. If, after the Lumera Effective Time or the
GigOptix Effective Time, respectively, Certificates are presented to the Lumera
Surviving Corporation or the GigOptix Surviving Company, respectively, or the
Exchange Agent for any reason, they shall be canceled and exchanged as provided
in this Article II.
(e) Termination
of Exchange Fund.
Any
portion of the Exchange Fund which remains undistributed to the holders of
Certificates one year after the Effective Time shall be delivered to the
Company, upon demand, and any holders of Certificates who have not theretofore
complied with this Article II shall thereafter look only to the Company for
delivery of their claim for the Merger Consideration, any cash in lieu of
fractional shares of Company Common Stock pursuant to Section
2.1(g)
and any
dividends or distributions pursuant to Section
2.2(c).
(f) No
Liability.
None of
the Company, Lumera, GigOptix or the Exchange Agent or any of their respective
directors, officers, employees or agents shall be liable to any Person in
respect of any shares of Company Common Stock (or dividends or distributions
with respect thereto) or cash from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
If any Lumera Certificate or GigOptix Certificate shall not have been
surrendered prior to seven years after the Lumera Effective Time or the GigOptix
Effective Time, respectively, or immediately prior to such earlier date on
which
any shares of Company Common Stock, any cash in lieu of fractional shares of
Company Common Stock or any dividends or distributions with respect to Company
Common Stock issuable in respect of such Certificate would otherwise escheat
to
or become the property of any Governmental Entity (as defined in Section
8.3(l)),
any
such shares, cash, dividends or distributions in respect of such Certificate
shall, to the extent permitted by Applicable Laws, become the property of the
Company, free and clear of all claims or interests of any Person previously
entitled thereto.
12
(g) Investment
of Exchange Fund.
The
Exchange Agent shall invest any cash included in the Exchange Fund as directed
by the Company, provided that no such investment or loss thereon shall affect
the amounts payable to former stockholders or members of Lumera or GigOptix
after the Effective Time pursuant to this Article II. Any interest and other
income resulting from such investment shall become a part of the Exchange Fund,
and any amounts in excess of the amounts payable pursuant to this Article II
shall promptly be paid to the Company.
(h) Withholding
Rights.
The
Company and the Exchange Agent shall be entitled to deduct and withhold from
any
consideration payable pursuant to this Agreement to any Person who was a holder
of Lumera Common Stock or GigOptix Membership Units immediately prior to the
Lumera Effective Time or the GigOptix Effective Time, respectively, such amounts
as the Company or the Exchange Agent may be required to deduct and withhold
with
respect to the making of such payment under the Code or any other provision
of
federal, state, local or foreign Tax law. To the extent that amounts are so
withheld by the Company or the Exchange Agent, such withheld amounts shall
be
treated for all purposes of this Agreement as having been paid to the Person
to
whom such consideration would otherwise have been paid.
(i) Lost,
Stolen or Destroyed Certificates.
In the
event any Certificates shall have been lost, stolen or destroyed, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed Certificates,
upon the making of an affidavit of that fact by the holder thereof, such shares
of Company Common Stock as may be required pursuant to Section
2.1(a)
or
2.1(d),
cash in
lieu of fractional shares pursuant to Section
2.1(g)
and any
dividends or distributions payable pursuant to Section
2.2(c);
provided, however, that the Company may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver an agreement of indemnification in form
reasonably satisfactory to the Company, or a bond in such sum as the Company
may
reasonably direct as indemnity, against any claim that may be made against
the
Company or the Exchange Agent in respect of the Certificates alleged to have
been lost, stolen or destroyed.
Without
limiting the generality of the foregoing, the Company and the Exchange Agent
shall have the right to require any Person to pay to the Company and the
Exchange Agent, as the case may be, an amount of cash equal to the withholding
Tax imposed with respect to such Person as the result of a transaction in this
Agreement prior to, and as a condition to, the transfer to such Person of the
Merger Consideration or other applicable consideration.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations
and Warranties of GigOptix.
Except
as disclosed in the disclosure schedule dated as of the date of this Agreement
and executed and delivered by GigOptix to Lumera concurrently with or prior
to
the execution and delivery by GigOptix of this Agreement, which shall make
reference to the particular section or subsection of this Agreement to which
exception is being taken (it being agreed that any information set forth in
one
section of such disclosure schedule shall be deemed to apply to each other
section thereof to which its relevance is reasonably apparent on its face)
(the
“GigOptix
Disclosure Schedule”)),
GigOptix (including for purposes of representations as of a date prior to July
1, 2007, the “Predecessor
Company”)
represents and warrants to Lumera as follows:
13
(a) Organization,
Standing and Corporate Power; Organizational Documents;
Subsidiaries.
(i) Organization,
Standing and Corporate Power.
Each of
the Predecessor Company, GigOptix and its Subsidiaries is a limited liability
company or other legal entity duly organized, validly existing and in good
standing (with respect to jurisdictions which recognize such concept) under
the
laws of the jurisdiction in which it is organized and has the requisite
corporate (or similar) power and authority to own, lease and operate its
properties and to carry on its business as currently conducted, except for
those
jurisdictions in which the failure to have such power, authority or government
approvals and to be so organized, existing or in good standing would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect (as defined in Section
8.3(s))
on the
Predecessor Company, GigOptix and its Subsidiaries, taken as a whole. Each
of
the Predecessor Company, GigOptix and its Subsidiaries is duly qualified or
licensed to do business and is in good standing (with respect to jurisdictions
which recognize such concept) in each jurisdiction in which the nature or
conduct of its business or the ownership, leasing or operation of its properties
makes such qualification, licensing or good standing necessary, except for
those
jurisdictions where the failure to be so qualified or licensed or to be in
good
standing would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect on the Predecessor Company, GigOptix
and its Subsidiaries, taken as a whole.
(ii) Charter
Documents.
GigOptix has delivered or made available to Lumera complete and correct copies
of (A) the Operating Agreement of GigOptix (including all schedules thereto),
as
amended and currently in effect (the “GigOptix
Operating Agreement”
and,
collectively with all other governing documents of GigOptix the “GigOptix
Organizational Documents”)
and (B)
the limited liability agreements or like organizational documents of the
Predecessor Company and each Subsidiary of GigOptix, as amended and currently
in
effect (collectively, the “GigOptix
Subsidiary Organizational Documents”),
and
each such instrument is in full force and effect. GigOptix has made available
to
Lumera complete and accurate minute books of the Predecessor Company, GigOptix
and its Subsidiaries, except for documents with respect to consideration and/or
approval of the transactions contemplated hereby.
(iii) Subsidiaries.
Section
3.1(a)(iii)
of the
GigOptix Disclosure Schedule lists each of the Subsidiaries of GigOptix,
including the name of each such entity, the state or jurisdiction of its
incorporation or organization and GigOptix’s direct or indirect interest
therein. All the outstanding shares of capital stock of, or other equity
interests in, each Subsidiary of GigOptix have been validly issued and are
fully
paid and, with respect to the corporate Subsidiaries of GigOptix, nonassessable
and are owned directly or indirectly by GigOptix, free and clear of all
mortgages, pledges, claims, restrictions, infringements, liens, charges,
encumbrances and security interests and claims of any kind or nature whatsoever
(collectively, “Liens”)
and
free of any other restriction (including preemptive and similar rights and
any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests).
14
(b) Capital
Structure.
(i) All
outstanding GigOptix Membership Units are held by the Predecessor Company.
4,600,000 GigOptix units are reserved for issuance in respect of outstanding
options (the “GigOptix
Options”)
pursuant to the GigOptix LLC Equity Incentive Plan (the “GigOptix
Plan”).
All
outstanding GigOptix Membership Units are, and all membership interests which
may be issued pursuant to the GigOptix Plan will be, when issued against payment
therefore in accordance with the terms thereof, duly authorized, validly issued,
fully paid, nonassessable and free of preemptive rights.
(ii) Except
as
set forth on Section 3.1(b)(ii) of the GigOptix Disclosure Schedule, no bonds,
debentures, notes or other evidences of indebtedness having, or exercisable,
convertible or exchangeable for or into other securities having, the right
to
vote on any matters on which members of GigOptix may vote (the “GigOptix
Voting Debt”)
are
issued or outstanding as of the date of this Agreement, and all such GigOptix
Voting Debt will be converted prior to the Effective Time into the number of
GigOptix Membership Units set forth next to the description of such GigOptix
Voting Debt on Schedule
3.1(b)(ii).
(iii) As
of the
date of this Agreement, except as set forth in Section
3.1(b)(iii)
of the
GigOptix Disclosure Schedule, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Predecessor Company, GigOptix or any of its Subsidiaries is a party
or
by which any of them is bound obligating GigOptix or any of its Subsidiaries
to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
membership interests, shares of capital stock, GigOptix Voting Debt or other
voting securities of GigOptix or any of its Subsidiaries, or obligating GigOptix
or any of its Subsidiaries to issue, grant, extend or enter into any such
interest, security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. All outstanding GigOptix Membership Units and all
outstanding GigOptix Options and all outstanding membership interests of each
Subsidiary of GigOptix have been issued and granted in compliance in all
material respects with (A) all applicable securities laws and all other
Applicable Laws and (B) all requirements set forth in applicable material
Contracts (as defined in Section
8.3(i)).
(iv) Neither
GigOptix nor any of its Subsidiaries is a party to any currently effective
agreement (A) restricting the purchase or transfer of, (B) relating to the
voting of, (C) requiring the repurchase, redemption or disposition of, or
containing any right of first refusal with respect to, (D) requiring
registration of or (E) granting any preemptive or antidilutive rights with
respect to any membership or ownership interests of GigOptix or any of its
Subsidiaries or any securities of the type referred to in Section
3.1(b)(iii).
(v) Neither
the Predecessor Company, GigOptix nor any of its Subsidiaries owns any shares
of
capital stock of Lumera or any of its Subsidiaries.
(c) Authority;
Board Approval; Voting Requirements; No Conflict; Required Filings and
Consents.
15
(i) Authority.
GigOptix has all requisite power and authority to enter into this Agreement,
to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation by GigOptix of the transactions contemplated hereby have been
duly
and validly authorized by all necessary corporate action on the part of
GigOptix, and no other corporate proceedings on the part of GigOptix and no
votes of GigOptix members are necessary for GigOptix to authorize this Agreement
or to consummate the transactions contemplated hereby, other than, with respect
to the adoption of this Agreement and approval of the GigOptix Merger and the
other transactions contemplated hereby, the approval of the Company Charter
and
the approval of the New Equity Plan, the GigOptix Member Approval and the filing
of the GigOptix Certificate of Merger with the Secretary of State of the State
of Idaho. This Agreement has been duly executed and delivered by GigOptix.
Assuming the due authorization, execution and delivery of this Agreement by
Lumera, the Company, Merger Sub G and Merger Sub L, this Agreement constitutes
the legal, valid and binding obligation of GigOptix, enforceable against
GigOptix in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
the rights and remedies of creditors generally and to general principles of
equity (regardless of whether considered in a proceeding in equity or at law)
(collectively, “Creditors’
Laws”).
(ii) Board
Approval.
The
Board of Directors of GigOptix has (A) determined that this Agreement and
the transactions contemplated hereby are advisable and fair to and in the best
interests of GigOptix and its members, (B) duly approved this Agreement and
the
transactions contemplated hereby, which approval has not been rescinded or
modified and (C) recommended this Agreement and the transactions contemplated
hereby to its members for adoption and approval.
(iii) No
Conflict.
The
execution and delivery of this Agreement does not, and the consummation by
GigOptix of the transactions contemplated hereby and compliance by GigOptix
with
the provisions hereof will not, violate any provision of law, or any order,
judgment or decree of any Governmental Entity, conflict with, result in any
violation or breach of or default (with or without notice or lapse of time,
or
both) under, require any consent, waiver or approval under, give rise to any
right of termination or cancellation or acceleration of any right or obligation
or loss of a benefit under, or result in the creation of any Lien upon any
of
the properties or assets of GigOptix or any of its Subsidiaries or any
restriction on the conduct of GigOptix ‘s business or operations under (A) the
GigOptix Organizational Documents or the GigOptix Subsidiary Organizational
Documents, (B) subject to the governmental filings and other matters referred
to
in Section
3.1(c)(iv),
any
Contract to which the Predecessor Company, GigOptix or any Subsidiary of
GigOptix is a party or any GigOptix Licenses or Permits (as defined in
Section
3.1(g)(i))
or (C)
subject to the governmental filings and other matters referred to in
Section
3.1(c)(iv),
any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Predecessor Company, GigOptix or any of its Subsidiaries or their
respective properties or assets, other than, in the case of clauses (B) and
(C)
above, any such conflicts, violations, defaults, rights, losses, restrictions
or
Liens, or failure to obtain consents, waivers or approvals, which, individually
or in the aggregate, would not have, or reasonably be expected to have a
Material Adverse Effect on GigOptix and its Subsidiaries, taken as a
whole.
(iv) Required
Filings or Consents.
No
consent, waiver, order, authorization or approval of any Governmental Entity,
and no declaration or notice to or filing or registration with any Governmental
Entity or any other Person is required to be made, obtained, performed or given
with respect to the Predecessor Company, GigOptix or any of its Subsidiaries
in
connection with the execution and delivery of this Agreement by GigOptix or
the
consummation by GigOptix of the transactions contemplated hereby or thereby,
except for:
16
(A) the
filing of the GigOptix Certificate of Merger with the Secretary of State of
the
State of Idaho and the Lumera Certificate of Merger with the Secretary of State
of the State of Delaware and appropriate documents with NASDAQ and the relevant
authorities of other states in which GigOptix is qualified to do business,
such
filings as may be necessary in accordance with state securities or other
“blue
sky”
laws,
and such filings as may be necessary to record or perfect security interests
or
mortgages in personal or real property;
(B) the
GigOptix Member Approval and the delivery of documents or information to the
GigOptix Member as may be required by Idaho law in connection
therewith;
(C) the
consents, waivers, approvals, orders or authorizations set forth in Section
3.1(c)(iv)(C) of the GigOptix Disclosure Schedule;
(D) the
filing with the SEC of:
(1) The
Form
S-4 (as defined in Section
3.1(e)),
including the Proxy Statement; and
(2) such
reports and filings under Section 12(b), 13(a), 13(d), 15(d) or 16(a) of the
Exchange Act and the rules and regulations thereunder as may be required in
connection with this Agreement and the transactions contemplated hereby;
and
(E) any
consent, waiver, approval, order or authorization of, or declaration,
registration or filing with, or notice to any Governmental Entity (other than
any of the foregoing addressed in clauses (A) through (D) above), the failure
of
which to be made or obtained, individually or in the aggregate, would not have,
or reasonably be expected to have a Material Adverse Effect on GigOptix and
its
Subsidiaries, taken as a whole.
(v) Independent
Directors.
As of
the date of this Agreement, assuming the consummation as of such date of the
Mergers and the other transactions contemplated hereby in accordance with the
terms hereof, the individual listed in Exhibit
3.1(c)(v)
attached
hereto would qualify as an Independent Director and, with respect to the
Company, would be considered to be an independent director within the meaning
of
Rule 10A-3(b)(1) under the Exchange Act.
(d) Financial
Statements.
Neither
GigOptix nor any of its Subsidiaries is subject to the periodic reporting
requirements of the Exchange Act.
(i) Attached
hereto as Schedule
3.1(d)(i)
are true
and complete copies of the unaudited consolidated balance sheet of GigOptix
as
of December 31, 2007 and the related unaudited statements of income and cash
flows for the two quarters ended as of December 31, 2007 (the “GigOptix
Financial Statements”).
The
GigOptix Financial Statements have been prepared and the Prospective GigOptix
Financial Statements (as defined in Section
4.1(c))
will be
prepared from the books and records of GigOptix, and the GigOptix Financial
Statements fairly present and the Prospective GigOptix Financial Statements
will
fairly present the consolidated financial position, results of operations and
cash flows of GigOptix as of the dates and for the periods indicated (subject
to
normal year-end audit adjustments and the lack of footnote disclosure). The
financial books and records of GigOptix are true and correct in all material
respects. There has been no change in GigOptix accounting policies from January
1, 2007 through the date hereof except as described in the notes to the
financial statements included in the GigOptix Financial Statements or the
Prospective GigOptix Financial Statements.
17
(ii) Except
as
set forth in Section
3.1(d)(ii)
of the
GigOptix Disclosure Schedule, neither GigOptix nor any of its Subsidiaries
has
any liabilities or obligations, other than liabilities or obligations (i)
reflected or reserved against in the balance sheet of GigOptix as of December
31, 2007 (including the notes thereto, the “GigOptix
Balance Sheet”),
(ii)
reflected or reserved against on the balance sheet of the Predecessor Company
as
of December 31, 2007, and (iii) incurred since December 31, 2007 in the ordinary
course of business, consistent with past practice.
(e) Information
Supplied.
None of
the information supplied or to be supplied by or on behalf of GigOptix for
inclusion or incorporation by reference in the registration statement on Form
S-4 to be filed with the Securities and Exchange Commission (the “SEC”)
by the
Company in connection with the registration and issuance of Company Common
Stock
to GigOptix members and Lumera stockholders in the Mergers (including any
amendments or supplements thereto, the “Form
S-4”)
or the
proxy statement relating to the Lumera Stockholders’ Meeting and prospectus
relating to the registration and issuance of shares of Company Common Stock
to
Lumera stockholders and GigOptix members in the Mergers (the “Proxy
Statement”)
shall,
in the case of the Form S-4, at the time the Form S-4 becomes effective under
the Securities Act of 1933, as amended (the “Securities
Act”),
or,
in the case of the Proxy Statement, at the date it is first mailed to the Lumera
stockholders or at the time of the Lumera Stockholders’ Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
Notwithstanding the foregoing provisions of this Section 3.1(e), no
representation or warranty is made by GigOptix with respect to information
or
statements made or incorporated by reference in the Form S-4 or the Proxy
Statement which were not supplied in writing by or on behalf of
GigOptix.
(f) Absence
of Certain Changes or Events.
Since
December 31, 2007, except as contemplated by or as disclosed in this Agreement
(including the GigOptix Disclosure Schedule), GigOptix has conducted its
business only in the ordinary course and in a manner consistent with past
practice and, since such date, there has not been a Material Adverse Effect
on
GigOptix, nor any action that, if taken after the date hereof, would constitute
a breach of Section
4.1(a).
(g) Compliance
with Applicable Laws; Permits; Litigation.
(i) GigOptix,
its Subsidiaries and their respective employees hold all authorizations,
permits, licenses, certificates, easements, concessions, franchises, variances,
exemptions, orders, consents, registrations and approvals of all Governmental
Entities which are required for GigOptix and its Subsidiaries to own, lease
and
operate their properties and other assets and to carry on their respective
businesses as they are being conducted as of the date hereof (collectively,
the
“GigOptix
Licenses or Permits”),
and
all GigOptix Licenses or Permits are valid and in full force and effect, except
where the failure to have, or the suspension or cancellation of, or the failure
to be valid or in full force and effect of, any such GigOptix Licenses or
Permits, individually or in the aggregate, would not have, or reasonably be
expected to have a Material Adverse Effect on GigOptix and its Subsidiaries,
taken as a whole.
18
(ii) GigOptix
and its Subsidiaries are, and have been at all times since January 1, 2007,
in
compliance with the terms of the GigOptix Licenses or Permits and all laws,
statutes, orders, rules, regulations, policies or guidelines promulgated, or
judgments, decisions or orders entered by any Governmental Entity (all such
laws, statutes, orders, rules, regulations, policies, guidelines, judgments,
decisions and orders, collectively, “Applicable
Laws”)
relating to GigOptix and its Subsidiaries or their respective businesses, assets
or properties, except where the failure to be in compliance with the terms
of
the GigOptix Licenses or Permits or such Applicable Laws, individually or in
the
aggregate, would not have, or reasonably be expected to have a Material Adverse
Effect on GigOptix and its Subsidiaries, taken as a whole. Since January 1,
2007, neither GigOptix nor any of its Subsidiaries has received any written
notification from any Governmental Entity (A) asserting that GigOptix or any
of
its Subsidiaries is not in compliance with, or at any time since such date
has
failed to comply with Applicable Laws (except for any such lack of compliance
which, individually or in the aggregate, would not have, or reasonably be
expected to have a Material Adverse Effect on GigOptix and its Subsidiaries,
taken as a whole) or (B) threatening to revoke any GigOptix Licenses or Permits
(except for any such revocation which, individually or in the aggregate, would
not have, or reasonably be expected to have a Material Adverse Effect on
GigOptix and its Subsidiaries, taken as a whole) nor, to the Knowledge of
GigOptix, does any basis exist therefor. As of the date hereof, no investigation
or review by any Governmental Entity is pending or, to the Knowledge (as defined
in Section
8.3(o))
of
GigOptix, has been threatened in writing against GigOptix or any of its
Subsidiaries which, individually or in the aggregate, would have, or reasonably
be expected to have a Material Adverse Effect on GigOptix and its Subsidiaries,
taken as a whole.
(iii) No
action, audit, demand, claim, suit, proceeding, requirement or investigation
by
any Governmental Entity, and no suit, action, mediation, arbitration or
proceeding by any Person, against or affecting the Predecessor Company, GigOptix
or any of its Subsidiaries or any of their respective properties, including
Intellectual Property (as defined in Section
8.3(n))
set
forth on Section
3.1(m)(i)
of
the GigOptix Disclosure Schedule, is pending or, to the Knowledge of GigOptix,
threatened which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect on the Predecessor Company, GigOptix and
its
Subsidiaries, taken as a whole.
(iv) Neither
the Predecessor Company, GigOptix nor any of its Subsidiaries is, or at any
time
since January 1, 2007 has been, subject to any outstanding order, injunction
or
decree which, individually or in the aggregate, has had or would reasonably
be
expected to have a Material Adverse Effect on GigOptix and its Subsidiaries,
taken as a whole.
(v) No
material GigOptix Licenses or Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the transactions contemplated by
this Agreement, provided
that the
notices and approvals set forth in Section
3.1(c)(iv)(C)of
the
GigOptix Disclosure Schedule have been given or received, as
appropriate.
19
(h) Labor
and Other Employment Matters.
Neither
GigOptix nor any of its Subsidiaries is a party to, or bound by, any collective
bargaining agreement. Except as would not have, or reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on GigOptix
and its Subsidiaries, taken as a whole: (i) GigOptix and its Subsidiaries are
in
compliance in all material respects with all Applicable Laws respecting
employment and employment practices and terms and conditions of employment;
(ii)
neither GigOptix nor any of its Subsidiaries has received written notice of
any
charge or complaint against GigOptix or any of its Subsidiaries pending before
the Equal Employment Opportunity Commission, the National Labor Relations Board,
or any other Governmental Entity regarding an unlawful employment practice;
(iii) there is no labor strike, lockout, slowdown or stoppage pending or, to
the
Knowledge of GigOptix, threatened or being carried out against GigOptix or
its
Subsidiaries; and (iv) neither GigOptix nor any of its Subsidiaries has received
written notice that any representation or certification petition respecting
the
employees of GigOptix or its Subsidiaries has been filed with the National
Labor
Relations Board or analogous Governmental Entity.
(i) Benefit
Plans.
(i) For
purposes of this Agreement, “Employee
Benefit Plan”
means
any plan, program, agreement, policy or arrangement, whether or not reduced
to
writing, and whether covering a single individual or a group of individuals,
that is (a) a welfare plan within the meaning of Section 3(1) of the Employment
Retirement Income Security Act of 1974, as amended (“ERISA”),
(b) a
pension benefit plan within the meaning of Section 3(2) of ERISA, (c) a stock
bonus, stock purchase, stock option, restricted stock, stock appreciation right
or similar equity-based plan (d) a material employment agreement, consulting
agreement, retention, termination or severance agreement or (e) any other
deferred-compensation, retirement, welfare-benefit, bonus, incentive or
fringe-benefit plan, program or arrangement.
(ii) Section
3.1(i)(ii)of
the
GigOptix Disclosure Schedule lists all Employee Benefit Plans as to which
GigOptix or any of its Subsidiaries sponsors, maintains, contributes or is
obligated to contribute, or under which GigOptix or any of its Subsidiaries
has
or may have any liability, or which benefits any current or former employee,
director, consultant or independent contractor of GigOptix or any of its
Subsidiaries or the beneficiaries or dependents of such person (each a
(“GigOptix
Benefit Plan”)).
With
respect to each GigOptix Benefit Plan, GigOptix has furnished or made available
to Lumera true, accurate and complete copies of (i) the GigOptix Benefit Plans
and all amendments thereto (or where a GigOptix Benefit Plan has not been
reduced to writing, a summary of all material terms of the GigOptix Benefit
Plan); (ii) any GigOptix Benefit Plan’s summary plan description, employee
handbooks or similar employee communications, and any material modifications
thereto; (iii) if applicable, any trust agreements, custodial agreements,
insurance policies, administrative agreements and similar agreements, and
investment management or investment advisory agreements, (iv) in the case of
any
GigOptix Benefit Plan for which Forms 5500 are required to be filed, the three
most recent annual reports (Series 5500 and all schedules thereto) in connection
with each GigOptix Benefit Plan; (v) in the case of any GigOptix Benefit Plan
that is intended to be qualified under Section 401(a) of the Code, the most
recent IRS determination letter and any related correspondence, and any pending
request for such determination.
20
(iii) With
respect to the GigOptix Benefit Plans, no event has occurred, and there exists
no condition or set of circumstances, which has or would reasonably be expected
to have a Material Adverse Effect on GigOptix and its Subsidiaries, taken as
a
whole. Neither GigOptix nor any of its Subsidiaries nor, to the Knowledge of
GigOptix, any other Person, has any express commitment, whether legally
enforceable or not, to modify, change or terminate any GigOptix Benefit Plan,
other than with respect to a modification, change or termination required by
ERISA or the Code or any other Applicable Law or administrative changes that
do
not increase the liabilities or obligations under any such plans.
(iv) Neither
GigOptix nor any of its Subsidiaries ever maintained, contributed to or had
any
obligation to contribute to any benefit plan subject to Title IV or Section
412
of the Code.
(v) None
of
the GigOptix Benefit Plans has ever been a multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA (a “Multiemployer
Plan”);
and
neither the Company nor any of its Subsidiaries has ever contributed to or
been
obligated to contribute to any Multiemployer Plan or otherwise has any Liability
under or with respect to any Multiemployer Plan.
(vi) With
respect to each GigOptix Benefit Plan: (i) each GigOptix Benefit Plan intended
to be "qualified" within the meaning of Section 401(a) of the Code is so
qualified; (ii) each of GigOptix and its Subsidiaries has performed all
obligations required to be performed by it under such plan, and such plan has
been established, maintained, administered and operated in accordance with
its
terms and Applicable Laws, including but not limited to ERISA and the Code;
(iii) nothing has occurred that has subjected or could subject GigOptix or
any
of its Subsidiaries to a penalty under Section 502 of ERISA or to an excise
tax
under the Code, or that has subjected or could subject any participant in,
or
beneficiary of, a GigOptix Benefit Plan to a tax under Section 4973 of the
Code;
(iv) no non-exempt "prohibited transaction" within the meaning of Section 4975
of the Code or Section 406 of ERISA has occurred that would result in Liability
to the Company; (v) there are no inquiries or proceedings pending or, to the
Knowledge of the Company, threatened by the Internal Revenue Service or
Department of Labor; (vi) to the Knowledge of the Company, the Company is not
subject, directly or indirectly pursuant to any indemnification agreement,
to
any penalty or tax under Section 502(i) of ERISA or Section 4975 through
4980 of the Code.
(vii) As
of the
date hereof, to the Knowledge of GigOptix, no oral or written representation
or
commitment with respect to any material aspect of any GigOptix Benefit Plan
has
been made to an employee or former employee of GigOptix or any of its
Subsidiaries by an authorized GigOptix employee that is not materially in
accordance with the written or otherwise pre-existing terms and provisions
of
such GigOptix Benefit Plan.
(viii) There
are
no material unresolved claims or disputes under the terms of, or in connection
with, any GigOptix Benefit Plan (other than routine claims for benefits), and
no
action, legal or otherwise, has been commenced or, to the Knowledge of GigOptix,
threatened or anticipated with respect to any material claim or otherwise in
connection with a GigOptix Benefit Plan.
21
(ix) No
GigOptix Benefit Plan provides health benefits (whether or not insured) with
respect to employees or former employees of GigOptix or any of its Subsidiaries
after retirement or other termination of service, other than coverage mandated
by Applicable Law or benefits the full cost of which is borne by the employee
or
former employee.
(x) Neither
the negotiation and execution of this Agreement nor the consummation of the
transactions contemplated hereby shall (either alone or upon the occurrence
of
any additional or subsequent events) constitute an event under any GigOptix
Benefit Plan that will or may result in any payment (whether of severance pay
or
otherwise), acceleration of payment, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with respect
to any employee or former employee of GigOptix or any of its Subsidiaries or
limit the ability to amend or terminate any GigOptix Benefit Plan or related
trust. There is no contract, agreement, plan or arrangement with an employee
or
former employee of GigOptix to which GigOptix or any of its Subsidiaries is
a
party as of the date of this Agreement that, individually or collectively and
as
a result of the transactions contemplated hereby (whether alone or upon the
occurrence of any additional or subsequent events) would give rise to the
payment of any amount that would not be deductible pursuant to Section 280G
of
the Code.
(xi) None
of
the GigOptix Benefit Plans is, or within the last six years, has been (i) the
subject of an examination or audit by a Governmental Body, (ii) the subject
of
an application or filing under, or (iii) a participant in, a
government-sponsored amnesty, voluntary compliance, self-correction or similar
program.
(xii) Each
GigOptix Benefit Plan that is a “nonqualified deferred compensation plan”
subject to Section 409A of the Code has been operated in good faith compliance
with Section 409A of the Code and guidance of the IRS provided
thereunder.
(xiii) Neither
GigOptix nor any of its Subsidiaries have or has ever had any funding
arrangement intended to qualify as a VEBA under Section 501(c)(9) of the
Code.
(xiv) To
the
extent that GigOptix and/or its Subsidiaries has persons who are providing
services for the GigOptix or its Subsidiaries, whether directly or through
a
leasing organization, as independent contractors, such persons are appropriately
classified, and the Company has no liability (contingent or otherwise) for
failure to classify independent contractors as employees.
(xv) Without
limiting the generality of (ii) through (xiv) above, with respect to each
GigOptix Benefit Plan that is subject to the laws of a jurisdiction other than
the United States (whether or not United States law also applies) (a
“Foreign
Benefit Plan”):
(i)
all employer and employee contributions to each Foreign Benefit Plan required
by
Law or by the terms of such Foreign Benefit Plan have been made, or if
applicable, accrued in accordance with normal accounting practices; (ii) the
fair market value of the assets of each funded Foreign Benefit Plan, the
liability of each insurer for any Foreign Benefit Plan funded through insurance
or the book reserve established for any Foreign Benefit Plan, together with
any
accrued contributions is sufficient to procure or provide for the accrued
benefit obligations, as of the date of this Agreement, with respect to all
current and former participants in such plan according to reasonable actuarial
assumptions and no transaction contemplated by this Agreement shall cause such
assets, reserve or insurance obligations to be less than such benefit
obligations, and (iii) each Foreign Benefit Plan required to be registered
has
been registered and has been maintained in good standing with applicable
regulatory authorities.
22
(j) Taxes.
(i) Each
of
GigOptix, its Subsidiaries and a Person that includes GigOptix’s income on its
Tax Return has (A) duly and timely filed (or there have been filed on its
behalf) all income and material non-income Tax Returns (as defined in
Section
3.1(j)(xi))
required to be filed by it with the appropriate Tax Authority (as defined in
Section
3.1(j)(xi))
and all
such Tax Returns are true, correct and complete in all material respects, (B)
timely paid (or there has been paid on its behalf) in full all income and
material non-income Taxes due and owing by it, (C) made adequate provision
in
accordance with GAAP (or provision has been made on its behalf) for the payment
of all income and material non-income Taxes not yet due and (D) complied with
all Applicable Laws relating to the payment and reporting of withholding Taxes
and employment Taxes.
(ii) There
are
no material Liens for Taxes upon any property or assets of GigOptix or any
of
its Subsidiaries, except for Liens for Taxes not yet due and
payable.
(iii) There
is
no audit, examination, refund litigation, proposed adjustment, matter in
controversy or other dispute with respect to any Taxes or Tax Return of
GigOptix, any of its Subsidiaries or a Person that includes GigOptix’s income on
its Tax Return. Neither GigOptix, nor any of its Subsidiaries, nor a Person
that
includes GigOptix’s income on its Tax Return has received written notice of any
claim made by a Governmental Entity in a jurisdiction where GigOptix, any of
its
Subsidiaries or such a Person, as applicable, does not file a Tax Return, that
GigOptix, such Subsidiary or such a Person is or may be subject to taxation
by
that jurisdiction.
(iv) There
are
no outstanding requests, agreements, consents or waivers to extend the statutory
period of limitations applicable to the assessment of any Taxes or deficiencies
against GigOptix or any of its Subsidiaries.
(v) Neither
GigOptix nor any of its Subsidiaries is a party to any agreement providing
for
the allocation, indemnification or sharing of, or related to, Taxes (other
than
any agreements solely between or among GigOptix and its Subsidiaries), and
neither GigOptix nor any of its Subsidiaries (A) has been a member of an
affiliated group (or similar state, local or foreign filing group) filing a
consolidated income Tax Return or (B) has any liability for the Taxes of any
Person under Treasury Regulation § 1.1502-6 (or any similar provision of state,
local or foreign law), as a transferee or successor, by contract or
otherwise.
(vi) Neither
GigOptix nor any of its Subsidiaries has (A) agreed to make nor is it required
to make any material adjustment under Section 481(a) of the Code by reason
of a
change in accounting method or otherwise; or (B) constituted either a “distributing
corporation”
or
a
“controlled
corporation”
(within
the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
intended to qualify for tax-free treatment under Section 355 of the Code (x)
in
the two years prior to the date of this Agreement or (y) in a distribution
which
could otherwise constitute part of a “plan”
or
“series
of
related transactions”
(within
the meaning of Section 355(e) of the Code) in connection with the
Mergers.
23
(vii) GigOptix,
assuming it were a corporation, is not, and has not been, a United States real
property holding corporation (as defined in Section 897(c)(2) of the Code)
during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
(viii) No
closing agreements, private letter rulings, technical advice memoranda or
similar agreements or rulings have been entered into or issued by any Tax
Authority with respect to GigOptix or any of its Subsidiaries within five years
of the date of this Agreement, and no such agreement or ruling has been applied
for and is currently pending.
(ix) Neither
GigOptix nor any of its Subsidiaries has entered into a “listed
transaction”
within
the meaning of Treasury Regulation § 1.6011-4(b)(2).
(x) Each
of
GigOptix and its Subsidiaries is treated as a disregarded entity under Section
7701 of the Code and, to the extent possible, for all state and local Tax
purposes.
(xi) For
the
purposes of this Agreement: “Tax”
or
“Taxes”
means
(i) any and all federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar, including FICA),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind or any charge of any kind in the nature of (or similar
to) taxes whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not and (ii) any liability for the payment of any amounts
of
the type described in clause (i) of this definition as a result of being a
member of an affiliated, consolidated, combined or unitary group for any period,
as a result of any tax sharing or tax allocation agreement, arrangement or
understanding, or as a result of being liable for another person’s taxes as a
transferee or successor, by contract or otherwise;
“Tax
Authority”
means
the IRS and any other domestic or foreign Governmental Entity responsible for
the administration or collection of any Taxes; and “Tax
Return”
means
any return, report or similar statement (including the attached schedules)
required to be filed with respect to Taxes, including any information return,
claim for refund, amended return, or declaration of estimated
Taxes.
(k) Affiliate
Transactions.
(i) As
of the
date of this Agreement, (A) there are no currently effective transactions,
arrangements or Contracts between GigOptix and its Subsidiaries, on the one
hand, and its Affiliates (as defined in Section
8.3(a))
(other
than its wholly-owned Subsidiaries) or other Persons, on the other hand, that
would be required to be disclosed under Item 404 of Regulation S-K under the
Securities Act, assuming GigOptix was subject to such regulation, and (B)
GigOptix is not subject to any binding obligations with respect to any such
transactions, arrangements or Contracts.
24
(ii) There
are
no personal loans, within the meaning of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
(“SOX”),
outstanding pursuant to which GigOptix or any of its Subsidiaries has extended
credit to any executive officer or director of GigOptix or any of its
Subsidiaries that will not be paid back prior to the Effective
Time.
(l) Environmental
Matters.
(i) Except
as
would not, individually or in the aggregate, have or reasonably be expected
to
have a Material Adverse Effect on GigOptix and its Subsidiaries, taken as a
whole: (i) the operations of GigOptix and its Subsidiaries are, and, except
for
matters that have been fully resolved with the applicable Governmental Entity,
at all times have been, in compliance with all applicable Environmental Laws
(as
defined in Section
8.3(j)),
including possession and compliance with the terms of all licenses, permits,
registrations, approvals, certifications and consents required by Environmental
Laws (“Environmental
Permits”);
(ii)
there are no pending or, to the Knowledge of GigOptix, threatened claims, suits,
governmental investigation requests, actions, investigations or proceedings
under or pursuant to Environmental Laws (“Environmental
Claims”)
against GigOptix or any of its Subsidiaries or involving any real property
currently owned, operated or leased or other sites at which Hazardous Materials
(as defined in Section
8.3(m))
were
disposed of, or allegedly disposed of, by GigOptix or any of its Subsidiaries;
and (iii) to the Knowledge of GigOptix, there are no pending or threatened
Environmental Claims involving any real property formerly owned, operated or
leased by GigOptix or any of its Subsidiaries.
(ii) GigOptix
and its Subsidiaries have furnished to Lumera copies of all environmental audits
and other material documents in their possession or under their control that
relate to the environmental condition of any real property currently or formerly
owned, operated or leased by GigOptix or any of its Subsidiaries or compliance
by GigOptix or any of its Subsidiaries with Environmental Laws.
(m) Intellectual
Property.
(i) Section
3.1(m)(i) of the GigOptix Disclosure Schedule sets forth a true and complete
list (in all material respects) of all patents and applications therefor,
registered trademarks and applications therefor, domain name registrations
and
copyright registrations (if any) that are owned by or licensed to GigOptix
or
its Subsidiaries.
(ii) Except
as
would not, individually or in the aggregate, have, or reasonably be expected
to
have a Material Adverse Effect on GigOptix and its Subsidiaries, taken as a
whole:
(A) all
Intellectual Property set forth on Section 3.1(m)(i) of the GigOptix Disclosure
Schedule is either (i) owned of record by GigOptix or a Subsidiary of GigOptix,
or (ii) is licensed to GigOptix or a Subsidiary of GigOptix and free and clear
of all Liens except Permitted Liens (as defined in Section 8.3(t)) for the
conduct of the business of GigOptix and/or its Subsidiaries as currently
conducted.
25
(B) to
the
Knowledge of GigOptix, except as set forth on Section
3.1(m)(ii)(B)
of the
GigOptix Disclosure Schedule, the conduct of the business and operations of
GigOptix and its Subsidiaries as currently conducted does not infringe or
otherwise conflict with, and as previously conducted has not infringed or
otherwise conflicted with, the rights of any Person in respect of any
Intellectual Property; no claim has been made, is pending, or, to the Knowledge
of GigOptix, is threatened that the conduct of the business and operations
of
GigOptix and its Subsidiaries as previously conducted and as currently conducted
violated or violates the asserted rights of any Person; and no licensing
requests or other demands or notices of any kind have been made to GigOptix
or
its Subsidiaries with respect to any Intellectual Property used by GigOptix
or
its Subsidiaries in their business or operations as previously conducted or
currently conducted;
(C) to
the
Knowledge of GigOptix, except as set forth on Section
3.1(m)(ii)(C)
of the
GigOptix Disclosure Schedule, none of the Intellectual Property set forth on
Section
3.1(m)(i)
of
the GigOptix Disclosure Schedule is being infringed or otherwise violated by
a
third Person, no claims, suits, arbitrations or other adversarial proceedings
have been brought or threatened against any Person by GigOptix or any of its
Subsidiaries, and none of the Intellectual Property set forth on Section
3.1(m)(i) of the GigOptix Disclosure Schedule is subject to any outstanding
order by or with any court, tribunal, arbitrator or other Governmental
Entity;
(D) GigOptix
and its Subsidiaries have taken all appropriate and timely actions reasonably
necessary to ensure full ownership (including by assignment from employees
where
appropriate and from other Persons performing services for GigOptix or any
its
Subsidiaries), protection and enforceability of all Intellectual Property set
forth on Section 3.1(m)(i) of the GigOptix Disclosure Schedule under any
Applicable Law (including by making and maintaining in full force and effect
all
necessary filings, registrations and issuances);
(E) GigOptix
and its Subsidiaries have taken all appropriate actions reasonably necessary
to
maintain the secrecy of all non-public Intellectual Property owned by GigOptix
and its Subsidiaries, including trade secrets, used in the business of GigOptix
and its Subsidiaries (including by requiring the execution of confidentiality
agreements by employees or any other Person to whom such Intellectual Property
has been made available).
(iii) The
consummation of the transactions contemplated by this Agreement will not result
in the loss or impairment of or payment of any additional amounts with respect
to the right of GigOptix or any of its Subsidiaries to own or use any
Intellectual Property set forth on Section
3.1(m)(i)
of
the GigOptix Disclosure Schedule, other than any such losses, impairments,
payments, conflicts, or failure to obtain consents, which, individually or
in
the aggregate, would not have, or reasonably be expected to have, a Material
Adverse Effect on GigOptix and its Subsidiaries, taken as a whole.
(n) Brokers.
No
broker, investment banker, financial advisor, intermediary or other Person
is
entitled to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of GigOptix.
26
(o) Contracts.
(i) Except
as
set forth in the appropriate section of Section 3.1(o)(i) of the GigOptix
Disclosure Schedule, as of the date of this Agreement, none of GigOptix nor
any
of its Subsidiaries is a party to or bound by any: (A) Contract that would
be
required to be filed by GigOptix with the SEC pursuant to Item 601(b) (1),
(2),
(4) or (10) of Regulation S-K under the Securities Act or Item 1.01 of Form
8-K
under the Exchange Act, assuming GigOptix was subject to such regulation or
such
statute; (B) Contract with respect to material partnerships, joint ventures,
acquisitions or dispositions; (C) Contract containing covenants of GigOptix
or
any of its Subsidiaries purporting to limit in any material respect any material
line of business, industry or geographical area in which GigOptix or its
Subsidiaries may operate or granting material exclusive rights to the
counterparty thereto; (D) Contract that, individually or in the aggregate with
other Contracts, would or would reasonably be expected to prevent, materially
delay or materially impede GigOptix’s ability to timely consummate the Mergers
or the other transactions contemplated by this Agreement; (E) indenture,
mortgage, loan, guarantee or credit Contract under which GigOptix or any
Subsidiary of GigOptix has outstanding indebtedness or any outstanding note,
bond, indenture or other evidence of indebtedness for borrowed money or
otherwise or any guaranteed indebtedness for money borrowed by others, in each
case, for or guaranteeing an amount in excess of $100,000, other than any such
indebtedness between GigOptix (whether as creditor or debtor) and any wholly
owned Subsidiary of GigOptix or between any wholly owned Subsidiaries of
GigOptix; or (F) Contract specifically concerning Intellectual Property (except
for (x) non-exclusive, commercially available, off-the-shelf software programs
for which GigOptix pays an annual fee under any individual Contract of less
than
$50,000, (y) Contracts with customers pursuant to which the customer and its
subsidiaries pay less than $250,000 annually under any individual Contract
and
(z) Contracts with data suppliers pursuant to which GigOptix and its
Subsidiaries pay fees under any individual Contract of less than $50,000
annually) that is material to the business of GigOptix and its Subsidiaries,
taken as a whole. Each such Contract described in clauses (A)-(F) is referred
to
herein as a “GigOptix
Material Contract.”
(ii) Each
of
the GigOptix Material Contracts is valid and binding on GigOptix and each of
its
Subsidiaries party thereto and, to the Knowledge of GigOptix, each other party
thereto and is in full force and effect, except for such failures to be valid
and binding or to be in full force and effect that, individually or in the
aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect on GigOptix and its Subsidiaries taken as a whole.
There
is no default under any GigOptix Material Contract either by GigOptix or any
of
its Subsidiaries party thereto or, to the Knowledge of GigOptix, by any other
party thereto, and no event has occurred that with notice or lapse of time
or
both would constitute a default thereunder by GigOptix or any of its
Subsidiaries party thereto or, to the Knowledge of GigOptix, any other party
thereto, in each case except as, individually or in the aggregate, have not
had,
and would not reasonably be expected to have, a Material Adverse Effect on
GigOptix and its Subsidiaries taken as a whole. Complete and correct copies
of
each GigOptix Material Contract (including any exhibits, annexes, attachments,
supplements, amendments or modifications thereto), have been delivered or made
available to Lumera prior to the date hereof.
27
(p) Real
Property.
Except
as would not have or reasonably be expected to have a Material Adverse Effect
on
GigOptix and its Subsidiaries, taken as a whole, GigOptix and its Subsidiaries
own (i) good and valid title to the Owned Real Property (as defined in
Section
8.3(t))
and
(ii) valid and enforceable leasehold interests with respect to the Leased Real
Property (as defined in Section
8.3(p)),
in
each case subject to Permitted Liens. Except in any such case as would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect on GigOptix and its Subsidiaries taken as a whole,
all
buildings, structures, fixtures and improvements with respect to the Owned
Real
Property and the Leased Real Property (the “Improvements”)
of
GigOptix and its Subsidiaries are in good repair and operating condition,
subject only to ordinary wear and tear, and are adequate and suitable for the
purposes for which they are presently being used or held for use, and to the
Knowledge of GigOptix, there are no facts or conditions affecting any of such
Improvements that, in the aggregate, would reasonably be expected to interfere
with the current use, occupancy or operation thereof.
(q) Tax-Free
Treatment.
None of
GigOptix, its Subsidiaries or its Affiliates has taken (or caused to be taken)
any action or knows of any fact, agreement, plan or other circumstance that
would reasonably be expected to prevent the Lumera Merger together with the
GigOptix Merger from qualifying as an integrated series of transfers qualifying
under Section 351 of the Code.
Section
3.2 Representations
and Warranties of Lumera.
Except
as disclosed in the disclosure schedule dated as of the date of this Agreement
and executed and delivered by Lumera to GigOptix concurrently with or prior
to
the execution and delivery by Lumera of this Agreement, which shall make
reference to the particular section or subsection of this Agreement to which
exception is being taken (it being agreed that any information set forth in
one
section of such disclosure schedule shall be deemed to apply to each other
section thereof to which its relevance is reasonably apparent on its face)
(the
“Lumera
Disclosure Schedule”))
or in
the Lumera SEC Documents (as defined in Section
3.2(d)(i)),
Lumera
represents and warrants to GigOptix as follows:
(a) Organization,
Standing and Corporate Power; Charter Documents; Subsidiaries.
(i) Organization,
Standing and Corporate Power.
Lumera
and each of its Subsidiaries is a corporation or other legal entity duly
organized, validly existing and in good standing (with respect to jurisdictions
which recognize such concept) under the laws of the jurisdiction in which it
is
incorporated or otherwise organized and has the requisite corporate (or similar)
power and authority to own, lease and operate its properties and to carry on
its
business as currently conducted, except for those jurisdictions in which the
failure to have such power, authority or government approvals and to be so
organized, existing or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Lumera
and its Subsidiaries, taken as a whole. Lumera and each of its Subsidiaries
is
duly qualified or licensed to do business as a foreign corporation or other
legal entity and is in good standing (with respect to jurisdictions which
recognize such concept) in each jurisdiction in which the nature or conduct
of
its business or the ownership, leasing or operation of its properties makes
such
qualification, licensing or good standing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or to be in
good
standing would not, individually or in the aggregate, have, or reasonably be
expected to have a Material Adverse Effect on Lumera and its Subsidiaries,
taken
as a whole.
28
(ii) Charter
Documents.
Lumera
has delivered or made available to GigOptix complete and correct copies of
(A)
the Restated Certificate of Incorporation of Lumera (including all certificates
of designation), as amended and currently in effect (the “Lumera
Charter”),
and
the Amended and Restated By-Laws of Lumera, as amended and currently in effect
(the “Lumera
By-Laws,”
and,
together with the Lumera Charter, the “Lumera
Organizational Documents”),
and
(B) the articles or certificate of incorporation and bylaws or like
organizational documents of each of the Subsidiaries of Lumera, including the
Company, Merger Sub G and Merger Sub L, as amended and currently in effect
(collectively, the “Lumera
Subsidiary Organizational Documents”),
and
each such instrument is in full force and effect. Lumera has made available
to
GigOptix complete and accurate minute books of Lumera and its Subsidiaries
except for documents with respect to consideration and/or approval of the
transactions contemplated hereby.
(iii) Subsidiaries.
Section
3.2(a)(iii)
of the
Lumera Disclosure Schedule lists each of the Subsidiaries of Lumera, including
the name of each such entity, the state or jurisdiction of its incorporation
or
organization and Lumera’s direct or indirect interest therein. All the
outstanding shares of capital stock of, or other equity interests in, each
Subsidiary of Lumera have been validly issued and are duly authorized, fully
paid and, with respect to the corporate Subsidiaries of Lumera, nonassessable
and are owned directly or indirectly by Lumera, free and clear of all Liens
and
free of any other restriction (including preemptive and similar rights and
any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests).
(b) Capital
Structure.
(i) The
authorized capital stock of Lumera consists of 120,000,000 shares of Lumera
Common Stock and 30,000,000 shares of Preferred Stock, par value $.01 per share
(“Lumera
Preferred Stock”).
At
the close of business on February 29, 2008, (A) 20,088,352 shares of Lumera
Common Stock (including all awards based on Lumera Common Stock that are
restricted stock granted under the Lumera Corporation 2004 Equity Incentive
Plan
(the “Lumera
Stock Plan”))
were
issued and outstanding; (B) no shares of Lumera Common Stock were held by Lumera
in its treasury; (C) no shares of Lumera Preferred Stock were issued and
outstanding; (D) 4,000,000 shares of Lumera Common Stock were reserved for
issuance in respect of outstanding options to acquire shares of Lumera Common
Stock granted under the Lumera Stock Plan (such outstanding options,
collectively with all other options to acquire shares of Lumera Common Stock
issued pursuant to the Lumera Stock Plan between the date hereof and the
Effective Time, the “Lumera
Options”);
and
(F) 1,636,000 shares of Lumera Common Stock reserved for issuance in respect
of
outstanding warrants to acquire shares of Lumera Common Stock (the “Lumera
Warrants”).
Each
outstanding share of capital stock of Lumera is duly authorized, validly issued,
fully paid, nonassessable and free of preemptive rights.
(ii) All
shares of Lumera Common Stock subject to issuance under the Lumera Stock Plan,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, shall be duly authorized, validly issued, fully
paid
and nonassessable and free of preemptive or similar rights.
29
(iii) No
bonds,
debentures, notes or other evidences of indebtedness having, or exercisable,
convertible or exchangeable for or into other securities having, the right
to
vote on any matters on which stockholders of Lumera may vote (“Lumera
Voting Debt“)
are
issued or outstanding as of the date of this Agreement.
(iv) As
of the
date of this Agreement, except as set forth in Section
3.2(b)(i)
of the
Lumera Disclosure Schedule, Section
3.2(b)(iii)
of the
Lumera Disclosure Schedule or as may be disclosed in the Lumera SEC Documents,
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Lumera or any
of
its Subsidiaries is a party or by which any of them is bound obligating Lumera
or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock, Lumera Voting Debt or
other voting securities of Lumera or any of its Subsidiaries, or obligating
Lumera or any of its Subsidiaries to issue, grant, extend or enter into any
such
security, option, warrant, call, right, commitment, agreement, arrangement
or
undertaking. All outstanding shares of Lumera Common Stock and Lumera Preferred
Stock, all outstanding Lumera Options and all outstanding shares of capital
stock of each Subsidiary of Lumera have been issued and granted in compliance
in
all material respects with (A) all applicable securities laws and all other
Applicable Laws and (B) all requirements set forth in applicable material
Contracts.
(v) Neither
Lumera nor any of its Subsidiaries is a party to any currently effective
agreement (A) restricting the purchase or transfer of, (B) relating to the
voting of, (C) requiring the repurchase, redemption or disposition of, or
containing any right of first refusal with respect to, (D) requiring
registration of or (E) granting any preemptive or antidilutive rights with
respect to any capital stock of Lumera or any of its Subsidiaries or any
securities of the type referred to in Section
3.2(b)(iv).
(vi) Each
of
the Company, Merger Sub G and Merger Sub L was formed at the direction of Lumera
prior to the date hereof, solely for the purposes of effecting the Mergers
and
the other transactions contemplated hereby. Except as required by or provided
for in this Agreement, each of the Company, Merger Sub G and Merger Sub L (A)
does not hold, nor has it held, any assets, (B) does not have, nor has it
incurred, any liabilities and (C) has not carried on any business activities
other than in connection with the Mergers and the transactions contemplated
hereby.
(vii) Neither
Lumera nor any of its Subsidiaries own any membership interests of GigOptix
or
any of its Subsidiaries.
(viii) Each
share of Company Common Stock to be issued in either the GigOptix Merger or
the
Lumera Merger shall be duly authorized, validly issued, fully paid and
non-assessable and free and clear of any Liens.
30
(c) Authority;
Board Approval; Voting Requirements; No Conflict; Required Filings and
Consents.
(i) Authority.
Each of
Lumera, the Company, Merger Sub G and Merger Sub L has all requisite corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Lumera, the Company, Merger Sub G and Merger
Sub L, and the consummation by Lumera, the Company, Merger Sub G and Merger
Sub
L of the transactions contemplated hereby, have been duly and validly authorized
by all necessary corporate action on the part of the Boards of Directors of
Lumera, the Company, Merger Sub G and Merger Sub L, and no other corporate
proceedings on the part of Lumera, the Company, Merger Sub G and Merger Sub
L
and no other stockholder votes or consents are necessary under the DGCL for
Lumera, the Company, Merger Sub G and Merger Sub L to authorize this Agreement,
to consummate the transactions contemplated hereby or to approve the other
matters being considered by stockholders of Lumera at the Lumera Stockholders’
Meeting, other than, with respect to adoption of this Agreement and approval
of
the Lumera Merger and the other transactions contemplated hereby and the
approval of the other matters being considered by stockholders of Lumera at
the
Lumera Stockholders’ Meeting and the filing of the Lumera Certificate of Merger
with the Secretary of State of the State of Delaware. This Agreement has been
duly executed and delivered by Lumera, the Company, Merger Sub G and Merger
Sub
L. Assuming the due authorization, execution and delivery of this Agreement
by
GigOptix, this Agreement constitutes a legal, valid and binding obligation
of
each of Lumera, the Company, Merger Sub G and Merger Sub L, enforceable against
Lumera, the Company, Merger Sub G and Merger Sub L, in accordance with its
terms, subject to Creditors’ Laws.
(ii) Board
Approval.
The
Board of Directors of Lumera has (A) determined that this Agreement and the
transactions contemplated hereby are advisable and fair to and in the best
interests of Lumera and its stockholders, (B) duly approved this Agreement
and
the transactions contemplated hereby, which approval has not been rescinded
or
modified, (C) resolved to recommend this Agreement and the transactions
contemplated hereby, the Company Charter and the New Equity Plan to its
stockholders for adoption and approval and (D) subject to Section
5.1(b),
directed that this Agreement and the transactions contemplated hereby, the
Company Charter and the New Equity Plan be submitted to Lumera’s stockholders
for consideration and adoption and approval at a duly held meeting of such
stockholders in accordance with this Agreement.
(iii) Voting
Requirements.
The
affirmative vote of holders of a majority in voting power of the shares of
Lumera Common Stock, voting together as a single class, is the only vote of
the
holders of any class or series of Lumera capital stock necessary to approve
and
adopt this Agreement and approve and consummate the transactions contemplated
hereby, and no other vote of the holders of any class or series of Lumera
capital stock is necessary to approve and adopt this Agreement and approve
and
consummate the transactions contemplated hereby. The affirmative vote of holders
of a majority in voting power of the outstanding shares of Lumera Common Stock
entitled to vote and voting together as a single class on the Company Charter
at
the Lumera Stockholders’ Meeting, is the only vote of the holders of any class
or series of Lumera capital stock necessary to approve the Company Charter
Amendment, and no other vote of the holders of any class or series of Lumera
capital stock is necessary to approve the Company Charter. The affirmative
vote
of holders of a majority in voting power of the shares of Lumera Common Stock,
voting together as a single class, present or represented and entitled to vote
on the New Equity Plan at the Lumera Stockholders’ Meeting, is the only vote of
the holders of any class or series of Lumera capital stock necessary to approve
the New Equity Plan, and no other vote of the holders of any class or series
of
Lumera capital stock is necessary to approve the New Equity Plan.
31
(iv) No
Conflict.
The
execution and delivery of this Agreement by Lumera, the Company, Merger Sub
G
and Merger Sub L (as applicable) do not, and the consummation by Lumera, the
Company, Merger Sub G and Merger Sub L (as applicable) of the transactions
contemplated hereby and compliance by Lumera, the Company, Merger Sub G and
Merger Sub L (as applicable) with the provisions hereof will not, violate any
provision of law, or any order, judgment or decree of any Governmental Entity,
conflict with, result in any violation or breach of or default (with or without
notice or lapse of time, or both) under, require any consent, waiver or approval
under, give rise to any right of termination or cancellation or acceleration
of
any right or obligation or loss of a benefit under, or result in the creation
of
any Lien upon any of the properties or assets of Lumera or any of its
Subsidiaries or any restriction on the conduct of Lumera’s business or
operations under, (A) the Lumera Organizational Documents or the Lumera
Subsidiary Organizational Documents, (B) subject to the governmental filings
and
other matters referred to in Section
3.2(c)(v),
any
Contract to which Lumera or any of its Subsidiaries is a party or Lumera
Licenses or Permits (as defined in Section
3.2(f)(i))
or (C)
subject to the governmental filings and other matters referred to in
Section
3.2(c)(v),
any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Lumera or any of its Subsidiaries or their respective properties or assets,
other than, in the case of clauses (B) and (C) above, any such conflicts,
violations, defaults, rights, losses, restrictions or Liens, or failure to
obtain consents, waivers or approvals, which, individually or in the aggregate,
would not have or reasonably be expected to have a Material Adverse Effect
on
Lumera and its Subsidiaries, taken as a whole.
(v) Required
Filings or Consents.
No
consent, waiver, order, authorization or approval of any Governmental Entity,
and no declaration or notice to or filing or registration with any Governmental
Entity or any other Person is required to be made, obtained, performed or given
with respect to Lumera or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by Lumera, the Company, Merger Sub
G or
Merger Sub L (as applicable) or the consummation by Lumera, the Company, Merger
Sub G or Merger Sub L (as applicable) of the transactions contemplated hereby,
except for:
(A) the
filing of the Lumera Certificate of Merger with the Secretary of State of the
State of Delaware and appropriate documents with NASDAQ and the relevant
authorities of other states in which Lumera, the Company, Merger Sub G or Merger
Sub L is qualified to do business, such filings as may be necessary in
accordance with state securities or other “blue
sky”
laws,
and such filings as may be necessary to record or perfect security interests
or
mortgages in personal or real property;
(B) the
Lumera Stockholder Approval;
(C) the
filing with the SEC of:
(1) The
Form
S-4 (as defined in Section
3.1(e)),
including the Proxy Statement; and
32
(2) such
reports and filings under Section 12(b), 13(a), 13(d), 15(d) or 16(a) of the
Exchange Act and the rules and regulations thereunder as may be required in
connection with this Agreement and the transactions contemplated hereby;
and
(D) the
consents, waivers, approvals, orders or authorizations set forth in Section
3.2(c)(v)(D)of
the
Lumera Disclosure Schedule; and
(E) any
consent, waiver, approval, order or authorization of, or declaration,
registration or filing with, or notice to any Governmental Entity (other than
any of the foregoing addressed in clauses (A) through (D) above), the failure
of
which to be made or obtained, individually or in the aggregate, would not have
or reasonably be expected to have a Material Adverse Effect on Lumera and its
Subsidiaries, taken as a whole.
(vi) Independent
Directors.
As of
the date of this Agreement, assuming the consummation as of such date of the
Mergers and the other transactions contemplated hereby in accordance with the
terms hereof, the individual listed in Exhibit
3.2(c)(vi)
attached
hereto would qualify as an Independent Director and, with respect to the
Company, would be considered to be an independent director within the meaning
of
Rule 10A-3(b)(1) under the Exchange Act.
(d) SEC
Documents; Financial Statements.
(i) As
of the
date of this Agreement, Lumera has filed with the SEC all registration
statements, prospectuses, reports, schedules, forms, certifications and other
documents (including exhibits and all other information incorporated by
reference therein), required to be so filed by Lumera from January 1, 2007
through the date of this Agreement (the “Lumera
SEC Documents”).
As of
their respective dates, the Lumera SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
the
case may be, and to the extent in effect, SOX and the rules and regulations
of
the SEC promulgated thereunder applicable to such Lumera SEC Documents. No
Subsidiary of Lumera is subject to the periodic reporting requirements of the
Exchange Act.
(ii) Each
principal executive officer of Lumera and each principal financial officer
of
Lumera (or each former principal executive officer of Lumera and each former
principal financial officer of Lumera, as applicable) has made all
certifications required from time to time by Rule 13a-14 or 15d-14 under the
Exchange Act or Sections 302 and 906 of SOX and the rules and regulations of
the
SEC promulgated thereunder with respect to the Lumera SEC Documents. For
purposes of the preceding sentence, “principal
executive officer”
and
“principal
financial officer”
shall
have the meanings given to such terms in SOX.
33
(iii) The
financial statements of Lumera included in the Lumera SEC Documents comply,
and
all registration statements, prospectuses, reports, schedules, forms,
certificates and other documents (including exhibits and all other information
incorporated by reference therein but excluding the Proxy Statement and the
Form
S-4 filed with the SEC after the date hereof until the Effective Time, will
comply, as of their respective dates of filing with the SEC, in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been and will be prepared
in
accordance with United States generally accepted accounting principles
consistently applied (“GAAP”)
(except, in the case of unaudited statements, as permitted by Form 10-Q or
8-K
or other applicable rules of the SEC) applied on a consistent basis during
the
periods involved (except as may be indicated in the notes thereto) and fairly
present and will fairly present the consolidated financial position of Lumera
and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended or ending
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and the lack of footnote disclosure). The financial books and
records of Lumera and its Subsidiaries, taken as a whole, are true and correct
in all material respects. There has been no change in Lumera accounting policies
from January 1, 2007 through the date hereof except as described in the notes
to
the financial statements included in the Lumera SEC Documents.
(iv) Except
as
set forth in Section 3.2(d)(iv) of the Lumera Disclosure Schedule, neither
Lumera nor any of its Subsidiaries has any liabilities or obligations, other
than liabilities or obligations (i) reflected or reserved against in the balance
sheet of Lumera as of December 31, 2007 (including the notes thereto, the
“Lumera
Balance Sheet”)
or
(ii) incurred since December 31, 2007 in the ordinary course of business,
consistent with past practice.
(e) Absence
of Certain Changes or Events.
Since
December 31, 2007, except as contemplated by or as disclosed in this Agreement
(including the Lumera Disclosure Schedule) or in the Lumera SEC Documents,
Lumera has conducted its business only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been a
Material Adverse Effect on Lumera, nor any action that, if taken after the
date
hereof, would constitute a breach of Section
4.1(a).
(f) Compliance
with Applicable Laws; Permits; Litigation.
(i) Lumera,
its Subsidiaries and their respective employees hold all authorizations,
permits, licenses, certificates, easements, concessions, franchises, variances,
exemptions, orders, consents, registrations and approvals of all Governmental
Entities which are required for Lumera and its Subsidiaries to own, lease and
operate its properties and other assets and to carry on their respective
businesses in the manner described in the Lumera SEC Documents filed prior
to
the date hereof and as they are being conducted as of the date hereof (the
“Lumera
Licenses or Permits”),
and
all Lumera Licenses or Permits are valid and in full force and effect, except
where the failure to have, or the suspension or cancellation of, or the failure
to be valid or in full force and effect of, any such Lumera Licenses or Permits,
individually or in the aggregate, would not have, or reasonably be expected
to
have a Material Adverse Effect on Lumera and its Subsidiaries, taken as a
whole.
34
(ii) Lumera
and its Subsidiaries are, and have been at all times since January 1, 2007,
in
compliance with the terms of the Lumera Licenses or Permits and all Applicable
Laws relating to Lumera and its Subsidiaries or their respective businesses,
assets or properties, except where the failure to be in compliance with the
terms of the Lumera Licenses or Permits or such Applicable Laws, individually
or
in the aggregate, would not have, or reasonably be expected to have a Material
Adverse Effect on Lumera and its Subsidiaries, taken as a whole. Since January
1, 2007, neither Lumera nor any of its Subsidiaries has received any written
notification from any Governmental Entity (A) asserting that Lumera or any
of
its Subsidiaries is not in compliance with, or at any time since such date
has
failed to comply with, Applicable Laws (except for any such lack of compliance
which, individually or in the aggregate, would not have, or reasonably be
expected to have a Material Adverse Effect on Lumera and its Subsidiaries,
taken
as a whole) or (B) threatening to revoke any of the Lumera Licenses or Permits
(except for any such revocation which, individually or in the aggregate, would
not have, or reasonably be expected to have a Material Adverse Effect on Lumera
and its Subsidiaries, taken as a whole) nor, to the Knowledge of Lumera, does
any basis exist therefor. As of the date hereof, no investigation or review
by
any Governmental Entity is pending or, to the Knowledge of Lumera, has been
threatened in writing against Lumera or any of its Subsidiaries, which,
individually or in the aggregate, would have, or reasonably be expected to
have
a Material Adverse Effect on Lumera and its Subsidiaries, taken as a
whole.
(iii) No
action, audit, demand, claim, suit, proceeding, requirement or investigation
by
any Governmental Entity, and no suit, action, mediation, arbitration or
proceeding by any Person, against or affecting Lumera or any of its Subsidiaries
or any of their respective properties, including the Intellectual Property
set
forth on Section 3.2(l)(i) of the Lumera Disclosure Schedule, is pending or,
to
the Knowledge of Lumera, threatened which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on Lumera and
its
Subsidiaries, taken as a whole.
(iv) Neither
Lumera nor any of its Subsidiaries is, or at any time since January 1, 2007
has
been, subject to any outstanding order, injunction or decree which, individually
or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on Lumera and its Subsidiaries, taken as a whole.
(v) No
material Lumera Licenses or Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the transactions contemplated
by
this Agreement, provided
that the
notices and approvals set forth in Section
3.2(c)(v)(D)
of the
Lumera Disclosure Schedule have been given or received, as
appropriate.
(g) Labor
and Other Employment Matters.
Neither
Lumera nor any of its Subsidiaries is a party to, or bound by, any collective
bargaining agreement. Except as would not have, or reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Lumera
and
its Subsidiaries, taken as a whole: (i) Lumera and its Subsidiaries are in
compliance in all material respects with all Applicable Laws respecting
employment and employments practices and terms and conditions of employment;
(ii) neither Lumera nor any of its Subsidiaries has received written notice
of
any charge or complaint against Lumera or any of its Subsidiaries pending before
the Equal Employment Opportunity Commission, the National Labor Relations Board,
or any other Governmental Entity regarding an unlawful employment practice;
(iii) there is no labor strike, lockout, slowdown or stoppage pending or, to
the
Knowledge of Lumera, threatened or being carried out against Lumera or its
Subsidiaries; and (iv) neither Lumera nor any of its Subsidiaries has received
written notice that any representation or certification petition respecting
the
employees of Lumera or its Subsidiaries has been filed with the National Labor
Relations Board or analogous Governmental Entity.
35
(h) Benefit
Plans.
(i) Section
3.2(h)(i)of
the
Lumera Disclosure Schedule lists all Employee Benefit Plans as to which Lumera
or any of its Subsidiaries sponsors, maintains, contributes or is obligated
to
contribute, or under which Lumera or any of its Subsidiaries has or may have
any
liability, or which benefits any current or former employee, director,
consultant or independent contractor of Lumera or any of its Subsidiaries or
the
beneficiaries or dependents of such person (each a “Lumera
Benefit Plan”).
With
respect to each Lumera Benefit Plan Lumera has furnished or made available
to
GigOptix true, accurate and complete copies of (i) the Lumera Benefit Plans
and
all amendments thereto (or where a Lumera Benefit Plan has not been reduced
to
writing, a summary of all material terms of the Lumera Benefit Plan); (ii)
any
Lumera Benefit Plan's summary plan description, employee handbooks or similar
employee communications, and any material modifications thereto; (iii) if
applicable, any trust agreements, custodial agreements, insurance policies,
administrative agreements and similar agreements, and investment management
or
investment advisory agreements, (iv) in the case of any Lumera Benefit Plan
for
which Forms 5500 are required to be filed, the three most recent annual reports
(Series 5500 and all schedules thereto) in connection with each Lumera Benefit
Plan; (v) in the case of any Lumera Benefit Plan that is intended to be
qualified under Section 401(a) of the Code, the most recent IRS determination
letter and any related correspondence, and any pending request for such
determination.
(ii) With
respect to the Lumera Benefit Plans, no event has occurred, and there exists
no
condition or set of circumstances, which has, or would reasonably be expected
to
have a Material Adverse Effect on Lumera and its Subsidiaries, taken as a whole.
Neither Lumera nor any of its Subsidiaries nor, to the Knowledge of Lumera,
any
other Person, has any express commitment, whether legally enforceable or not,
to
modify, change or terminate any Lumera Benefit Plan, other than with respect
to
a modification, change or termination required by ERISA or the Code, or any
other Applicable Law or administrative changes that do not increase the
liabilities or obligations under any such plans.
(iii) Neither
Lumera nor any of its Subsidiaries ever maintained, contributed to or had any
obligation to contribute to any benefit plan subject to Title IV or Section
412
of the Code.
(iv) None
of
the Lumera Benefit Plans has ever been a Multiemployer Plan; and neither the
Company nor any of its Subsidiaries has ever contributed to or been obligated
to
contribute to any Multiemployer Plan or otherwise has any Liability under or
with respect to any Multiemployer Plan.
(v) With
respect to each Lumera Benefit Plan: (i) each Lumera Benefit Plan intended
to be
“qualified” within the meaning of Section 401(a) of the Code is so qualified;
(ii) each of Lumera and its Subsidiaries has performed all obligations required
to be performed by it under such plan, and such plan has been established,
maintained, administered and operated in accordance with its terms and
Applicable Laws, including but not limited to ERISA and the Code; (iii) nothing
has occurred that has subjected or could subject Lumera or any of its
Subsidiaries to a penalty under Section 502 of ERISA or to an excise tax under
the Code, or that has subjected or could subject any participant in, or
beneficiary of, a Lumera Benefit Plan to a tax under Section 4973 of the Code;
(iv) no non-exempt “prohibited transaction” within the meaning of Section 4975
of the Code or Section 406 of ERISA has occurred that would result in Liability
to the Company; (v) there are no inquiries or proceedings pending or, to the
Knowledge of the Company, threatened by the Internal Revenue Service or
Department of Labor; (vi) to the Knowledge of the Company, the Company is not
subject, directly or indirectly pursuant to any indemnification agreement,
to
any penalty or tax under Section 502(i) of ERISA or Section 4975 through
4980 of the Code.
36
(vi) As
of the
date hereof, to the Knowledge of Lumera, no oral or written representation
or
commitment with respect to any material aspect of any Lumera Benefit Plan has
been made to an employee or former employee of Lumera or any of its Subsidiaries
by an authorized Lumera employee that is not materially in accordance with
the
written or otherwise pre-existing terms and provisions of such Lumera Benefit
Plan.
(vii) There
are
no material unresolved claims or disputes under the terms of, or in connection
with, any Lumera Benefit Plan (other than routine claims for benefits), and
no
action, legal or otherwise, has been commenced or, to the Knowledge of Lumera,
threatened or anticipated with respect to any material claim or otherwise in
connection with a Lumera Benefit Plan.
(viii) No
Lumera
Benefit Plan provides health benefits (whether or not insured) with respect
to
employees or former employees of Lumera or any of its Subsidiaries after
retirement or other termination of service, other than coverage mandated by
Applicable Law or benefits the full cost of which is borne by the employee
or
former employee.
(ix) Neither
the negotiation and execution of this Agreement nor the consummation of the
transactions contemplated hereby shall (either alone or upon the occurrence
of
any additional or subsequent events) constitute an event under any Lumera
Benefit Plan that will or may result in any payment (whether of severance pay
or
otherwise), acceleration of payment, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with respect
to any employee or former employee of Lumera or any of its Subsidiaries or
limit
the ability to amend or terminate any Lumera Benefit Plan or related trust.
There is no contract, agreement, plan or arrangement with an employee or former
employee of Lumera to which Lumera or any of its Subsidiaries is a party as
of
the date of this Agreement that, individually or collectively, and as a result
of the transactions contemplated hereby (whether alone or upon the occurrence
of
any additional or subsequent events), would give rise to the payment of any
amount that would not be deductible pursuant to Section 280G of the
Code.
(x) None
of
the Lumera Benefit Plans is, or within the last six years, has been (i) the
subject of an examination or audit by a Governmental Body, (ii) the subject
of
an application or filing under, or (iii) a participant in, a
government-sponsored amnesty, voluntary compliance, self-correction or similar
program.
(xi) Each
Lumera Benefit Plan that is a “nonqualified deferred compensation plan” subject
to Section 409A of the Code has been operated in good faith compliance with
Section 409A of the Code and guidance of the IRS provided
thereunder.
37
(xii) Neither
Lumera nor any of its Subsidiaries have or has ever had any funding arrangement
intended to qualify as a VEBA under Section 501(c)(9) of the Code.
(xiii) Each
Lumera and its Subsidiaries has appropriately classified persons who are
providing services for the Lumera or its Subsidiaries, whether directly or
through a leasing organization, as independent contractors and the Company
has
no liability (contingent or otherwise) for failure to classify independent
contractors as employees.
(xiv) Without
limiting the generality of (ii) through (xiii) above, with respect to each
Lumera Benefit Plan that is a Foreign Benefit Plan: (i) all employer and
employee contributions to each Foreign Benefit Plan required by Law or by the
terms of such Foreign Benefit Plan have been made, or if applicable, accrued
in
accordance with normal accounting practices; (ii) the fair market value of
the
assets of each funded Foreign Benefit Plan, the liability of each insurer for
any Foreign Benefit Plan funded through insurance or the book reserve
established for any Foreign Benefit Plan, together with any accrued
contributions is sufficient to procure or provide for the accrued benefit
obligations, as of the date of this Agreement, with respect to all current
and
former participants in such plan according to reasonable actuarial assumptions
and no transaction contemplated by this Agreement shall cause such assets,
reserve or insurance obligations to be less than such benefit obligations,
and
(iii) each Foreign Benefit Plan required to be registered has been registered
and has been maintained in good standing with applicable regulatory
authorities.
(i) Taxes.
(i) Each
of
Lumera and its Subsidiaries has (A) duly and timely filed (or there have been
filed on its behalf) all income and material non-income Tax Returns required
to
be filed by it with the appropriate Tax Authority and all such Tax Returns
are
true, correct and complete in all material respects, (B) timely paid (or there
has been paid on its behalf) in full all income and material non-income Taxes
due and owing by it, (C) made adequate provision in accordance with GAAP (or
provision has been made on its behalf) for the payment of all income and
material non-income Taxes not yet due and (D) complied with all Applicable
Laws
relating to the payment and reporting of withholding Taxes and employment
Taxes.
(ii) There
are
no material Liens for Taxes upon any property or assets of Lumera or any of
its
Subsidiaries, except for Liens for Taxes not yet due and payable.
(iii) There
is
no audit, examination, refund litigation, proposed adjustment, matter in
controversy or other dispute with respect to any Taxes or Tax Return of Lumera
or any of its Subsidiaries. Neither Lumera nor any of its Subsidiaries has
received written notice of any claim made by a Governmental Entity in a
jurisdiction where Lumera or any of its Subsidiaries, as applicable, does not
file a Tax Return, that Lumera or such Subsidiary is or may be subject to
taxation by that jurisdiction.
(iv) There
are
no outstanding requests, agreements, consents or waivers to extend the statutory
period of limitations applicable to the assessment of any Taxes or deficiencies
against Lumera or any of its Subsidiaries.
38
(v) Neither
Lumera nor any of its Subsidiaries is a party to any agreement providing for
the
allocation, indemnification or sharing of, or related to, Taxes (other than
any
agreements solely between or among Lumera and its Subsidiaries), and neither
Lumera nor any of its Subsidiaries (A) has been a member of an affiliated group
(or similar state, local or foreign filing group) filing a consolidated income
Tax Return (other than a group the common parent of which is Lumera) or (B)
has
any liability for the Taxes of any Person (other than Lumera or any of its
Subsidiaries) under Treasury Regulation § 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee or successor, by contract or
otherwise.
(vi) Neither
Lumera nor any of its Subsidiaries has (A) agreed to make nor is it required
to
make any material adjustment under Section 481(a) of the Code by reason of
a
change in accounting method or otherwise; or (B) constituted either a “distributing
corporation”
or
a
“controlled
corporation”
(within
the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
intended to qualify for tax-free treatment under Section 355 of the Code (x)
in
the two years prior to the date of this Agreement or (y) in a distribution
which
could otherwise constitute part of a “plan”
or
“series
of
related transactions”
(within
the meaning of Section 355(e) of the Code) in connection with the
Mergers.
(vii) Lumera
is
not, and has not been, a United States real property holding corporation (as
defined in Section 897(c)(2) of the Code) during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code.
(viii) No
closing agreements, private letter rulings, technical advice memoranda or
similar agreements or rulings have been entered into or issued by any Tax
Authority with respect to Lumera or any of its Subsidiaries within five years
of
the date of this Agreement, and no such agreement or ruling has been applied
for
and is currently pending.
(ix) Neither
Lumera nor any of its Subsidiaries has entered into a “listed
transaction”
within
the meaning of Treasury Regulation § 1.6011-4(b)(2).
(j) Affiliate
Transactions.
Except
as may be disclosed in the Lumera SEC Documents:
(i) As
of the
date of this Agreement, (A) there are no currently effective transactions,
arrangements or Contracts between Lumera and its Subsidiaries, on the one hand,
and its Affiliates (other than its wholly-owned Subsidiaries) or other Persons,
on the other hand, that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act and that have not been heretofore
disclosed in the Lumera SEC Documents, and (B) Lumera is not subject to any
binding obligations with respect to any such transactions, arrangements or
Contracts.
(ii) There
are
no personal loans, within the meaning of SOX, outstanding pursuant to which
Lumera or any of its Subsidiaries has extended credit to any executive officer
or director of Lumera or any of its Subsidiaries.
39
(k) Environmental
Matters.
(i) Except
as
would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect on Lumera and its Subsidiaries, taken as a whole: (i)
the operations of Lumera and its Subsidiaries are, and, except for matters
that
have been fully resolved with the applicable Governmental Entity, at all times
have been, in compliance with all applicable Environmental Laws, including
possession and compliance with the terms of all Environmental Permits; (ii)
there are no pending or, to the Knowledge of Lumera, threatened Environmental
Claims against Lumera or any of its Subsidiaries or involving any real property
currently owned, operated or leased or other sites at which Hazardous Materials
were disposed of, or allegedly disposed of, by Lumera or any of its
Subsidiaries; and (iii) to the Knowledge of Lumera, there are no pending or
threatened Environmental Claims involving any real property formerly owned,
operated or leased by Lumera or any of its Subsidiaries.
(ii) Lumera
and its Subsidiaries have furnished to GigOptix copies of all environmental
audits and other material documents in their possession or under their control
that relate to the environmental condition of any real property currently or
formerly owned, operated or leased by Lumera or any of its Subsidiaries or
compliance by Lumera or any of its Subsidiaries with Environmental
Laws.
(l) Intellectual
Property.
(i) Section
3.2(l)(i) of the Lumera Disclosure Schedule sets forth a true and complete
list
(in all material respects) of all patents and applications therefor, registered
trademarks and applications therefor, domain name registrations and copyright
registrations (if any) that are owned by or licensed to Lumera or its
Subsidiaries.
(ii) Except
as
would not, individually or in the aggregate, have, or reasonably be expected
to
have a Material Adverse Effect on Lumera and its Subsidiaries, taken as a
whole:
(A) all
Intellectual Property set forth on Section 3.2(l)(i) of the Lumera Disclosure
Schedule is either (i) owned of record by Lumera or a Subsidiary of Lumera,
or
(ii) is licensed to Lumera or a Subsidiary of Lumera and free and clear of
all
Liens except Permitted Liens (as defined in Section 8.3(t)) for the conduct
of
the business of Lumera and/or its Subsidiaries as currently
conducted.
(B) to
the
Knowledge of Lumera, except as set forth on Section
3.2(l)(ii)(B)of
the
Lumera Disclosure Schedule, the conduct of the business and operations of Lumera
and its Subsidiaries as currently conducted does not infringe or otherwise
conflict with, and as previously conducted has not infringed or otherwise
conflicted with, the rights of any Person in respect of any Intellectual
Property; no claim has been made, is pending, or, to the Knowledge of Lumera,
is
threatened that the conduct of the business and operations of Lumera and its
Subsidiaries as previously conducted and as currently conducted violated or
violates the asserted rights of any Person; and no licensing requests or other
demands or notices of any kind have been made to Lumera or its Subsidiaries
with
respect to any Intellectual Property used by Lumera or its Subsidiaries in
their
business or operations as previously conducted or currently
conducted;
40
(C) to
the
Knowledge of Lumera, except as set forth on Section
3.2(l)(ii)(C)
of the
Lumera Disclosure Schedule, none of the Intellectual Property set forth on
Section 3.2(l)(i) of the Lumera Disclosure Schedule is being infringed or
otherwise violated by a third Person, no claims, suits, arbitrations or other
adversarial proceedings have been brought or threatened against any Person
by
Lumera or any of its Subsidiaries, and none of the Intellectual Property set
forth on Section 3.2(l)(i) of the Lumera Disclosure Schedule is subject to
any
outstanding order by or with any court, tribunal, arbitrator or other
Governmental Entity;
(D) Lumera
and its Subsidiaries have taken all appropriate and timely actions reasonably
necessary to ensure full ownership (including by assignment from employees
where
appropriate and from other Persons performing services for Lumera or any its
Subsidiaries), protection and enforceability of all Intellectual Property set
forth on Section 3.2(l)(i) of the Lumera Disclosure Schedule under any
Applicable Law (including by making and maintaining in full force and effect
all
necessary filings, registrations and issuances);
(E) Lumera
and its Subsidiaries have taken all appropriate actions reasonably necessary
to
maintain the secrecy of all non-public Intellectual Property owned by Lumera
and
its Subsidiaries, including trade secrets, used in the business of Lumera and
its Subsidiaries (including by requiring the execution of confidentiality
agreements by employees or any other Person to whom such Intellectual Property
has been made available).
(iii) The
consummation of the transactions contemplated by this Agreement will not result
in the loss or impairment of or payment of any additional amounts with respect
to the right of Lumera or any of its Subsidiaries to own or use any Intellectual
Property set forth on Section 3.2(l)(i) of the Lumera Disclosure Schedules,
other than any such losses, impairments, payments, conflicts, or failure to
obtain consents, which, individually or in the aggregate, would not have, or
reasonably be expected to have, a Material Adverse Effect on Lumera and its
Subsidiaries, taken as a whole.
(m) Brokers.
Except
for fees payable to GCA Savvian, no broker, investment banker, financial advisor
or other Person is entitled to any broker’s, finder’s, financial advisor’s,
intermediary or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or
on behalf of Lumera. Lumera has previously delivered to GigOptix a true and
complete copy of the engagement letter between Lumera and GCA
Savvian.
41
(n) Contracts.
(i)
Except as may be set forth in the appropriate section of Section
3.2(n)
of the
Lumera Disclosure Schedule or as otherwise disclosed in the Lumera SEC
Documents, as of the date of this Agreement, none of Lumera or any of its
Subsidiaries is a party to or bound by any: (A) Contract required to be filed
by
Lumera with the SEC pursuant to Item 601(b) (1), (2), (4) or (10) of Regulation
S-K under the Securities Act or Item 1.01 of Form 8-K under the Exchange Act;
(B) Contract with respect to material partnerships, joint ventures, acquisitions
or dispositions; (C) Contract containing covenants of Lumera or any of its
Subsidiaries purporting to limit in any material respect any material line
of
business, industry or geographical area in which Lumera or its Subsidiaries
may
operate or granting material exclusive rights to the counterparty thereto;
(D)
Contract that, individually or in the aggregate with other Contracts, would
or
would reasonably be expected to prevent, materially delay or materially impede
Lumera’s ability to timely consummate the Lumera Merger or the other
transactions contemplated by this Agreement; (E) indenture, mortgage, loan,
guarantee or credit Contract under which Lumera or any Subsidiary of Lumera
has
any outstanding indebtedness or any outstanding note, bond, indenture or other
evidence of indebtedness for borrowed money or otherwise or any guaranteed
indebtedness for money borrowed by others, in each case, for or guaranteeing
an
amount in excess of $100,000, other than any such indebtedness between Lumera
(whether as creditor or debtor) and any wholly-owned Subsidiary of Lumera or
between any wholly owned Subsidiaries of Lumera; or (F) Contract specifically
concerning Intellectual Property (except for (x) non-exclusive, commercially
available, off-the-shelf software programs for which Lumera pays an annual
fee
under any individual contract of less than $50,000, (y) Contracts with customers
pursuant to which the customer and its Subsidiaries pay less than $250,000
annually under any individual contract and (z) Contracts with data suppliers
pursuant to which Lumera and its Subsidiaries pay fees under any individual
contract of less than $50,000 annually) that is material to the business of
Lumera and its Subsidiaries, taken as a whole. Each such Contract described
in
clauses (A)-(F) above is referred to herein as a “Lumera
Material Contract.”
(i) Each
of
the Lumera Material Contracts is valid and binding on Lumera and each of its
Subsidiaries party thereto and, to the Knowledge of Lumera, each other party
thereto and is in full force and effect, except for such failures to be valid
and binding or to be in full force and effect that, individually or in the
aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect on Lumera and its Subsidiaries taken as a whole. There
is no default under any Lumera Material Contract either by Lumera or any of
its
Subsidiaries party thereto or, to the Knowledge of Lumera, by any other party
thereto, and no event has occurred that with notice or lapse of time or both
would constitute a default thereunder by Lumera or any of its Subsidiaries
party
thereto or, to the Knowledge of Lumera, any other party thereto, in each case
except as, individually or in the aggregate, have not had, and would not
reasonably be expected to have, a Material Adverse Effect on Lumera and its
Subsidiaries taken as a whole. Complete and correct copies of each Lumera
Material Contract (including any exhibits, annexes, attachments, supplements,
amendments or modifications thereto, whether or not such exhibits, annexes,
attachments, supplements, amendments or modifications have been filed with
the
SEC), have been delivered or made available to GigOptix prior to the date
hereof.
(o) Real
Property.
Except
as would not have, or reasonably be expected to have, a Material Adverse Effect
on Lumera and its Subsidiaries, taken as a whole, Lumera and its Subsidiaries
own (i) good and valid title to the Owned Real Property and (ii) valid and
enforceable leasehold interests with respect to the Leased Real Property, in
each case subject to Permitted Liens. Except in any such case as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Lumera and its Subsidiaries taken as a whole, all Improvements
with respect to the Real Property of Lumera and its Subsidiaries are in good
repair and operating condition, subject only to ordinary wear and tear, and
are
adequate and suitable for the purposes for which they are presently being used
or held for use, and, to the Knowledge of Lumera, there are no facts or
conditions affecting any of such Improvements that, in the aggregate, would
reasonably be expected to interfere with the current use, occupancy or operation
thereof.
42
(p) Tax-Free
Treatment.
Neither
Lumera nor any of its Subsidiaries has taken (or caused to be taken) any action
or knows of any fact, agreement, plan or other circumstance that would
reasonably be expected to prevent the Lumera Merger together with the GigOptix
Merger from qualifying as an integrated series of transfers qualifying under
Section 351 of the Code.
ARTICLE
IV
COVENANTS
RELATING TO CONDUCT OF BUSINESS
Section
4.1 Conduct
of Business.
(a) Each
of
Lumera and GigOptix agrees that, between the date of this Agreement and the
Effective Time, except as set forth in Section
4.1(a)
of the
Lumera Disclosure Schedule or Section
4.1(a)
of the
GigOptix Disclosure Schedule, as the case may be, or as expressly provided
by
any other provision of this Agreement, or unless Lumera and GigOptix shall
otherwise consent in advance in writing, which consent shall not be unreasonably
withheld, delayed or conditioned, each of Lumera and GigOptix shall, and shall
cause each of its Subsidiaries (including the Company, Merger Sub G and Merger
Sub L) to: (i) maintain its existence in good standing under Applicable Laws,
(ii) subject to the restrictions and exceptions set forth in this Section
4.1(a),
conduct
its operations only in the ordinary and usual course of business consistent
with
past practice and (iii) use commercially reasonable efforts to keep available
the services of the current officers, key employees and key consultants of
each
of it and its Subsidiaries and to preserve the current relationships of each
of
it and its Subsidiaries, with its customers, suppliers and other Persons with
which it or any of its Subsidiaries has significant business relations as are
reasonably necessary in order to preserve substantially intact its business
organization. In addition, without limiting the foregoing, except as set forth
in Section
4.1(a)
of the
Lumera Disclosure Schedule or Section
4.1(a)
of the
GigOptix Disclosure Schedule, as the case may be, or as expressly provided
by
any other provision of this Agreement, Lumera and GigOptix shall not and shall
not permit any of their respective Subsidiaries to (unless otherwise required
by
Applicable Laws applicable to Lumera and its Subsidiaries or GigOptix and its
Subsidiaries, respectively, or as otherwise specifically provided herein),
between the date of this Agreement and the Effective Time, directly or
indirectly, do, or agree to do, any of the following without the prior written
consent of Lumera or GigOptix, respectively (which consent shall not be
unreasonably withheld, delayed or conditioned):
(i) (1)
except
for the amendments to the certificate of incorporation and by-laws of the
Company contemplated in this Agreement, amend or otherwise change its limited
liability company agreement, articles or certificate of incorporation or bylaws
or equivalent organizational documents, as the case may be, (B) liquidate,
merge
or consolidate or enter into a similar transaction or (C) form or create any
Subsidiary that is not a wholly-owned Subsidiary;
43
(ii) issue,
sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance,
sale, pledge, disposition, grant, transfer or encumbrance of any shares of
capital stock, membership units of, or other equity or ownership interests
in,
Lumera or GigOptix or any of their respective Subsidiaries of any class, or
securities convertible or exchangeable or exercisable for any shares of such
capital stock, membership units or other equity interests, or any options,
warrants or other rights of any kind to acquire any shares of such capital
stock, membership units or other equity interests or such convertible or
exchangeable securities, or any other ownership interest, of Lumera or GigOptix
or any of their respective Subsidiaries, except for (A) the issuance of
securities issuable upon the exercise of options, warrants or other rights
outstanding as of the date hereof under the Lumera Stock Plan, the GigOptix
Plan
or the Lumera Warrants; (B) the issuance of options under any Lumera Benefit
Plans or GigOptix Benefit Plans, as in effect on the date hereof, respectively,
provided that such option issuances are made in the ordinary course consistent
with past practice and that the number of shares of Lumera Common Stock or
GigOptix Membership Units subject to such options does not exceed in the
aggregate the amount set forth in Section
4.1(a)(ii)
of the
Lumera Disclosure Schedule or Section
4.1(a)(ii)
of the
GigOptix Disclosure Schedule, as the case may be; (C) the issuance by Lumera
of
Lumera Common Stock at fair market value (as determined by the board of
directors of Lumera at their sole discretion), provided that the Lumera Exchange
Ratio shall be adjusted in accordance with Section
2.1(h)
to take
into account such issuances; and (D) the issuance of GigOptix Membership Units
in connection with the conversion of GigOptix Voting Debt, provided that the
GigOptix Exchange Ratio shall be adjusted in accordance with Section
2.1(h)
to take
into account such issuances.
(iii) (2)
declare,
set aside, make or pay any dividend or other distribution (whether payable
in
cash, stock, property or a combination thereof) with respect to any of the
capital stock of Lumera or the membership interests of GigOptix, or (B) declare,
set aside, make or pay any dividend or other distribution (whether payable
in
cash, stock, property or a combination thereof) with respect to any Subsidiary,
other than in the ordinary course or (C) enter into or amend any agreement
with
respect to the voting or registration of the capital stock of Lumera or
membership units of GigOptix, provided, in the case of each of clauses (A)
and
(B) above, that any Subsidiary of Lumera or GigOptix may declare, make or pay
dividends or other distributions to Lumera or any of Lumera’s Subsidiaries or
GigOptix or any of GigOptix’s Subsidiaries, as the case may be;
(iv) (3)
reclassify, combine, split or subdivide any of their capital stock or issue
or
authorize the issuance of any other securities in respect of, in lieu of, or
in
substitution for, shares of their capital stock, or (B) redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock, other
equity interests or other securities other than in connection with the
forfeiture of GigOptix Options or Lumera Options as a result of terminations
of
employment or other forfeiture events specified therein in the ordinary course
of business and consistent with past practice;
44
(v) (4)
incur
any indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any Person (other than a Subsidiary of Lumera or GigOptix,
respectively) for borrowed money, except for (x) indebtedness for borrowed
money
under or guarantees with respect to indebtedness under Lumera’s or GigOptix’s
existing credit facilities, respectively, incurred and applied in the ordinary
course of business consistent with past practice and in an aggregate amount
not
to exceed $1,500,000 in principal amount outstanding at any one time or (y)
indebtedness of any Subsidiary of Lumera or GigOptix, to Lumera or GigOptix,
respectively, or to any other Subsidiary of Lumera or GigOptix, respectively,
or
indebtedness of Lumera or GigOptix, respectively, to any Subsidiary of Lumera
or
GigOptix, respectively, (B) (x) terminate or cancel (other than a termination
or
cancellation due to the expiration of any term of any contract or any breach
or
nonperformance by any counterparty), or agree to any material change in, any
Lumera Material Contract or GigOptix Material Contract, as the case may be,
where such termination, cancellation or change would have an adverse effect
on
Lumera and its Subsidiaries, or GigOptix and its Subsidiaries, as the case
may
be (in each case taken as a whole), or (y) enter into (other than by extension
of an existing contract or by entry into a new contract with an existing
counterparty on terms substantially the same as those of the prior contract,
in
each case in the ordinary course of business consistent with past practice,
provided that any such extension or new contract does not obligate GigOptix
or
Lumera or their respective Subsidiaries to make payments thereunder that exceed
$500,000 in the aggregate) any contract which would be deemed to be a Lumera
Material Contract or a GigOptix Material Contract, as the case may be, if
entered into prior to the date hereof, except, for the purposes of this
Section
4.1(a)(v),
the
dollar amounts used to calculate whether a contract would be a Lumera Material
Contract or a GigOptix Material Contract, respectively, shall be doubled or
(C)
make or authorize any loan to any Person (other than Lumera or a Subsidiary
of
Lumera, in the case of Lumera or any Subsidiary of Lumera, or GigOptix or a
Subsidiary of GigOptix, in the case of GigOptix or any Subsidiary of GigOptix)
outside the ordinary course of business consistent with past
practice;
(vi) Except
as
required by Applicable Laws or by the terms of any existing GigOptix Benefit
Plan or Lumera Benefit Plan as in effect on the date hereof or as otherwise
set
forth in Section
4.1(a)(vi)
of the
Lumera Disclosure Schedule or Section
4.1(a)(vi)
of the
GigOptix Disclosure Schedule: (A) increase the compensation or benefits payable
or to become payable to its directors, officers or other employees, agents
or
consultants, other than in the ordinary course of business consistent with
past
practice; (B) grant any rights to severance or termination pay to, or enter
into
any employment, consulting, severance or similar agreement with, any director,
officer or other employee, or any agent or consultant; (C) grant any cash bonus,
equity-based award or other incentive to any director, officer or other
employee, agent or consultant, other than awards to newly hired officers or
other employees, agents or consultants or pursuant to any existing GigOptix
Benefit Plan or Lumera Benefit Plan as in effect on the date hereof, in each
case, in the ordinary course of business consistent with past practice; (D)
establish, adopt, enter into or amend any collective bargaining agreement (or
other agreement or understanding with any trade union, works council or other
employee representative body) or any GigOptix Benefit Plan or Lumera Benefit
Plan; (E) take any action to amend or waive any performance or vesting criteria
or accelerate vesting, exercisability, settlement or funding under any GigOptix
Benefit Plan, any Lumera Benefit Plan or any award agreement thereunder,
provided, that Lumera may extend the period within which Lumera Options issued
to members of Lumera’s board of directors must be exercised following
termination from ninety (90) days to five (5) years; or (F) take any action
with
respect to salary, compensation, benefits or other terms and conditions of
employment that would result in the holder of a change in control or similar
agreement having “good reason” or other entitlement to terminate employment and
collect severance payments and benefits pursuant to such agreement;
(vii) make
any
material change in financial accounting policies or procedures, except as
required by GAAP or by a Governmental Entity;
45
(viii) except
as
required by Applicable Laws, make, change or revoke any material Tax election
or
settle or compromise any material liability for Taxes, change any annual Tax
accounting period, change any method of Tax accounting, file any material
amended Tax Return, enter into any closing agreement relating to any material
Tax, surrender any right to claim a material Tax refund, or consent to any
extension or waiver of the statute of limitations period applicable to any
material Tax claim or assessment;
(ix) write
up,
write down or write off the book value of any assets, individually or in the
aggregate, for Lumera and its Subsidiaries, taken as a whole, or GigOptix and
its Subsidiaries, taken as a whole, respectively, other than (A) in the ordinary
course of business, (B) as may be required by GAAP or (C) otherwise not in
excess of $250,000;
(x) except
with respect to the Plexera Business Actions (as defined in Section
8.3(w)),
acquire, dispose of, or agree to acquire from or agree to dispose to any Person,
any assets, operations, business or securities or engage in, or agree to engage
in, any merger, consolidation or other business combination with any Person,
except in connection with (A) capital expenditures set forth in Section
4.1(a)(x)
of the
Lumera Disclosure Schedule or Section
4.1(a)(x)
of the
GigOptix Disclosure Schedule, in addition to other capital expenditures in
the
ordinary course of business consistent with past practice in amounts not to
exceed $1,000,000 in the aggregate for the period commencing on the date hereof
and ending on the Effective Time, as the case may be, or which are made from
insurance proceeds, (B) in addition to capital expenditures permitted under
clause (A) above, acquisitions or dispositions of inventory and other tangible
assets in the ordinary course of business consistent with past practice, and
(C)
acquisitions and dispositions via arms-length transactions with one or more
Persons that are not Affiliates of Lumera or GigOptix, as applicable (in
addition to acquisitions and dispositions permitted under clauses (A) and (B)
above), of assets, operations, businesses or securities up to $250,000 in the
aggregate;
(xi) except
as
required by Applicable Laws or any judgment by a court of competent
jurisdiction, pay, discharge, settle or satisfy any material claims,
liabilities, obligations or litigation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than such payments, discharges,
settlements or satisfactions made in the ordinary course of business consistent
with past practice and in an aggregate amount not to exceed $500,000 (measured
by consideration paid or received);
(xii) enter
into any non-competition contract or other contract that purports to limit
in
any material respect either the type of business in which Lumera or its
Subsidiaries, or GigOptix or its Subsidiaries, respectively, may engage or
the
manner or locations in which any of them may so engage in any
business;
(xiii) except
as
otherwise permitted by this Section
4.1(a),
make
any material change in the conduct of its businesses or enter into any
transaction other than in the ordinary course business and consistent with
past
practice;
(xiv) authorize
or enter into any agreement, or otherwise make any commitment, to do any of
the
foregoing.
46
(b) Nothing
contained in this Agreement shall give to either party, directly or indirectly,
rights to control or direct the operations of the other party prior to the
Effective Time in violation of Applicable Laws. Prior to the Effective Time,
each party shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision of its own operations.
(c) GigOptix
shall provide Lumera with all (i) quarterly statements of income and cash flows
of GigOptix and its consolidated Subsidiaries and (ii) quarterly consolidated
balance sheets of GigOptix and its Subsidiaries, in each case for and as of
the
end of all quarterly periods after the date hereof until the Effective Time,
commencing with the quarterly period ended March 31, 2008, as soon as such
financial statements are prepared (and no later than such financial statements
are distributed to GigOptix’s investors). Moreover, to the extent GigOptix
prepares such financial statements on a more frequent basis than quarterly
and
distributes such financial statements to its investors, such financial
statements shall be distributed at the same time to Lumera. Collectively, all
of
such quarterly financial statements of GigOptix are referred to in the Agreement
as the “Prospective
GigOptix Financial Statements.”
(d) Lumera
shall not permit the Company or any of its Subsidiaries to take, or commit
to
take, any action after the date hereof and prior to the Effective Time, except
for the actions expressly set forth in this Agreement as actions to be taken
by
such Person during such period.
Section
4.2 No
Solicitation.
(a) Except
as
provided in Section
4.2(c)
or
4.2(d),
from
the date hereof until the earlier of the Effective Time and the termination
of
this Agreement, none of Lumera or GigOptix, their respective Subsidiaries or
any
officer, director, employee, agent or representative (including any investment
banker, financial advisor, attorney, accountant or other retained advisor)
(collectively, “Representatives”)
of
Lumera or GigOptix or any of their respective Subsidiaries shall directly or
indirectly (i) solicit, initiate or encourage or knowingly facilitate (including
by way of furnishing information or entering into any agreements, arrangements
or understandings) or take any other action designed to facilitate any inquiries
or proposals regarding any merger, share exchange, consolidation, business
combination, sale of assets, sale of shares of capital stock (including by
way
of a tender offer) or similar transactions involving Lumera or GigOptix or
any
of their respective Subsidiaries that, if consummated, would constitute, or
would reasonably be expected to constitute, an Alternative Transaction (as
defined in Section
8.3(b))
(any of
the foregoing inquiries or proposals being referred to herein as an
“Alternative
Transaction Proposal”),
(ii)
participate in any discussions or negotiations regarding an Alternative
Transaction or an Alternative Transaction Proposal, (iii) enter into any
agreement regarding an Alternative Transaction or an Alternative Transaction
Proposal, (iv) approve or endorse or agree to approve or endorse an Alternative
Transaction or an Alternative Transaction Proposal or (v) make or effect a
Change of Recommendation (as defined in Section
4.2(d)(ii)).
47
(b) From
the
date hereof until the earlier of the Effective Time and the termination of
this
Agreement, Lumera shall notify GigOptix promptly (but in no event later than
24
hours) after receipt of any Alternative Transaction Proposal, or any material
modification of or material amendment to any Alternative Transaction Proposal
or
any request for nonpublic information relating to Lumera or any of its
Subsidiaries relating to any Alternative Transaction Proposal. Such notice
shall
be made orally and in writing, and shall indicate the identity of the Person
making the Alternative Transaction Proposal or such request and the material
terms of any such Alternative Transaction Proposal or any material modification
or material amendment to an Alternative Transaction Proposal (including a copy
thereof if such Alternative Transaction Proposal or material modification or
material amendment is in writing). From the date hereof until the earlier of
the
Effective Time and the termination of this Agreement, Lumera shall keep GigOptix
reasonably informed on a current basis of any material changes in the status
and
any material changes or modifications in the terms of any such Alternative
Transaction Proposal, indication or request. Lumera shall provide GigOptix
with
48 hours prior notice (or such lesser prior notice as is provided to the members
of its Board of Directors) of any meeting of its Board of Directors at which
its
Board of Directors is reasonably expected to consider any Alternative
Transaction Proposal or Alternative Transaction.
(c) Superior
Proposals.
Notwithstanding anything to the contrary contained in Section
4.2(a),
in the
event that Lumera receives an unsolicited, bona fide written Alternative
Transaction Proposal that is determined (in accordance with Section
8.3(z))
to be,
or is reasonably likely to be, a Superior Proposal (as defined in Section
8.3(z)),
it may
then take the following actions (but only (1) if and to the extent that (y)
its
Board of Directors concludes in good faith, after consultation with its outside
legal counsel, that the failure to do so is reasonably likely to result in
a
breach of its fiduciary obligations to its stockholders under Applicable Laws,
and (z) Lumera has given GigOptix at least two business days prior written
notice of its intention to take any of the following actions and (2) if it
shall
not have breached in any material respect any of the provisions of this
Section
4.2):
(i) Furnish
nonpublic information to the Person or group of Persons making such Superior
Proposal, provided that (A) prior to furnishing any such nonpublic information,
it receives from such Person or group of Persons an executed confidentiality
and
standstill agreement containing terms at least as restrictive as the terms
contained in the Confidentiality Agreement, dated as of [_________, 2008],
between GigOptix and Lumera (the “CDA”)
and
(B) contemporaneously with furnishing any such nonpublic information to such
Person or group of Persons, it furnishes such nonpublic information to the
other
party hereto (to the extent such nonpublic information has not been previously
so furnished to such party); and
(ii) Engage
in
discussions or negotiations with such Person or group of Persons with respect
to
such Superior Proposal.
(d) Changes
of Recommendation.
(i) In
response to the receipt of an unsolicited, bona fide written Alternative
Transaction Proposal which is determined (in accordance with Section
8.3(z))
to be a
Superior Proposal, the Board of Directors of Lumera may make a Change of
Recommendation, if all of the following conditions in clauses (A) through (E)
are met:
(A) the
Superior Proposal has been made and has not been withdrawn and continues to
be a
Superior Proposal;
48
(B) the
Lumera Stockholder Approval has not occurred;
(C) Lumera
has (1) complied with the provisions of Sections 4.2(b)
and
4.2(c)
of this
Agreement, (2) provided to GigOptix four business days’ prior written notice
which shall state expressly that Lumera intends to effect a Change of
Recommendation and the manner in which it intends to do so and (3) during the
aforementioned period, if requested by GigOptix, engaged in good faith
negotiations so that the other party is able to make a revised proposal to
amend
this Agreement in such a manner that the Alternative Transaction Proposal which
was determined to be a Superior Proposal no longer is a Superior
Proposal;
(D) the
Board
of Directors of Lumera has determined in good faith, after consultation with
its
outside legal counsel, that, in light of such Superior Proposal, the failure
of
the Board of Directors to effect a Change of Recommendation is reasonably likely
to result in a breach of its fiduciary obligations to its stockholders under
Applicable Laws; and
(E) Lumera
shall not have breached in any material respect any of the provisions set forth
in this Section
4.2.
(ii) A
“Change
of Recommendation”
shall
mean the withholding, withdrawal, amendment, qualification or modification
of
the Board of Directors’ recommendation in favor of the adoption and approval of
this Agreement and the transactions contemplated hereby, the Company Charter
and
the New Equity Plan, and, in the case of a tender or exchange offer made
directly to Lumera’s stockholders, a recommendation that Lumera’s stockholders
accept the tender or exchange offer.
(e) Nothing
contained in this Section
4.2
shall
prohibit Lumera from taking and disclosing to its stockholders a position
required by Rule 14e-2(a) or Rule 14d-9 promulgated under the Exchange
Act.
(f) Lumera
and its Subsidiaries shall immediately cease and cause to be terminated any
existing discussions or negotiations with any Persons (other than GigOptix)
conducted heretofore with respect to any of the foregoing, and shall use
reasonable best efforts to cause all Persons other than GigOptix who have been
furnished confidential information regarding Lumera in connection with the
solicitation of or discussions regarding an Alternative Transaction Proposal
within the 12 months prior to the date hereof promptly to return or destroy
such
information. Lumera agrees not to, and to cause its Subsidiaries not to, release
any third party from the confidentiality and standstill provisions of any
agreement to which Lumera or its Subsidiaries is or may become a party and
to
use its reasonable best efforts to enforce, to the fullest extent permitted
by
Applicable Laws, the provisions of any such confidentiality and standstill
provisions.
(g) Lumera
and GigOptix shall use their respective reasonable best efforts to inform their
respective Representatives of the restrictions described in this Section
4.2.
It is
understood that any violation of the restrictions set forth in this Section
4.2
by any
officer, director, employee, agent or representative (including any investment
banker, financial advisor, attorney, accountant or other retained advisor)
of
Lumera or its Subsidiaries, or GigOptix or its Subsidiaries, respectively,
at
the direction or with the consent of Lumera or GigOptix, respectively, or their
respective Subsidiaries, as the case may be, shall be deemed to be a breach
of
this Section
4.2
by
Lumera or GigOptix, respectively.
49
ARTICLE
V
ADDITIONAL
AGREEMENTS
Section
5.1 Preparation
of SEC Documents; Lumera Stockholders’ Meeting.
(a) As
soon
as practicable following the date of this Agreement, Lumera shall prepare the
Proxy Statement and the Company and Lumera shall prepare and the Company shall
file with the SEC the Form S-4, in which the Proxy Statement will be included
as
a prospectus. The Company and Lumera shall use reasonable best efforts to have
the Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. Lumera shall use reasonable best efforts to
cause
the Proxy Statement to be mailed to Lumera’s stockholders as promptly as
practicable after the Form S-4 is declared effective under the Securities Act.
The Company, Lumera and GigOptix shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or filing a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the issuance
and reservation of shares of Company Common Stock in the Mergers, the conversion
of Lumera Warrants into warrants to purchase Company Common Stock (the
“Company
Warrants”),
the
conversion of Lumera Options and GigOptix Options into options to acquire
Company Common Stock, with respect to Company Common Stock. GigOptix shall
furnish to the Company and Lumera all information concerning GigOptix and the
holders of GigOptix Options as may be reasonably requested by the Company in
connection with such action. No filing of, or amendment or supplement to, the
Form S-4 or the Proxy Statement and no response to SEC comments thereon shall
be
made by the Company or Lumera without GigOptix’s prior consent (which shall not
be unreasonably withheld, delayed or conditioned) and without providing GigOptix
the opportunity to review and comment thereon, unless the Company or Lumera
would be in violation of Applicable Laws if it were to delay such filing,
amendment or supplement in order to receive such prior consent (provided that
the Company and Lumera shall use its reasonable best efforts to provide GigOptix
with the opportunity to review and comment thereon). The Company or Lumera
shall
advise GigOptix, promptly after it receives oral or written notice thereof,
of
the time when the Form S-4 has been declared effective or any supplement or
amendment has been filed, the issuance of any stop order, the suspension of
the
qualification of the Company Common Stock or the Company Warrants issuable
in
connection with the Mergers for offering or sale in any jurisdiction, or any
oral or written request by the SEC for amendment of the Proxy Statement or
the
Form S-4 or comments thereon and responses thereto or requests by the SEC for
additional information and shall promptly provide the other with copies of
any
written communication from the SEC or any state securities commission. The
Company, Lumera and GigOptix shall prepare any written response to any such
SEC
comments. If at any time prior to the Effective Time any information relating
to
GigOptix or Lumera or any of their respective Affiliates, officers or directors
should be discovered by GigOptix or Lumera which should be set forth in an
amendment or supplement to any of the Form S-4 or the Proxy Statement, so that
any of such documents would not include any misstatement of a material fact
or
omit to state any material fact necessary to make the statements therein, in
the
light of the circumstances under which they were made, not misleading, the
party
which discovers such information shall promptly notify the other parties hereto
and an appropriate amendment or supplement describing such information shall
be
promptly filed with the SEC and, to the extent required by law, disseminated
to
the Lumera stockholders.
50
(b) Lumera
shall, as promptly as practicable after the Form S-4 is declared effective
under
the Securities Act, take all action necessary in accordance with Applicable
Laws
and the Lumera Organizational Documents to duly give notice of, convene and
hold
a meeting of its stockholders, to be held as promptly as practicable to consider
the adoption of this Agreement and approval of the transactions contemplated
hereby, the Company Charter and the New Equity Plan (the “Lumera
Stockholders’ Meeting”).
Subject to Section
4.2(d),
Lumera
shall use reasonable best efforts to solicit from its stockholders proxies
in
favor of the adoption of this Agreement and the approval of the transactions
contemplated hereby, the Company Charter and the New Equity Plan, and shall
take
all other action necessary or advisable to secure the vote or consent of its
stockholders, respectively, required by Applicable Laws and the NASDAQ
Marketplace Rules, to obtain such approvals. Notwithstanding anything to the
contrary contained in this Agreement, Lumera may adjourn or postpone the Lumera
Stockholders’ Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Proxy Statement is provided to its stockholders
in advance of a vote on the adoption of this Agreement and the approval of
the
transactions contemplated hereby, the Company Charter and the New Equity Plan,
or, if, as of the time for which the Lumera Stockholders’ Meeting is originally
scheduled, there are insufficient shares of Lumera Common Stock represented
(either in person or by proxy) to constitute a quorum necessary to conduct
the
business of such meeting. Lumera shall ensure that the Lumera Stockholders’
Meeting is called, noticed, convened, held and conducted, and that all proxies
solicited in connection with the Lumera Stockholders’ Meeting are solicited in
compliance with Applicable Laws, the Lumera Organizational Documents and the
NASDAQ Marketplace Rules. Without the prior written consent of GigOptix, the
adoption of this Agreement and the approval of the transactions contemplated
hereby, the Company Charter and the New Equity Plan shall be the only matters
which Lumera shall propose to be acted on by Lumera’s stockholders at the Lumera
Stockholders’ Meeting. Notwithstanding any other provision of this Agreement to
the contrary, if Lumera is required under Applicable Laws to submit additional
matters contemplated hereby to a vote of its stockholders, Lumera shall be
authorized and required hereunder to submit approval of such matters to its
stockholders, the term “Lumera
Stockholder Approval”
as
used
herein shall be deemed to include reference to approval of such matters by
a
vote of Lumera’s stockholders, the term “Lumera
Stockholders’ Meeting”
as
used
herein shall be deemed to include reference to submission of such matters to
a
vote of Lumera’s stockholders, and any representation and warranty by Lumera
herein with respect to stockholder votes or consents required to be obtained
by
Lumera shall be deemed to refer to such matters.
Section
5.2 GigOptix
Member Approval.
On or
before 6:00 p.m., San Francisco time, on the date hereof, GigOptix shall seek
the approval and adoption of the Predecessor Company, as the sole member of
GigOptix, of this Agreement and the transactions contemplated hereby (the
“GigOptix
Member Approval”).
In
connection with the GigOptix Member Approval, GigOptix shall comply with all
disclosure and other obligations under the ILLCA and any other Applicable
Laws.
51
Section
5.3 Accountant’s
Letters.
GigOptix shall use reasonable best efforts to cause to be delivered to Lumera
two letters from PriceWaterhouseCoopers, one dated approximately as of the
date
the Form S-4 is declared effective and one dated approximately as of the Closing
Date, addressed to Lumera, in form and substance reasonably satisfactory to
Lumera and customary in scope and substance for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
Section
5.4 Delivery
of Financial Statements.
In
preparation for the filing of the Form S-4 in which the Proxy Statement shall
be
included as a prospectus, GigOptix, at its sole expense, will engage
PriceWaterhouseCoopers to audit its financial statements for its most recently
completed three fiscal years and shall deliver to Lumera such audited
financials. Additionally, if required to comply with SEC filing requirements,
such audited financial statements shall include the results of iTerra
Communications and any other predecessor business (the “GigOptix
Audited Historical Financials”).
GigOptix will use reasonable efforts to deliver to Lumera such audited financial
statements on or prior to April 15, 2008.
Section
5.5 Access
to Information; Confidentiality.
(a) Subject
to the CDA and Applicable Laws, each of GigOptix and Lumera shall, and shall
cause each of their respective Subsidiaries to, afford to the other party and
to
the officers, employees, accountants, counsel, financial advisors, financing
sources and other representatives of such other party, reasonable access at
all
reasonable times on reasonable notice during the period prior to the Effective
Time to all their respective properties, books, contracts, commitments,
personnel and records (provided that such access shall not unreasonably
interfere with the business or operations of such party) and, during such period
and subject to the CDA and Applicable Laws, each of GigOptix and Lumera shall,
and shall cause each of their respective Subsidiaries to, make available to
the
other party (i) a copy of each material report, schedule, registration statement
and other document filed by it during such period pursuant to the requirements
of federal or state securities laws and (ii) all other material information
concerning its business, properties and personnel as such other party may
reasonably request. No review pursuant to this Section
5.5
shall
affect or be deemed to modify any representation or warranty contained herein,
the covenants or agreements of the parties hereto or the conditions to the
obligations of the parties hereto under this Agreement.
(b) Each
of
GigOptix and Lumera shall hold and keep confidential, and shall cause their
respective officers and employees and shall direct its accountants, counsel,
financial advisors and other representatives and Affiliates to hold and keep
confidential, any nonpublic information in accordance with the terms of the
CDA.
52
Section
5.6 Reasonable
Best Efforts.
(a) Upon
the
terms of, and subject to the conditions set forth in, this Agreement, each
of
the parties agrees to use its reasonable best efforts to take, or cause to
be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable
under
this Agreement and Applicable Laws and regulations to consummate and make
effective, in the most expeditious manner practicable, the Mergers and the
other
transactions contemplated by this Agreement, including using reasonable best
efforts: (i) to prepare and file all documentation to effect all necessary
applications, notices, petitions, filings and other documents and to obtain,
as
promptly as practicable, all waivers, consents, clearances, licenses, orders,
registrations, permits, approvals and authorizations necessary or advisable
to
be obtained from any third party and/or Governmental Entity in order to
consummate the Mergers and each other transaction contemplated by this
Agreement, (ii) subject to the terms of Section
5.6(b),
to
obtain all such material consents, clearances, waivers, licenses, registrations,
permits, approvals, orders and authorizations as are necessary or advisable
to
consummate the transactions contemplated by this Agreement and to comply with
the terms and conditions of all such material consents, clearances, waivers,
licenses, registrations, permits, approvals, orders and authorizations, provided
that neither party shall be required to offer or agree to an order that requires
(A) the divestiture of any properties, assets, operations or businesses, (B)
holding separate any properties, assets, operations or businesses, pending
the
satisfaction or termination of any such conditions, restrictions or agreements
affecting ownership of any such assets (or any portion thereof) as may be
necessary to permit the parties to fully complete the transactions contemplated
by this Agreement, and/or (C) satisfying any additional conditions imposed
by
Governmental Entities with respect to the Mergers and the other transactions
contemplated by this Agreement, if such divestiture, hold separate requirement
and/or satisfaction of additional conditions would reasonably be expected to
have a Material Adverse Effect on the Company, the GigOptix Surviving Company,
the Lumera Surviving Corporation and their respective Subsidiaries, taken as
a
whole, after the Mergers, (iii) to defend any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement
or
the consummation of the transactions contemplated by this Agreement, including
promptly seeking to have any stay or temporary restraining order entered by
any
court or other Governmental Entity vacated or reversed, and (iv) to execute
and
deliver any additional instruments necessary to consummate the transactions
contemplated hereby, and to fully carry out the purposes of, this Agreement.
Subject to Applicable Laws relating to the exchange of information, Lumera
and
GigOptix shall have the right to review in advance, and to the extent reasonably
practicable each shall consult the other with respect to, all the information
relating to Lumera and its Subsidiaries or GigOptix and its Subsidiaries, as
the
case may be, that appears in any filing made with, or written materials
submitted to, any Governmental Entity in connection with the Mergers and the
other transactions contemplated by this Agreement.
(b) In
connection with the filings referenced in Section
5.6(a),
the
parties shall cooperate with each other and use their respective reasonable
best
efforts to promptly prepare and file all necessary documentation, to effect
all
applications, notices, petitions and filings, to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all
Governmental Entities that are necessary or advisable to consummate the
transactions contemplated by this Agreement (including the Mergers), and to
comply with the terms and conditions of all such permits, consents, approvals
and authorizations of all such Governmental Entities. Notwithstanding the
foregoing, nothing contained herein shall be deemed to require the Company,
GigOptix or Lumera to take any action, or commit to take any action, or agree
to
any condition or restriction, in connection with obtaining the foregoing
permits, consents, approvals and authorizations of Governmental Entities, that
would reasonably be expected to have a Material Adverse Effect on the Company,
the GigOptix Surviving Company, the Lumera Surviving Corporation, and their
respective Subsidiaries, taken as a whole, after the Mergers.
53
Section
5.7 Indemnification
and Insurance.
(a) From
and
after the Effective Time, the Company, the GigOptix Surviving Company and the
Lumera Surviving Corporation shall fulfill and honor in all respects the
obligations of each of GigOptix and Lumera pursuant to any indemnification
agreements between GigOptix or Lumera, respectively, and each of their
respective present or former directors, officers and employees in effect
immediately prior to the Effective Time, subject to Applicable Laws. For at
least six years after the Effective Time, each of the Company and the GigOptix
Surviving Company shall jointly and severally indemnify and hold harmless the
present and former officers and directors of GigOptix and its Subsidiaries
(the
“GigOptix
Indemnified Parties”)
for
any costs, judgments, fines, losses, claims, damages or liabilities incurred
in
connection with any claim, action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that such Person is
or
was an officer, director or employee of GigOptix or any of its Subsidiaries
in
respect of acts or omissions occurring at or prior to the Effective Time
(including those related to this Agreement and the transactions contemplated
hereby), and shall advance expenses in respect thereof, in each case, to the
fullest extent permitted by Applicable Laws. For at least six years after the
Effective Time, each of the Company and the Lumera Surviving Corporation shall
jointly and severally indemnify and hold harmless the present and former
officers and directors of Lumera and its Subsidiaries (the “Lumera
Indemnified Parties”
and
together with the GigOptix Indemnified Parties, the “Indemnified
Parties”)
for
any costs, judgments, fines, losses, claims, damages or liabilities incurred
in
connection with any claim, action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that such Person is
or
was an officer, director or employee of Lumera or any of its Subsidiaries in
respect of acts or omissions occurring at or prior to the Effective Time
(including those related to this Agreement and the transactions contemplated
hereby), and shall advance expenses in respect thereof, in each case, to the
fullest extent permitted by Applicable Laws.
(b) For
a
period of six years after the Effective Time, the Company shall use reasonable
best efforts to cause to be maintained in effect the current policies of
directors’ and officers’ and fiduciary liability insurance maintained by
GigOptix with respect to claims arising from facts or events which occurred
on
or before the Effective Time (including those related to this Agreement and
the
transactions contemplated hereby); provided that the Company may substitute
therefor new policies of at least the same coverage and amounts containing
terms
and conditions which are no less advantageous than such current policies to
former officers and directors of GigOptix only with respect to claims arising
from facts or events which occurred at or before the Effective Time; and
provided, further, that if the aggregate annual premiums for any such current
or
new policies at any time during such six-year period would exceed 300% of the
per annum premium rate paid by GigOptix and its Subsidiaries as of the date
hereof for such current policies, then the Company shall use reasonable best
efforts to provide as much coverage under such current or new policies as is
then available at such aggregate annual premiums up to 300% of such per annum
premium rate.
54
(c) For
a
period of six years after the Effective Time, the Company shall use reasonable
best efforts to cause to be maintained in effect the current policies of
directors’ and officers’ and fiduciary liability insurance maintained by Lumera
with respect to claims arising from facts or events which occurred on or before
the Effective Time (including those related to this Agreement and the
transactions contemplated hereby); provided that the Company may substitute
therefor new policies of at least the same coverage and amounts containing
terms
and conditions which are no less advantageous than such current policies to
former officers and directors of Lumera, as the case may be, only with respect
to claims arising from facts or events which occurred at or before the Effective
Time; and provided, further, that if the aggregate annual premiums for any
such
current or new policies at any time during such six-year period would exceed
300% of the per annum premium rate paid by Lumera and its Subsidiaries as of
the
date hereof for such current policies, then the Company shall use reasonable
best efforts to provide as much coverage under such current or new policies
as
is then available at such aggregate annual premiums up to 300% of such per
annum
premium rate.
(d) Notwithstanding
anything herein to the contrary and to the maximum extent permitted by
Applicable Laws, if any claim, action, suit, proceeding or investigation is
made
or brought against any Indemnified Party on or prior to the sixth anniversary
of
the Effective Time, the provisions of this Section
5.7
shall
continue in effect until the final disposition of such claim, action, suit,
proceeding or investigation.
(e) If
the
Company, GigOptix or Lumera or any of their respective successors or assigns
(i)
shall consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or
(ii) shall transfer all or substantially all of its properties or assets to
any
Person, then, in each case, the Company, GigOptix or Lumera shall take such
action as may be necessary so that such Person shall assume all of the
applicable obligations set forth in this Section
5.7.
(f) The
provisions of this Section
5.7
are (i)
intended to be for the benefit of, and shall be enforceable by, each Indemnified
Party, his or her 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.
Section
5.8 Fees
and Expenses.
All
fees and expenses incurred in connection with the Mergers, this Agreement and
the transactions contemplated by this Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Mergers are
consummated.
Section
5.9 Public
Announcements.
Neither
Lumera nor GigOptix shall, and neither Lumera nor GigOptix shall permit any
of
their respective Subsidiaries to, issue or cause the publication of any press
release or other public announcement with respect to, or otherwise make any
public statement concerning, the transactions contemplated by this Agreement
without the prior consent (which consent shall not be unreasonably withheld,
delayed or conditioned) of GigOptix, in the case of a proposed announcement
or
statement by Lumera, or Lumera, in the case of a proposed announcement or
statement by GigOptix; provided, however, that Lumera may, without the prior
consent of GigOptix, (but after prior consultation with the other party to
the
extent practicable under the circumstances), issue or cause the publication
of
any press release or other public announcement to the extent required by
Applicable Law or by the NASDAQ Marketplace Rules.
Section
5.10 Listing.
The
Company shall use reasonable best efforts to cause the Company Common Stock
issuable under Article II and any other shares of Company Common Stock to be
reserved for issuance following consummation of the Mergers (including any
shares of Company Common Stock issuable pursuant to the Lumera Warrants, the
Lumera Options, the GigOptix Options upon their assumption and conversion
hereunder) to be authorized for listing on the NASDAQ Global Market or, if
listing on the NASDAQ Global Market is not reasonably practicable, the NASDAQ
Capital Market, upon official notice of issuance.
55
Section
5.11 Tax-Free
Treatment.
(a) Neither
GigOptix (nor its Affiliates) nor Lumera or any of their respective Subsidiaries
shall take or cause to be taken any action (including agreeing to any
transaction or entering into any agreement) that would result in the GigOptix
Merger together with the Lumera Merger failing to qualify as an integrated
series of transfers under Section 351 of the Code. GigOptix (and its Affiliates)
and Lumera shall use all reasonable efforts, and shall cause their respective
Subsidiaries to use all reasonable efforts, to cause the GigOptix Merger
together with the Lumera Merger to qualify as an integrated series of transfers
under Section 351 of the Code.
(b) GigOptix
(and its Affiliates) and Lumera and each of their respective Subsidiaries shall
not take any position on any Tax Return inconsistent with the treatment of
the
GigOptix Merger together with the Lumera Merger as an integrated series of
transfers under Section 351 of the Code, unless otherwise required pursuant
to a
determination within the meaning of Section 1313(a) of the Code.
(c) Officers
of GigOptix and Lumera shall execute and deliver to ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Raysman
& ▇▇▇▇▇▇▇ LLP, (“GigOptix’s
Counsel”)
and
Ropes & ▇▇▇▇ LLP (“Lumera’s
Counsel”)
certificates (the “Tax
Representation Letters”)
substantially in the form agreed to by the parties and their counsel at such
time or times as may be reasonably requested by such tax counsel, including
in
connection with the distribution of Form S-4 and on the Closing Date. Each
of
GigOptix (and its Affiliates), Lumera and each of their respective Subsidiaries
shall use its reasonable best efforts not to take or cause to be taken any
action which would cause to be untrue (or fail to take or cause not to be taken
any action which failure or inaction would cause to be untrue) any of the
statements included in the Tax Representation Letters.
Section
5.12 Conveyance
Taxes.
Lumera
and GigOptix shall cooperate in the preparation, execution and filing of all
returns, questionnaires, applications or other documents regarding any real
property transfer or gains, sales, use, transfer, value added, stock transfer
and stamp Taxes, any transfer, recording, registration and other fees or any
similar Taxes which become payable in connection with the transactions
contemplated by this Agreement that are required or permitted to be filed on
or
before the Effective Time.
56
Section
5.13 Equity
Awards and Employee Benefits.
(a) To
the
extent that, following the Closing Date, a Continuing GigOptix Employee (as
defined in Section
8.3(g))commences
participation in a Lumera Benefit Plan or any employee benefit plan, program,
agreement, policy or arrangement maintained by the Company (a “Company
Benefit Plan”)
or a
Continuing Lumera Employee (as defined in Section
8.3(h))commences
participation in a GigOptix Benefit Plan or a Company Benefit Plan, the Company
shall, and shall cause its Affiliates and the applicable GigOptix Benefit Plan,
Lumera Benefit Plan or Company Benefit Plan to, (i) credit each Continuing
Employee’s (as defined in Section
8.3(f))
service
with GigOptix or Lumera, or any predecessor employers to GigOptix or Lumera,
to
the extent credited under the analogous GigOptix Benefit Plan or Lumera Benefit
Plan, as service with GigOptix, Lumera or the Company, as the case may be,
for
all purposes under such GigOptix Benefit Plan, Lumera Benefit Plan or Company
Benefit Plan; provided, however, that in no event shall the Continuing Employees
be entitled to any credit to the extent that such credit would result in
duplication of benefits with respect to the same period of service, (ii) cause
any and all pre-existing condition limitations, eligibility waiting periods,
active employment requirements and requirements to show evidence of good health
under such GigOptix Benefit Plan, Lumera Benefit Plan or Company Benefit Plan,
to the extent that such conditions, exclusions and waiting periods would have
been waived or satisfied under the analogous GigOptix Benefit Plan or Lumera
Benefit Plan in which such Continuing Employee participated immediately prior
to
the Closing Date, to be waived with respect to such Continuing Employee and
such
Continuing Employee’s spouse and eligible dependents who become participants in
such GigOptix Benefit Plan, Lumera Benefit Plan or Company Benefit Plan and
(iii) give credit for or otherwise take into account under such GigOptix Benefit
Plan, Lumera Benefit Plan or Company Benefit Plan the out-of-pocket expenses
and
annual expense limitation amounts paid by each Continuing Employee under the
analogous GigOptix Benefit Plan or Lumera Benefit Plan for the year in which
the
Closing Date occurs.
(b) Each
of
GigOptix and Lumera agrees that (i) prior to the mailing of the Proxy Statement
to the stockholders of Lumera, the Company and Lumera, in Lumera’s capacity
prior to the Effective Time as the sole stockholder of the Company, shall adopt
an omnibus-type equity incentive plan containing such terms as may be agreed
upon by the Company, GigOptix and Lumera (the “New
Equity Plan”)
for
the purposes of providing for the grant, following the Effective Time, of
equity-based incentives to the directors, officers and other employees, advisors
and consultants of the Company and its Subsidiaries, and (ii) the New Equity
Plan shall be submitted to Lumera’s stockholders for approval at the Lumera
Stockholders’ Meeting, provided that the effectiveness of the New Equity Plan
shall be subject to consummation of the Mergers.
Section
5.14 Notification
of Certain Matters.
GigOptix shall give prompt notice to Lumera and Lumera shall give prompt notice
to GigOptix, as the case may be, of (i) any notice or other communication
received by such party from any Governmental Entity in connection with the
Mergers or from any Person alleging that the consent of such Person is or may
be
required in connection with the Mergers, if the subject matter of such
communication or the failure of such party to obtain such consent could be
material to GigOptix, Lumera or the Company and (ii) any actions, suits, claims,
investigations or proceedings commenced or, to such party’s knowledge,
threatened against, relating to or involving or otherwise affecting such party
or any of its Subsidiaries which relate to the Mergers.
Section
5.15 Stockholder
Litigation.
Each of
GigOptix and Lumera shall keep the other reasonably informed of, and cooperate
with the other in connection with, any stockholder litigation or claim against
it and/or its respective directors or officers relating to the Mergers or the
other transactions contemplated by this Agreement; provided, however, that
no
settlement in connection with such stockholder litigation shall be agreed to
without such other party’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, further, that all
obligations in this Section
5.15
shall be
subject to the obligations of each such party under Applicable Laws relating
to
attorney-client communication and privilege.
57
Section
5.16 Section
16(b).
The
Board of Directors of the Company, or a committee of Non-Employee Directors
thereof (as such term is defined for purposes of Rule 16b-3(b)(3) under the
Exchange Act), shall adopt a resolution before the Effective Time providing
that
the acquisition by officers and directors of Lumera and of GigOptix who will
become officers and directors of the Company at the Effective Time of Company
Common Stock in exchange for shares of Lumera Common Stock or GigOptix
Membership Units, and of options to purchase Company Common Stock and of other
derivative securities of the Company, upon assumption and conversion by the
Company of options to purchase Lumera Common Stock, options to purchase GigOptix
Membership Units or other derivative securities, in each case pursuant to the
transactions contemplated by this Agreement, are intended to be exempt from
liability pursuant to Rule 16b-3 under the Exchange Act. The Board of Directors
of Lumera, or a committee of Non-Employee Directors thereof (as such term is
defined for purposes of Rule 16b-3(b)(3) under the Exchange Act), shall adopt
a
resolution before the Lumera Effective Time providing that the disposition
by
officers and directors of Lumera Common Stock in exchange for shares of Company
Common Stock, and of options to purchase Lumera Common Stock and of other Lumera
derivative securities upon assumption and conversion by the Company of options
to purchase Lumera Common Stock and upon assumption and conversion of such
other
Lumera derivative securities, in each case pursuant to the transactions
contemplated by this Agreement, are intended to be exempt from liability
pursuant to Rule 16b-3 under the Exchange Act. The Board of Directors of
GigOptix, or a committee of Non-Employee Directors thereof (as such term is
defined for purposes of Rule 16b-3(b)(3) under the Exchange Act), shall adopt
a
resolution before the GigOptix Effective Time providing that the disposition
by
officers and directors of GigOptix Membership Units in exchange for shares
of
Company Common Stock, and of options to purchase GigOptix Membership Units
and
of other GigOptix derivative securities upon assumption and conversion by the
Company of options to purchase GigOptix Membership Units and upon assumption
and
conversion of such other GigOptix derivative securities, in each case pursuant
to the transactions contemplated by this Agreement, are intended to be exempt
from liability pursuant to Rule 16b-3 under the Exchange Act.
Section
5.17 Corporate
Actions.
By the
close of business on the day immediately after the date hereof, (a) Lumera, as
the holder of all of the outstanding shares of capital stock of the Company,
shall adopt this Agreement and approve the transactions contemplated hereby,
and
(b) the Company, as the holder of all of the outstanding shares of capital
stock
of Merger Sub G and of Merger Sub L, shall adopt this Agreement and approve
the
transactions contemplated hereby.
Section
5.18 GigOptix
Debt.
GigOptix shall prior to the Closing Date either (i) obtain from the holder
of
any indebtedness held by an Affiliate of GigOptix a waiver of any right to
repayment of any such indebtedness, except due to a distribution in the ordinary
course or (ii) cause such GigOptix Affiliate to convert such indebtedness into
equity securities of GigOptix pursuant to the terms thereof.
Section
5.19 Lumera
Reload Options.
On or
prior to the Closing Date, the Lumera compensation committee, with the consent
of Dr. ▇▇▇ ▇▇▇▇ on behalf of GigOptix (such consent not to be unreasonably
withheld), shall grant options (“Reload
Options”)
to
employees of Lumera with a strike price equal to the fair market value of Lumera
Common Stock on the date of grant, as determined by the Lumera compensation
committee.
58
Section
5.20 FIRPTA
(a) GigOptix.
On the
Closing Date prior to the Closing, if legally possible, the owner of GigOptix
for purposes of Section 1445 of the Code shall deliver to the Company a duly
executed FIRPTA statement of non-foreign status in a form reasonably acceptable
to the Company conforming to the requirements of Treasury Regulation §
1.1445-2(b).
(b) Lumera.
On the
Closing Date prior to the Closing, if legally possible, Lumera shall deliver
to
the Company a certification (in such form as may be reasonably requested by
counsel to the Company) conforming to the requirements of Treasury Regulation
§§
1.1445-2(c)(3) and 1.897-2(h) and, simultaneously with delivery of such
certificate, a form of notice to the Internal Revenue Service in accordance
with
the requirements of Treasury Regulation § 1.897-2(h)(2).
ARTICLE
VI
CONDITIONS
PRECEDENT
Section
6.1 Conditions
to Each Party’s Obligation to Effect the Mergers.
The
obligation of each party to effect the Lumera Merger and the GigOptix Merger,
as
applicable, is subject to the satisfaction or waiver at or prior to the Closing
of the following conditions:
(a) Stockholder
Approval.
The
Lumera Stockholder Approval (except for such approval relating to the New Equity
Plan) shall have been obtained.
(b) No
Injunctions or Restraints.
No
judgment, order, decree, statute, law, ordinance, rule or regulation, or other
legal restraint or prohibition, entered, enacted, promulgated, enforced or
issued by any court or other Governmental Entity of competent jurisdiction
shall
be in effect that makes illegal or prohibits the consummation of the
transactions contemplated by this Agreement.
(c) Form
S-4.
The
Form S-4 shall have been declared effective under the Securities Act prior
to
the mailing of the Proxy Statement by Lumera to its stockholders and no stop
order or proceedings seeking a stop order shall have been initiated or, to
the
Knowledge of GigOptix or Lumera, threatened by the SEC.
(d) Listing.
The
shares of Company Common Stock issuable to the stockholders and members, as
the
case may be, of Lumera and GigOptix under Article II and any other shares of
Company Common Stock to be reserved for issuance following consummation of
the
Mergers (including any shares of Company Common Stock issuable pursuant to
the
Lumera Warrants, the Lumera Options or the GigOptix Options upon their
assumption and conversion hereunder) shall have been authorized for listing
on
The NASDAQ Global Market or, if listing of the Company Common Stock on NASDAQ
shall not have been reasonably practicable, the NASDAQ Capital Market (or any
stock exchange successor to the NASDAQ Stock Market LLC), upon official notice
of issuance.
59
(e) Plexera
Business Actions.
The
Plexera Business Actions shall have been consummated.
Section
6.2 Conditions
to Obligations of Lumera.
The
obligation of Lumera to effect the Lumera Merger is further subject to
satisfaction or waiver at or prior to the Closing of the following
conditions:
(a) Representations
and Warranties.
The
representations and warranties of GigOptix set forth herein shall be true and
correct (without giving effect to any limitation as to “materiality” or
“Material Adverse Effect” set forth therein (other than the representation set
forth in Section
3.1(f),
which
shall be read with the Material Adverse Effect qualification)) both when made
and at and as of the Closing Date, as if made at and as of such time (except
to
the extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to “materiality” or
“Material Adverse Effect” set forth therein) does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on GigOptix and its Subsidiaries, taken as a whole.
(b) Performance
of Obligations of GigOptix.
GigOptix shall have performed, or complied with, in all material respects all
obligations required to be performed or complied with by it under this Agreement
at or prior to the Closing Date.
(c) Officer’s
Certificate.
Lumera
shall have received an officer’s certificate duly executed by the Chief
Financial Officer of GigOptix to the effect that the conditions set forth in
Sections 6.2(a)
and
6.2(b)
have
been satisfied.
(d) Lock-Up
Agreements.
Lumera
shall have received fully executed Lock-Up Agreements in the form attached
hereto as Exhibit
6.2(d)
from the
individuals and entities listed on Schedule
6.2(d).
(e) Predecessor
Company Indebtedness.
The
Predecessor Company shall not have repaid any of its indebtedness, except for
ordinary course distributions.
(f) No
Material Adverse Effect.
No
Material Adverse Effect of GigOptix and its Subsidiaries, taken as a whole,
shall have occurred since the date of this Agreement and be
continuing.
Section
6.3 Conditions
to Obligations of GigOptix.
The
obligations of GigOptix to effect the GigOptix Merger are further subject to
satisfaction or waiver at or prior to the Closing of the following
conditions:
(a) Representations
and Warranties.
The
representations and warranties of Lumera set forth herein shall be true and
correct (without giving effect to any limitation as to “materiality” or
“Material Adverse Effect” set forth therein (other than the representation set
forth in Section
3.2(e),
which
shall be read with the Material Adverse Effect qualification)) both when made
and at and as of the Closing Date, as if made at and as of such time (except
to
the extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to “materiality” or
“Material Adverse Effect” set forth therein) does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Lumera and its Subsidiaries, taken as a whole.
60
(b) Performance
of Obligations of Lumera.
Lumera
and the Company shall have performed, or complied with, in all material respects
all obligations required to be performed or complied with by it under this
Agreement at or prior to the Closing Date.
(c) Officer’s
Certificate.
GigOptix shall have received an officer’s certificate duly executed by the Chief
Financial Officer of Lumera to the effect that the conditions set forth in
Sections 6.3(a)
and
6.3(b)
have
been satisfied.
(d) Lumera
Closing Date Net Working Capital.
The
Lumera Closing Date Net Working Capital shall equal or exceed the Lumera Closing
Date Net Working Capital Threshold.
(e) No
Material Adverse Effect.
No
Material Adverse Effect of Lumera and its Subsidiaries, taken as a whole, shall
have occurred since the date of this Agreement and be continuing.
ARTICLE
VII
TERMINATION,
AMENDMENT AND WAIVER
Section
7.1 Termination.
This
Agreement may be terminated at any time prior to the Effective Time, whether
before or after approval of the matters presented in connection with the Mergers
by the stockholders of GigOptix or Lumera:
(a) by
mutual
written consent of Lumera and GigOptix, if the Board of Directors of each so
determines;
(b) by
written notice of either Lumera or GigOptix (as authorized by the Board of
Directors of Lumera or GigOptix, as applicable):
(i) if
the
Mergers shall not have been consummated by 180 days from the date of this
Agreement (the “Outside
Date”);
provided, further, that the right to terminate this Agreement pursuant to this
Section
7.1(b)(i)
shall
not be available to any party whose failure to perform any of its obligations
under this Agreement has been the cause of, or resulted in, the Mergers not
occurring on or before the Outside Date;
(ii) if
a
Governmental Entity that is of competent jurisdiction shall have issued a final
and nonappealable order, decree or ruling or taken any other action (including
the failure to have taken an action), having the effect of permanently
restraining, enjoining or otherwise prohibiting the Lumera Merger or the
GigOptix Merger; provided, however, that the right to terminate this Agreement
pursuant to this Section
7.1(b)(ii)
shall
not be available to any party whose failure to comply with Section
5.6
has
caused or primarily resulted in such action by such Governmental Entity;
or
61
(iii) if
the
Lumera Stockholder Approval shall not have been obtained at the Lumera
Stockholders’ Meeting, or at any adjournment or postponement thereof, at which
the vote to obtain the Lumera Stockholder Approval was taken.
(c) by
Lumera
(as authorized by its Board of Directors) if GigOptix shall have materially
breached or failed to perform any of its representations, warranties, covenants
or agreements set forth in this Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Section
6.2(a)
or
(b)
and (ii)
cannot be cured by GigOptix by the Outside Date or if capable of being cured,
shall not have been cured within 30 days following receipt of written notice
from Lumera stating Lumera’s intention to terminate this Agreement pursuant to
this Section
7.1(c)
and the
basis for such termination; provided that, Lumera shall not have the right
to
terminate this Agreement pursuant to this Section
7.1(c)
if it is
then in material breach of any representation, warranty, covenant or other
agreement hereunder that would result in the closing conditions set forth in
Section
6.3(a)
and
(b)
not
being satisfied;
(d) by
GigOptix (as authorized by its Board of Directors) if Lumera shall have
materially breached or failed to perform any of its representations, warranties,
covenants or agreements set forth in this Agreement, which breach or failure
to
perform (i) would give rise to the failure of a condition set forth in
Section
6.3(a)
or
(b)
and (ii)
cannot be cured by Lumera by the Outside Date or if capable of being cured,
shall not have been cured within 30 days following receipt of written notice
from GigOptix stating GigOptix’s intention to terminate this Agreement pursuant
to this Section
7.1(d)
and the
basis for such termination; provided that, GigOptix shall not have the right
to
terminate this Agreement pursuant to this Section
7.1(d)
if it is
then in material breach of any representation, warranty, covenant or other
agreement hereunder that would result in the closing conditions set forth in
Sections 6.2(a)
and
(b)
not
being satisfied;
(e) by
GigOptix (as authorized by its Board of Directors), at any time prior to the
Lumera Shareholder Approval, if Lumera, the Lumera Board of Directors or any
committee thereof, for any reason, shall have (i) failed to call or hold the
Lumera Stockholders’ Meeting in accordance with Section
5.1(b),
(ii)
failed to include in the Proxy Statement distributed to the stockholders of
Lumera its recommendation that such stockholders adopt this Agreement and
approve the transactions contemplated hereby, (iii) effected a Change of
Recommendation, (iv) failed to reconfirm its recommendation that stockholders
of
Lumera adopt this Agreement and approve the transactions contemplated hereby
within ten calendar days of receipt of a written request from GigOptix to do
so,
provided that GigOptix shall not make such request unless prior thereto a Person
shall have made to Lumera or its stockholders, or publicly announced, a
proposal, offer or indication of interest relating to any Acquisition with
respect to Lumera, (v) approved or recommended any Alternative Transaction,
or
(vi) failed, within ten business days after any tender or exchange offer
relating to Lumera Common Stock commenced by any third Person shall have been
first published, sent or given, to have sent to its security holders a statement
disclosing that the Board of Directors of Lumera recommends rejection of such
tender offer or exchange offer; or
62
(f) by
Lumera, at any time prior to the Lumera Stockholder Approval, if (i) the Board
of Directors of Lumera authorizes Lumera, subject to complying with the terms
of
this Agreement, to enter into a binding written agreement concerning a
transaction that constitutes a Lumera Superior Proposal and Lumera notifies
GigOptix in writing that it intends to enter into such an agreement, attaching
the most current version of such agreement (or a description of all material
terms and conditions thereof) to such notice and (ii) GigOptix does not make,
within two business days of receipt of Lumera’s written notification of its
intention to enter into a binding agreement for a Lumera Superior Proposal,
an
offer that the Board of Directors of Lumera determines, in good faith after
consultation with a financial advisor of nationally recognized reputation,
is at
least as favorable to Lumera’s stockholders as the Superior Proposal, it being
understood that Lumera shall not enter into any such binding agreement during
such two-day period.
Section
7.2 Effect
of
Termination.
(a) Effect
of Termination.
In the
event of termination of this Agreement as provided in Section
7.1,
this
Agreement shall forthwith become void and have no effect and there shall be
no
liability of any nature whatsoever on the part of any of the parties, except
(i)
as set forth in Section
5.5(b),
Section
5.7,
this
Section
7.2,
or
Article VIII (other than Section
8.1)
to the
extent applicable to such surviving sections, each of which shall survive
termination of this Agreement, and (ii) that nothing herein shall relieve any
party from any further liability for any willful or intentional breach of any
representation, warranty, covenant or agreement of such party contained herein.
No termination of this Agreement shall affect the obligations of the parties
contained in the CDA, all of which obligations shall survive termination of
this
Agreement in accordance with their terms.
(b) Certain
Definitions.
For the
purposes of this Agreement, “Acquisition,”
with
respect to a party hereto, shall mean any of the following transactions (other
than the Mergers): (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the
party pursuant to which the stockholders of the party immediately preceding
such
transaction hold less than 50% of the aggregate equity interests in the
surviving or resulting entity of such transaction or any direct or indirect
parent thereof; (ii) a sale or other disposition by the party or any of its
subsidiaries of assets representing in excess of 40% of the aggregate fair
market value of the consolidated assets of the party and its subsidiaries
immediately prior to such sale; or (iii) the acquisition by any Person or group
of Persons (including by way of a tender offer or an exchange offer or issuance
by the party or such Person or group of Persons), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 40% of the voting power of the then outstanding shares
of capital stock of the Person.
(c) Payment
by Lumera.
In the
event that this Agreement is terminated by Lumera pursuant to Section 7.1(f),
Lumera shall concurrently with such termination (subject to the further
provisions of this Section 7.2(c)), pay GigOptix $1,000,000 (the “Lumera
Termination Fee”);
provided
that,
the Lumera Termination Fee shall be payable only if following the date hereof
and prior to such termination, any Person shall have made to Lumera or its
stockholders, or publicly announced, a proposal, offer or indication of interest
relating to any Acquisition with respect to Lumera (such Person being referred
to herein as the “Lumera
Third Party Bidder”)
and
within 12 months following termination of this Agreement, an Acquisition of
Lumera is consummated by the Lumera Third Party Bidder or its Affiliate or
another Person, or Lumera enters into an agreement providing for an Acquisition
of Lumera by the Lumera Third Party Bidder or its Affiliate or another Person,
such fee payment to be made concurrently with the earlier of the consummation
of
such Acquisition or the execution of such agreement, as applicable.
63
Section
7.3 Amendment.
Subject
to compliance with Applicable Laws, this Agreement may be amended by the parties
at any time before or after the Lumera Stockholder Approval; provided, however,
that after the occurrence of either the Lumera Stockholder Approval (excluding,
to the extent applicable, such approval with respect to the New Equity Plan),
there may not be, without further approval of the stockholders or members,
as
the case may be, of Lumera and GigOptix, any amendment of this Agreement that
changes the amount or the form of the consideration to be delivered in the
Mergers to the holders of Lumera Common Stock and GigOptix Membership Units
hereunder, or which by Applicable Laws otherwise expressly requires the further
approval of such stockholders or members, as the case may be. This Agreement
may
not be amended except by an instrument in writing signed on behalf of each
of
the parties hereto and duly approved by the parties’ respective Boards of
Directors or other governing body or a duly designated committee
thereof.
Section
7.4 Extension;
Waiver.
At any
time prior to the Effective Time, a party may, subject to the proviso of
Section
7.3
(and for
this purpose treating any waiver referred to below as an amendment), (a) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) waive compliance by any other party
hereto with any of the agreements or conditions contained in this Agreement.
Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
Any extension or waiver given in compliance with this Section
7.4
or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to,
any
subsequent or other failure.
ARTICLE
VIII
GENERAL
PROVISIONS
Section
8.1 Nonsurvival
of Representations and Warranties.
None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section
8.1
shall
not limit the survival of any covenant or agreement of the parties in this
Agreement which by its terms contemplates performance after the Effective
Time.
Section
8.2 Notices.
All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be deemed given if delivered personally, sent
via
facsimile or sent by a nationally recognized overnight courier (providing proof
of delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
64
(a)
if
to
GigOptix, to:
GigOptix,
LLC
▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇, Chief Executive Officer
with
a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Telephone:
▇▇▇ ▇▇▇ ▇▇▇▇
Fax:
▇▇▇
▇▇▇ ▇▇▇▇
Attention:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(b)
if
to
Lumera, the Company, Merger Sub G or Merger Sub L, to:
Lumera
Corporation
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇
,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer
with
a
copy (which shall not constitute notice) to:
Ropes
& ▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
Section
8.3 Definitions.
For purposes of this Agreement:
(a) An
“Affiliate”
of
any
Person means another Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first Person, where “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of
a
Person, whether through the ownership of voting securities, by contract, as
trustee or executor, or otherwise;
(b) An
“Alternative
Transaction”
means
any (i) transaction pursuant to which any Person (or group of Persons), directly
or indirectly, acquires or would acquire more than 20% of the outstanding voting
power of Lumera Common Stock or GigOptix
Membership Units, as applicable, whether from Lumera or GigOptix or pursuant
to
a tender offer or exchange offer or otherwise, (ii) transaction pursuant to
which any Person (or group of Persons) acquires or would acquire control of
assets (including for this purpose the outstanding equity securities of
subsidiaries of Lumera or GigOptix, as applicable, and securities of the entity
surviving any merger or business combination, including any of Lumera’s or
GigOptix’ s Subsidiaries) of Lumera or GigOptix, or any of their respective
subsidiaries representing more than 20% of the fair market value of all of
the
assets, net revenues or net income of Lumera and its Subsidiaries, taken as
a
whole, or GigOptix and its Subsidiaries, taken as a whole, as applicable,
immediately prior to such transaction, or (iii) other merger, share exchange,
consolidation, business combination, recapitalization or similar transaction
(other than the Mergers) involving Lumera or GigOptix or any of their respective
subsidiaries, as applicable, as a result of which the holders of shares of
Lumera Common Stock or GigOptix Membership Units, respectively, immediately
prior to such transaction would not, in the aggregate, own more than 80% of
the
outstanding voting power of the surviving or resulting entity in such
transaction immediately after the consummation thereof, in each case other
than
the transactions contemplated by this Agreement;
65
(c) “Company
A Warrants”
means
warrants to purchase Company Common Stock in an amount and on such terms and
conditions (including as to exercisability and strike price) as determined
by
Lumera and GigOptix, working together and in good faith, prior to the Closing
Date, which terms and conditions shall be based on the weighted average exercise
price, the weighted average remaining term of and other terms and conditions
of
the options to purchase Company Common Stock granted in respect of Lumera Stock
Options pursuant to Section 2.1(i). The Company A Warrants shall be divided
into
four tranches, the exercise price of each of which shall be based on the
weighted average exercise price of the Lumera Stock Options as
follows:
|
Class
of Warrants
|
Per
Share Exercise Price of Lumera Stock Options
|
|
|
Class
A-1
|
Under
$2.50
|
|
|
Class
A-2
|
$2.51
- $4.00
|
|
|
Class
A-3
|
$4.01
- $6.00
|
|
|
Class
A-4
|
Over
$6.00
|
(d) “Company
B Warrants”
means
warrants to purchase Company Common Stock in an amount and on such terms and
conditions (including as to exercisability and strike price) as determined
by
Lumera and GigOptix, working together and in good faith, prior to the Closing
Date, which terms and conditions shall be based on the weighted average exercise
price, remaining term and other terms and conditions of the warrants to purchase
Company Common Stock granted in respect of Lumera Warrants pursuant to Section
2.1(i). The Company B Warrants shall be divided into two tranches, the exercise
price of warrants to purchase 180,000 shares of Company Common Stock (as
determined prior to the application of the Lumera Exchange Ratio and the
GigOptix Exchange Ratio), of which shall have an exercise price of $3.00 per
share, and the remainder of which shall have an exercise price of $7.49 per
share.
(e) “Company
C Warrants”
means
warrants to purchase Company Common Stock in an amount and on such terms and
conditions (including as to exercisability and strike price) as determined
by
Lumera and GigOptix, working together and in good faith, prior to the Closing
Date, which terms and conditions shall be based on the weighted average exercise
price, the weighted average remaining term of and other terms and conditions
of
the Lumera Reload Options.
66
(f) “Continuing
Employees”
means
the Continuing GigOptix Employees and the Continuing Lumera
Employees.
(g) “Continuing
GigOptix Employee”
each
Person who was employed by GigOptix or its Subsidiaries immediately prior to
the
Closing and is employed immediately after the Closing by the Company, the
GigOptix Surviving Company or the Lumera Surviving Corporation.
(h) “Continuing
Lumera Employee”
each
Person who was employed by Lumera or its Subsidiaries immediately prior to
the
Closing and is employed immediately after the Closing by the Company, the
GigOptix Surviving Company or the Lumera Surviving Corporation.
(i) “Contract”
means
any written, oral or other agreement, contract, subcontract, settlement
agreement, lease, sublease, binding understanding, instrument, note, option,
bond, mortgage, indenture, trust document, loan or credit agreement, warranty,
purchase order, license, sublicense, insurance policy, benefit plan or legally
binding commitment or undertaking of any nature, as in effect as of the date
hereof or as may hereinafter be in effect;
(j) “Environmental
Laws”
means
any and all federal, state, foreign, interstate, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decisions, injunctions,
decrees, requirements of any Governmental Entity, any and all common law
requirements, rules and bases of liability regulating, relating to, or imposing
liability or standards of conduct concerning pollution, Hazardous Materials
or
protection of human health, safety or the environment, as currently in
effect;
(k) “Environmental
Liabilities”
with
respect to any Person means any and all liabilities of or relating to such
Person or any of its Subsidiaries (including any entity which is, in whole
or in
part, a predecessor of such Person or any of such Subsidiaries), which (i)
arise
under or relate to matters covered by Environmental Laws and (ii) relate to
actions occurring or conditions existing on or prior to the Closing
Date;
(l) “Governmental
Entity”
means
any national, state, or local government or multinational body, any state
administrative agency, commission (including the SEC), or other political
subdivision thereof or any entity (including a court) exercising executive,
legislative, judicial or administrative functions of or pertaining to
government, any stock exchange or self regulatory entity supervising, organizing
and supporting any stock exchange;
(m) “Hazardous
Materials”
means
any materials or wastes, defined, listed, classified or regulated as hazardous,
toxic, a pollutant, a contaminant or dangerous in or under any Environmental
Laws including, but not limited to, petroleum, petroleum products, friable
asbestos, urea formaldehyde, radioactive materials and polychlorinated
biphenyls;
67
(n) “Intellectual
Property”
means
(i) trademarks, service marks, trade names, brand names, certification marks,
designs, logos and slogans, commercial symbols, business name registrations,
domain names, trade dress and other indications of origin and general
intangibles of like nature, the goodwill associated with the foregoing and
registrations in any domestic or foreign jurisdiction of, and applications
in
any such jurisdiction to register, the foregoing, including any extension,
modification or renewal of any such registration or application; (ii) inventions
and discoveries, whether patentable or not and whether or not reduced to
practice, in any domestic or foreign jurisdiction; (iii) patents, applications
for patents (including divisions, continuations, continuations-in-part,
provisionals, continued prosecution applications, substitutions, reissues,
reexaminations and renewal applications), and any renewals, extensions,
supplementary protection certificates or reissues thereof, in any such
jurisdiction; (iv) research and development data, formulae, know-how,
proprietary processes, algorithms, models and methodologies, technical
information, designs, procedures, trade secrets and confidential information
and
rights in any domestic or foreign jurisdiction to limit the use or disclosure
thereof by any Person; (v) writings and other works of authorship of any type
(including the content contained on any web site), whether copyrightable or
not,
in any such jurisdiction; (vi) computer software (whether in source code or
object code form), databases, compilations and data; and (vii) registrations
or
applications for registration of copyrights in any domestic or foreign
jurisdiction, and any renewals or extensions thereof; and (viii) any similar
intellectual property or proprietary rights;
(o) “Knowledge”
means,
with respect to Lumera, the actual knowledge of the individuals listed on
Section
8.3(o)
of the
Lumera Disclosure Schedule and, with respect to GigOptix, the actual knowledge
of the individuals listed on Section
8.3(o)of
the
GigOptix Disclosure Schedule;
(p) “Leased
Real Property”
means
all real property occupied or used pursuant to all leases, subleases, licenses
and occupancy agreements;
(q) “Lumera
Closing Date Net Working Capital”
means
(i) the current assets of Lumera and its Subsidiaries determined in accordance
with GAAP, including unrestricted cash minus
(ii) the
current liabilities of Lumera and its Subsidiaries determined in accordance
with
GAAP, plus
(iii)
Lumera’s accrued amounts for deferred rent included in liabilities, plus
(iv)
Lumera’s accrued amounts for audit and tax preparation expenses for the 2008
calendar year included in liabilities.
In the
event that Lumera sells the Plexera business division of Lumera and receives
non-cash consideration in return, any such non-cash consideration shall not
be
counted as a current asset for purposes of calculating the Lumera Closing Date
Net Working Capital.
(r) “Lumera
Closing Date Net Working Capital Threshold”
means
$6,000,000, provided
that if
the Closing has not occurred by June 30, 2008, then beginning July 1, 2008,
the
Lumera Closing Date Net Working Capital Threshold shall be reduced by $10,000
day following June 30, 2008 during which the Lumera Closing Date Net Working
Capital is calculated.
68
(s) “Material
Adverse Effect”
means,
when used with respect to GigOptix or Lumera and their respective Subsidiaries,
any change, event or occurrence which, individually or in the aggregate, has
had
or would reasonably be expected to have, a material adverse effect on the
business, assets, results of operations or financial condition of GigOptix
and
its Subsidiaries, taken as a whole, or Lumera and its Subsidiaries, taken as
a
whole, other than changes, events, occurrences or effects (i) generally
affecting (A) the industry in which GigOptix and its Subsidiaries or Lumera
and
its Subsidiaries operate, provided that such changes, events, occurrences or
effects do not have a materially disproportionate effect on GigOptix and its
Subsidiaries or Lumera and its Subsidiaries, as the case may be, (B) the
economy, credit or financial or capital markets, in the United States or
elsewhere in the world, including changes in interest or exchange rates, or
(ii)
arising out of, resulting from or attributable to (A) changes in Applicable
Law
or in generally accepted accounting principles or in accounting standards,
or
changes in general legal, regulatory or political conditions, (B) the
negotiation, execution, announcement or performance of this Agreement or the
consummation of the Mergers, including the impact thereof on relationships,
contractual or otherwise, with customers, suppliers, distributors, partners
or
employees, or any litigation arising from allegations of breach of fiduciary
duty or violation of Applicable Law relating to this Agreement or the Mergers,
(C) acts of war, sabotage or terrorism, or any escalation or worsening of any
such acts of war, sabotage or terrorism, (D) earthquakes, hurricanes, tornados
or other natural disasters, (E) any action that is required or permitted by
this
Agreement or with the other party’s written consent or at the other party’s
request, (F) any decline in the market price or change in trading volume of
the
capital stock of Lumera, (G) any failure to meet any internal or public
projections, forecasts or estimates of revenue or earnings in and of itself
(for
the avoidance of doubt, the exceptions in clauses (F) and (G) shall not prevent
or otherwise affect a determination that the underlying cause of any such
failure is a Material Adverse Effect);
(t) “Owned
Real Property”
means
real property, together with all improvements and fixtures presently or
hereafter located thereon or attached or appurtenant thereto, owned by a Person,
and all easements, licenses, rights and appurtenances relating to the
foregoing;
(u) “Permitted
Liens”
means
(i) mechanics’, carriers’, workers’ or repairmen’s liens arising in the ordinary
course of business and securing payments or obligations that are not delinquent
or which are being contested in good faith by appropriate proceedings, (ii)
statutory landlord’s Liens and Liens granted to landlords under any leases,
(iii) Liens for Taxes, assessments and other similar governmental charges which
are not due and payable and (iv) Liens that arise under zoning, land use and
other similar laws or regulations, and easements, covenants, rights-of-way
and
other imperfections of title or encumbrances, if any, which do not materially
affect the marketability of the property subject thereto and do not materially
impair the use of the property subject thereto as presently used;
(v) “Person”
means
an individual, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization or other
entity;
(w) “Plexera
Business Actions”
means
the
sale,
transfer, disposition or winding up of the Plexera business division of
Lumera.
(x) “Predecessor
Company”
means
iTerra Communications LLC.
(y) a
“Subsidiary”
of
any
Person means another Person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body is (or,
if
there are no such voting interests, more than 50% of the equity interests of
which are) owned directly or indirectly by such first Person;
69
(z) a
“Superior
Proposal”
with
respect to a party means an unsolicited, bona fide written Alternative
Transaction Proposal made by a third Person to acquire, directly or indirectly,
pursuant to a tender offer, exchange offer, merger, consolidation or other
business combination or acquisition transaction, (i) all or substantially all
of
the assets of such party or (ii) over 50% of the outstanding voting securities
of such party and as a result of which the stockholders of such party
immediately preceding such transaction would hold less than 50% of the aggregate
equity interests in the surviving or resulting entity of such transaction (or
its ultimate parent), which the Board of Directors of such party has in good
faith determined (taking into account, among other things, (A) its consultation
with its outside legal counsel and a financial adviser of national reputation
and (B) all terms and conditions of such Alternative Transaction Proposal and
this Agreement (as it may be proposed to be amended by the other party hereto)
to be more favorable, from a financial point of view, to such party’s
stockholders (in their capacities as stockholders), than the terms of this
Agreement (as it may be proposed to be amended by the other party hereto) and
to
be reasonably capable in feasibility and certainty of being consummated on
the
terms proposed, taking into account all other legal, financial, regulatory
and
other aspects of such Alternative Transaction Proposal (including conditions
to
consummation such as a financing condition);
(aa) “Trade
Secrets”
means
all inventions (whether or not patentable), discoveries, processes, procedures,
designs, formulae, trade secrets, know-how, Software, ideas, methods, research
and development, data, databases, confidential information and other proprietary
or non-public information and data;
Section
8.4 Terms
Defined Elsewhere. The following terms are defined elsewhere in this Agreement,
as indicated below:
|
Acquisition
|
7.2(b)
|
|
Agreement
|
Recitals
|
|
Alternative
Transaction Proposal
|
4.2(a)
|
|
Applicable
Laws
|
3.1(g)(ii)
|
|
CDA
|
4.2(c)(i)
|
|
Certificates
|
2.2(b)
|
|
Change
of Recommendation
|
4.2(d)(ii)
|
|
Closing
|
1.2
|
|
Closing
Date
|
1.2
|
|
Code
|
Recitals
|
|
Company
|
Recitals
|
|
Company
A Warrants Merger Consideration
|
2.1(a)
|
|
Company
B Warrants Merger Consideration
|
2.1(a)
|
|
Company
Benefit Plan
|
5.12
|
|
Company
By-Laws
|
1.7(a)
|
|
Company
Charter
|
1.7(a)
|
70
|
Company
Common Stock
|
Recitals
|
|
Company
Warrants
|
5.1(a)
|
|
Continuing
GigOptix Directors
|
1.8(b)
|
|
Continuing
Lumera Directors
|
1.8(b)
|
|
Creditors’
Laws
|
3.1(c)(i)
|
|
Designated
Director
|
1.8(a)
|
|
DGCL
|
Recitals
|
|
Effective
Time
|
1.3
|
|
Employee
Benefit Plan
|
3.1(i)(i)
|
|
Environmental
Claims
|
3.1(l)(i)
|
|
Environmental
Permits
|
3.1(l)(i)
|
|
ERISA
|
3.1(i)(i)
|
|
Exchange
Act
|
1.7(b)
|
|
Exchange
Agent
|
2.2(a)
|
|
Exchange
Fund
|
2.2(a)
|
|
Foreign
Benefit Plan
|
3.1(i)(xv)
|
|
Form
S-4
|
3.1(e)
|
|
GAAP
|
3.1(d)
|
|
GigOptix
|
Recitals
|
|
GigOptix
Audited Historical Financial Statements
|
5.4
|
|
GigOptix
Balance Sheet
|
3.1(d)(ii)
|
|
GigOptix
Benefit Plan
|
3.1(d)(ii)
|
|
GigOptix
Certificate of Merger
|
1.3
|
|
GigOptix
Certificate
|
2.2(b)
|
|
GigOptix
Common Stock Merger Consideration
|
2.1(a)
|
|
GigOptix
Director
|
1.8(a)
|
|
GigOptix
Disclosure Schedule
|
3.1
|
|
GigOptix
Effective Time
|
1.3
|
|
GigOptix
Exchange Ratio
|
2.1(a)
|
|
GigOptix
Financial Statements
|
3.1(d)(i)
|
|
GigOptix
Indemnified Parties
|
5.7(a)
|
|
GigOptix
Licenses or Permits
|
3.1(g)(i)
|
|
GigOptix
Material Contract
|
3.1(o)(i)
|
|
GigOptix
Member Approval
|
5.2
|
|
GigOptix
Membership Units
|
Recitals
|
|
GigOptix
Merger
|
Recitals
|
|
GigOptix
Merger Consideration
|
2.1(a)
|
|
GigOptix
Operating Agreement
|
3.1(a)(ii)
|
|
GigOptix
Options
|
3.1(b)(i)
|
|
GigOptix
Organizational Documents
|
3.1(a)(ii)
|
|
GigOptix
Plan
|
3.1(b)(i)
|
|
GigOptix
Subsidiary Organizational Documents
|
3.1(a)(ii)
|
|
GigOptix
Surviving Company
|
1.1(a)
|
|
GigOptix
Unaudited Financial Statements
|
3.1(d)(i)
|
71
|
GigOptix
Voting Debt
|
3.1(b)(ii)
|
|
GigOptix’s
Counsel
|
5.11(c)
|
|
ILLCA
|
Recitals
|
|
Improvements
|
3.1(p)
|
|
Indemnified
Parties
|
5.7(a)
|
|
Independent
Director
|
1.8(a)
|
|
Liens
|
3.1(a)(iii)
|
|
Lumera
|
Recitals
|
|
Lumera
Balance Sheet
|
3.2(d)(iv)
|
|
Lumera
Benefit Plans
|
3.2(h)(i)
|
|
Lumera
By-Laws
|
3.2(a)(ii)
|
|
Lumera
Certificate of Merger
|
1.3
|
|
Lumera
Certificates
|
2.2(b)
|
|
Lumera
Charter
|
3.2(a)(ii)
|
|
Lumera
Common Stock
|
Recitals
|
|
Lumera
Directors
|
1.8(a)
|
|
Lumera
Disclosure Schedule
|
3.2
|
|
Lumera
Effective Time
|
1.3
|
|
Lumera
Exchange Ratio
|
2.1(d)
|
|
Lumera
Indemnified Parties
|
5.7(a)
|
|
Lumera
Licenses or Permits
|
3.2(f)(i)
|
|
Lumera
Material Contract
|
3.2(n)
|
|
Lumera
Merger
|
Recitals
|
|
Lumera
Merger Consideration
|
2.1(d)
|
|
Lumera
Options
|
3.2(b)(i)
|
|
Lumera
Organizational Documents
|
3.2(a)(ii)
|
|
Lumera
Preferred Stock
|
3.2(b)(i)
|
|
Lumera
SEC Documents
|
3.2(d)(i)
|
|
Lumera
Stock Plan
|
3.2(b)(i)
|
|
Lumera
Stockholder Approval
|
5.1(b)
|
|
Lumera
Stockholders’ Meeting
|
5.1(b)
|
|
Lumera
Subsidiary Organizational Documents
|
3.2(a)(ii)
|
|
Lumera
Surviving Corporation
|
1.1(b)
|
|
Lumera
Termination Fee
|
7.2(c)
|
|
Lumera
Third Party Bidder
|
7.2(c)
|
|
Lumera
Voting Debt
|
3.2(b)(iii)
|
|
Lumera
Warrants
|
3.2(b)(i)
|
|
Lumera’s
Counsel
|
5.11(c)
|
|
Merger
Consideration
|
2.1(d)
|
|
Merger
Sub G
|
Recitals
|
|
Merger
Sub L
|
Recitals
|
|
Mergers
|
Recitals
|
|
Minimum
Trading Price Test
|
2.1(h)(ii)
|
|
Multiemployer
Plan
|
3.1(i)(v)
|
72
|
NASDAQ
|
2.1(g)
|
|
New
Equity Plan
|
5.13(b)
|
|
Outside
Date
|
7.1(b)(i)
|
|
Parent
|
5.18
|
|
Predecessor
Company
|
3.1
|
|
Prospective
GigOptix Financial Statements
|
4.1(c)
|
|
Proxy
Statement
|
3.1(e)
|
|
Recommendations
|
Recitals
|
|
Representatives
|
4.2(a)
|
|
SEC
|
3.1(e)
|
|
Securities
Act
|
3.1(e)
|
|
SOX
|
3.1(k)(ii)
|
|
Surviving
GigOptix Membership Units
|
Recitals
|
|
Surviving
Lumera Common Stock
|
Recitals
|
|
Tax
Representation Letters
|
5.11(c)
|
Section
8.5 Interpretation.
When a
reference is made in this Agreement to an Article, Section or Exhibit, such
reference shall be to an Article or Section of, or an Exhibit to, this Agreement
unless otherwise indicated. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation.” The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
All
terms defined in this Agreement shall have the defined meanings when used in
any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable
to
the singular as well as the plural forms of such terms and to the masculine
as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case
of
statutes) by succession of comparable successor statutes and references to
all
attachments thereto and instruments incorporated therein. References to a Person
are also to its permitted successors and assigns. Nothing in any representation,
warranty, covenant or condition in this Agreement shall in any way limit or
restrict the scope, applicability or meaning of any other representation,
warranty, covenant or condition set forth in this Agreement, and each
representation, warranty, covenant and condition in this Agreement shall be
given full separate and independent effect.
Section
8.6 Counterparts.
This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to
the
other parties.
73
Section
8.7 Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement (including the documents, agreements and instruments referred to
herein) (a) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement and neither party is relying
on
any other oral or written representation, agreement or understanding and (b)
except for the provisions of Section
5.7
(which
are intended to benefit the Indemnified Parties, including Indemnified Parties
who or which are not parties hereto), is not intended to confer upon any Person
other than the parties any rights or remedies; provided, that, prior to the
Effective Time, GigOptix shall be entitled to pursue damages on behalf of its
members in the event of an intentional breach of this Agreement or fraud by
Lumera, the Company, Merger Sub G or Merger Sub L, and Lumera shall be entitled
to pursue damages on behalf of its stockholders in the event of an intentional
breach of this Agreement or fraud by GigOptix, and each of such rights of
GigOptix and Lumera are hereby acknowledged and agreed by each of the
parties.
Section
8.8 Governing
Law.
This
Agreement and any disputes arising out of or related to this Agreement shall
be
governed by, and construed in accordance with, the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflict of laws thereof.
Section
8.9 Assignment.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the parties hereto without the prior written consent of
the
other party. Any assignment in violation of the preceding sentence shall be
void. Subject to the preceding two sentences, this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
Section
8.10 Consent
to Jurisdiction.
Each of
the parties hereto (a) consents to submit itself to the personal jurisdiction
of
the Court of Chancery of the State of Delaware and, in the absence of
jurisdiction of such court with respect to the applicable matter, any federal
court located in the State of Delaware or any Delaware state court, in the
event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, (b) agrees that it shall not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
and (c) agrees that it shall not bring any action relating to this Agreement
or
any of the transactions contemplated by this Agreement in any court other than
the Court of Chancery of the State of Delaware and, in the absence of
jurisdiction of such court with respect to the applicable matter, a federal
court sitting in the State of Delaware or a Delaware state court.
Section
8.11 Headings,
etc.
The
headings and table of contents contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
Section
8.12 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect,
insofar as the foregoing can be accomplished without materially affecting the
economic benefits anticipated by the parties to this Agreement. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible to the fullest extent permitted by Applicable Laws in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the
extent possible.
74
Section
8.13 Failure
or Indulgence Not Waiver; Remedies Cumulative.
No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude any other
or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
Section
8.14 Waiver
of Jury Trial.
EACH OF
GigOptix, Lumera, THE COMPANY, MERGER SUB G AND MERGER SUB L HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF
GigOptix, Lumera, THE COMPANY, MERGER SUB G AND MERGER SUB L IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
Section
8.15 Specific
Performance.
The
parties agree that irreparable damage would occur and that the parties would
not
have any adequate remedy at law in the event that any of the provisions of
this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the Court
of
Chancery of the State of Delaware and, in the absence of jurisdiction of such
court with respect to the applicable matter, any federal court located in the
State of Delaware or in Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity.
[Remainder
of Page Intentionally Left Blank.]
75
IN
WITNESS WHEREOF, GigOptix, Lumera, the Company, Merger Sub G and Merger Sub
L
have caused this Agreement to be executed under seal by their respective
officers thereunto duly authorized, all as of the date first written
above.
|
GIGOPTIX,
LLC
|
|
|
By:
|
/s/
▇▇▇ ▇▇▇▇
|
|
Name:
|
▇▇▇
▇▇▇▇
|
|
Title:
|
Chairman
of the Board and Chief Executive Officer
|
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇
|
|
Title:
|
Chief
Financial Officer
|
|
GALILEO
MERGER HOLDINGS, INC.
|
|
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇
|
|
Title:
|
President
|
|
|
|
|
GALILEO
MERGER SUB G, LLC
|
|
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇
|
|
Title:
|
President
|
|
GALILEO
MERGER SUB L, INC.
|
|
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇
▇▇▇▇▇
|
|
Title:
|
President
|
Exhibit
1.7(a)-1
Company
Charter
AMENDED
AND RESTATED
CERTIFICATE
OF INCORPORATION
OF
GALILEO
ACQUISITION HOLDINGS, INC.
GALILEO
ACQUISITION HOLDINGS, INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware
DOES
HEREBY CERTIFY:
1.
That
the name of the corporation is Galileo Acquisition Holdings, Inc. (the
“Corporation”).
The
original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on March 24, 2008.
2.
That
pursuant to Sections 242 and 245 of the General Corporation Law of the State
of
Delaware, this Amended and Restated Certificate of Incorporation amends and
restates the existing Certificate of Incorporation of the Corporation in its
entirety.
3.
That
the Board of Directors of the Corporation, by unanimous written consent dated
as
of March __, 2008, adopted resolutions setting forth a proposed amendment and
restatement of the existing Certificate of Incorporation of the Corporation
in
the form hereof, declaring said amendment and restatement to be advisable and
in
the best interests of the Corporation and its stockholders and submitting the
proposed amendment and restatement to the stockholders of the Corporation for
consideration thereof.
4.
That
the stockholders of the Corporation duly approved said amendment and restatement
at a meeting of the stockholders held [_______, 2008].
5.
That
the text of the existing Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirety as follows:
ARTICLE
I
The
name
of the corporation is Galileo Acquisition Holdings, Inc. (the “Corporation”).
ARTICLE
II
The
name
and mailing address of the incorporator is: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, c/o Ropes
&
▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
The
registered office of this Corporation in the State of Delaware is located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, in the City of Wilmington, County of ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The name of its registered agent at such address is
Corporation Service Company.
ARTICLE
III
The
purpose of this Corporation is to engage in any lawful act or activity for
which
corporations may be organized under the General Corporation Law of the State
of
Delaware (the “DGCL”).
ARTICLE
IV
The
total
number of shares of all classes of stock which the Corporation shall have
authority to issue is [150,000,000] shares, consisting of [120,000,000] shares
of Common Stock, par value [$0.001] per share (“Common
Stock”)
and
[30,000,000] shares of Preferred Stock, par value [$0.001] per share
(“Preferred
Stock”).
The
following is a statement of the designations and the powers, privileges and
rights, and the qualifications, limitations or restrictions thereof in respect
of each class of capital stock of this Corporation.
1.
Common
Stock.
A.
The
voting, dividend and liquidation rights of the holders of the Common Stock
are
subject to and qualified by the rights of the holders of the Preferred Stock
of
any series as may be designated by the Board of Directors upon issuance of
any
such Preferred Stock.
B.
Each
holder of Common Stock, as such, shall be entitled to one vote for each share
of
Common Stock held of record by such holder on all matters on which stockholders
generally are entitled to vote; provided, however, that, except as otherwise
required by law, holders of Common Stock, as such, shall not be entitled to
vote
on any amendment to this Certificate of Incorporation (including any Certificate
of Designations relating to any series of Preferred Stock) that relates solely
to the terms of one or more outstanding series of Preferred Stock if the holders
of such affected series are entitled, either separately or together with the
holders of one or more other such series, to vote thereon pursuant to this
Certificate of Incorporation (including any Certificate of Designations relating
to any series of Preferred Stock) or pursuant to the DGCL. There shall be no
cumulative voting.
C.
Dividends may be declared and paid on the Common Stock from funds lawfully
available therefor as and when determined by the Board of Directors.
D.
Upon
the dissolution or liquidation of the Corporation, whether voluntary or
involuntary, holders of Common Stock will be entitled to receive all assets
of
the Corporation available for distribution to its stockholders, subject to
any
preferential rights of any then outstanding Preferred Stock.
2.
Preferred
Stock.
Preferred
Stock may be issued from time to time in one or more series, each of such series
to have such terms as stated or expressed herein or in the resolution or
resolutions providing for the issue of such series adopted by the Board of
Directors of the Corporation as hereinafter provided. Any shares of Preferred
Stock which may be redeemed, purchased or acquired by the Corporation may be
reissued except as otherwise provided by law or this Certificate of
Incorporation. Different series of Preferred Stock shall not be construed to
constitute different classes of shares for the purposes of voting by classes
unless expressly provided in the resolution or resolutions providing for the
issue of such series adopted by the Board of Directors as hereinafter provided.
Authority
is hereby expressly granted to the Board of Directors from time to time to
issue
the Preferred Stock in one or more series, and in connection with the creation
of any such series, by resolution or resolutions providing for the issue of
the
shares thereof, to determine and fix such voting powers, full or limited, or
no
voting powers, and such designations, preferences and relative participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, including without limitation thereof, dividend rights,
conversion rights, redemption privileges and liquidation preferences, as shall
be stated and expressed in such resolutions, all to the full extent now or
hereafter permitted by the DGCL. Without limiting the generality of the
foregoing, the resolutions providing for issuance of any series of Preferred
Stock may provide that such series shall be superior or rank equally or be
junior to the Preferred Stock of any other series to the extent permitted by
law
and this Certificate of Incorporation. Except as otherwise provided in this
Certificate of Incorporation, no vote of the holders of the Preferred Stock
or
Common Stock shall be a prerequisite to the designation or issuance of any
shares of any series of the Preferred Stock authorized by and complying with
the
conditions of this Certificate of Incorporation, the right to have such vote
being expressly waived by all present and future holders of the capital stock
of
the Corporation.
Unless
otherwise specifically provided in the resolution establishing any series,
the
Board of Directors shall further have the authority, after the issuance of
shares of a series whose number it has designated, to amend the resolution
establishing such series to decrease the number of shares of that series (but
not below the number of shares of such series then outstanding).
ARTICLE
V
A.
The
number of directors constituting the Board of Directors shall be not fewer
than
two and not more than ten. The number of directors initially shall be seven.
Vacancies and newly-created directorships shall be filled exclusively pursuant
to a resolution adopted by the Board of Directors.
B.
Subject to the special right of the holders of any class or series of stock
to
elect directors, the Board of Directors shall be classified with respect to
the
time for which they severally hold office into three classes, as nearly equal
in
number as possible. The initial Class I Directors shall serve for a term
expiring at the first annual meeting of stockholders of the Corporation
following the filing of this Certificate of Incorporation; the initial Class
II
Directors shall serve for a term expiring at the second annual meeting of
stockholders following the filing of this Certificate of Incorporation; and
the
initial Class III Directors shall serve for a term expiring at the third annual
meeting of stockholders following the filing of this Certificate of
Incorporation. Each director in each class shall hold office until his or her
successor is duly elected and qualified. At each annual meeting of stockholders
beginning with the first annual meeting of stockholders following the filing
of
this Certificate of Incorporation, the successors of the class of directors
whose term expires at that meeting shall be elected to hold office for a term
expiring at the annual meeting of stockholders to be held in the third year
following the year of their election, with each director in each such class
to
hold office until his or her successor is duly elected and
qualified.
ARTICLE
VI
In
furtherance and not in limitation of the powers conferred by the laws of the
State of Delaware, the Board is expressly authorized to make, alter and repeal
the Bylaws of the Corporation, subject to the power of the stockholders of
the
Corporation to alter or repeal any bylaw whether adopted by them or otherwise.
ARTICLE
VII
A.
The
Corporation reserves the right at any time, and from time to time, to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation, in a manner now or hereafter prescribed by the laws of the State
of Delaware at the time in force; and all rights, preferences and privileges
of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the rights reserved in
this
Article VI.
B.
Except
as provided in paragraph C or paragraph D of this Article, the provisions in
the
following Articles may be amended or repealed only upon the affirmative vote
of
the holders of at least two thirds of the outstanding shares entitled to vote
thereon and, to the extent, if any, provided by resolution adopted by the Board
authorizing the issuance of a class or series of Common Stock or Preferred
Stock, by the affirmative vote of the holders of at least two thirds of the
outstanding shares of such class or series, voting as a separate voting group:
Article
VII (Amendments to Certificate of Incorporation)
Article
VIII (Limitation of Director Liability)
Article
IX (Indemnification)
Article
X
(Directors)
Article
XI (Special Voting Requirements)
Article
XII (Special Meeting of Stockholders)
C.
Notwithstanding the provisions of paragraph B of this Article, and except as
provided in paragraph D of this Article, an amendment or repeal of an Article
identified in paragraph B of this Article that is approved by a majority of
the
Continuing Directors (as hereinafter defined), voting separately and as a
subclass of directors, shall require the affirmative vote of the holders of
at
least a majority of the outstanding shares entitled to vote thereon and, to
the
extent, if any, provided by resolution adopted by the Board authorizing the
issuance of a class or series of Common Stock or Preferred Stock or required
by
the provisions of the DGCL, by the affirmative vote of the holders of at least
a
majority of the outstanding shares of such class or series, voting as a separate
voting group.
ARTICLE
VIII
To
the
fullest extent that the DGCL or any other law of the State of Delaware as it
exists on the date hereof or as it may hereafter be amended permits the
limitation or elimination of the liability of directors, no director of the
Corporation shall be liable to the Corporation or its stockholders for monetary
damages for any breach of fiduciary duty as a director. No amendment to, or
modification or repeal of, this provision shall adversely affect any right
or
protection of a director of the Corporation existing hereunder with respect
to
any acts or omissions of such director occurring prior to such amendment,
modification or repeal. If the DGCL is amended after approval by the
stockholders of this Article to authorize corporate action further eliminating
or limiting the personal liability of directors then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the DGCL as so amended.
ARTICLE
IX
The
Corporation shall indemnify and advance expenses to, and hold harmless, to
the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person (an “Indemnitee”) who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit
or
proceeding, whether criminal, civil, administrative or investigative (a
“proceeding”), by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the Corporation or,
while a director or an officer of the Corporation, is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise or nonprofit
entity, including service with respect to employee benefit plans, against all
liability and loss suffered and expenses (including attorneys' fees) reasonably
incurred by such Indemnitee. Notwithstanding the preceding sentence, the
Corporation shall be required to indemnify, or advance expenses to, an
Indemnitee in connection with a proceeding (or part thereof) commenced by such
Indemnitee only if the commencement of such proceeding (or part thereof) by
the
Indemnitee was authorized by the Board of Directors of the Corporation.
Neither
any amendment nor repeal of this Article VIII, nor the adoption of any provision
of this Certificate of Incorporation inconsistent with this Article VIII, shall
eliminate or reduce the effect of this Article VIII, in respect of any matter
occurring, or any cause of action, suit, claim or proceeding that, but for
this
Article VIII, would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision.
ARTICLE
X
The
directors of this Corporation may be removed only for cause; such removal shall
be by the holders of not less than two-thirds of the shares entitled to elect
the director or directors whose removal is sought in the manner provided by
the
Bylaws.
Unless
and except to the extent that the Bylaws of the Corporation shall so require,
the election of directors of the Corporation need not be by written ballot.
ARTICLE
XI
In
addition to any affirmative vote required by law, by this Certificate of
Incorporation or otherwise, any “Business Combination” (as hereinafter defined)
involving this Corporation shall be subject to approval in the manner set forth
in this Article XI.
A.
For
the purposes of this Article XI:
(1)
“Business Combination” means (i) a merger, share exchange or consolidation of
this Corporation or any of its Subsidiaries with any other corporation; (ii)
the
sale, lease, exchange, mortgage, pledge, transfer or other disposition or
encumbrance, whether in one transaction or a series of transactions, by this
Corporation or any of its Subsidiaries of all or a substantial part of this
Corporation’s assets otherwise than in the usual and regular course of business;
or (iii) any agreement, contract or other arrangement providing for any of
the
foregoing transactions.
(2)
“Continuing Director” means any member of the Board of Directors who was a
member of the Board of Directors on March 31, 2008 or who is elected to the
Board of Directors after March 31, 2008 upon the recommendation of a majority
of
the Continuing Directors voting separately and as a subclass of directors on
such recommendation.
(3)
“Subsidiary” means a domestic or foreign corporation, a majority of the
outstanding voting shares of which are owned, directly or indirectly, by this
Corporation.
B.
Except
as provided in paragraphs C and D of this Article, the affirmative vote of
the
holders of not less than two-thirds of the outstanding shares entitled to vote
thereon and, to the extent, if any, provided by resolution adopted by the Board
of Directors authorizing the issuance of a class or series of Common Stock
or
Preferred Stock or required by the provisions of the DGCL, the affirmative
vote
of the holders of not less than two-thirds of the outstanding shares of such
class or series, voting as a separate voting group, shall be required for the
adoption or authorization of a Business Combination.
C.
Notwithstanding paragraph B hereof, if a Business Combination shall have been
approved by a majority of the Continuing Directors, voting separately and as
a
subclass of directors, and if such Business Combination is otherwise required
to
be approved by this Corporation’s stockholders pursuant to the provisions of the
DGCL or of this Certificate of Incorporation other than this Article, then
the
affirmative vote of the holders of not less than a majority of the outstanding
shares entitled to vote thereon and, to the extent, if any, provided by
resolution adopted by the Board of Directors authorizing the issuance of a
class
or series of Common Stock or Preferred Stock or required by the provisions
of
the DGCL, the affirmative vote of the holders of not less than a majority of
the
outstanding shares of such class or series, voting as a separate voting group,
shall be required for the adoption or authorization of such Business
Combination.
D.
Notwithstanding paragraphs B or C of this Article, if a Business Combination
shall have been approved by a majority of the Continuing Directors, voting
separately and as a subclass of directors, and if such Business Combination
is
not otherwise required to be approved by this Corporation’s stockholders
pursuant to the provisions of the DGCL or of this Certificate of Incorporation
other than this Article, then no vote of the stockholders of this Corporation
shall be required for approval of such Business Combination.
ARTICLE
XII
Special
meetings of stockholders may be called at any time and for any purpose by the
Chairman of the Board of Directors, the Chief Executive Officer, the President,
or by vote of a majority of the Board of Directors. Further, a special meeting
of the stockholders shall be held if the holders of not less than twenty-five
percent (25%) of all the votes entitled to be cast on the issue proposed to
be
considered at such special meeting have dated, signed and delivered to the
Secretary one or more written demands for such meeting describing the purpose
or
purposes for which it is to be held. Any business transacted at any special
meeting of stockholders shall be limited to matters relating to the purpose
or
purposes stated in the notice of meeting.
ARTICLE
XIII
Except
as
otherwise provided in the By-Laws, the stockholders of the Corporation and
the
Board of Directors may hold their meetings and have an office or offices outside
of the State of Delaware and, subject to the provisions of the laws of said
State, may keep the books of the Corporation outside of said State at such
places as may, from time to time, be designated by the Board of Directors or
by
the By-Laws of this Corporation.
ARTICLE
XIV
The
Corporation expressly elects not to be governed by Section 203 of the General
Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, GALILEO ACQUISITION HOLDINGS, INC. has caused its corporate
seal to be hereunto affixed and this Certificate of Incorporation to be signed
by [______], its [_________], who hereby acknowledges under penalties of perjury
that the facts herein stated are true and that this certificate is his act
and
deed, this [ ]
day of
[ ],
2008.
|
GALILEO
ACQUISITION HOLDINGS, INC.,
a
Delaware Corporation
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Exhibit
1.7(a)-2
Company
By-Laws
AMENDED
AND RESTATED
BY-LAWS
OF
GALILEO
MERGER HOLDINGS, INC.
(a
Delaware corporation)
Amended
and Restated as of March __, 2008
ARTICLE
1
- STOCKHOLDERS
1.1
Place
of Meetings.
All
meetings of stockholders shall be held at such place, within or without the
State of Delaware, or, if so determined by the Board of Directors in its
sole
discretion, at no place (but rather by means of remote communication), as
may be
designated from time to time by the Board of Directors or the President or,
if
not so designated, at the principal executive office of the Corporation.
1.2
Annual
Meeting.
The
annual meeting of stockholders for the election of directors and for the
transaction of such other business as may properly be brought before the
meeting
shall be held at such date and time as shall be fixed by the Board of Directors
and stated in the notice of the meeting. If no annual meeting is held in
accordance with the foregoing provisions, a special meeting may be held in lieu
of the annual meeting, and any action taken at that special meeting shall
have
the same effect as if it had been taken at the annual meeting, and in such
case
all references in these By-Laws to the annual meeting of stockholders shall
be
deemed to refer to such special meeting.
To
be
properly brought before an annual meeting, business must be (a) brought by
or at
the direction of the Board of Directors or (b) brought before the meeting
by a
stockholder pursuant to written notice thereof, in accordance with Section
1.12
hereof, and received by the Secretary not fewer than sixty (60) nor more
than
ninety (90) days prior to the anniversary date of the prior year’s annual
meeting; provided that if the date of the annual meeting is advanced more
than
thirty (30) days prior to or delayed by more than thirty (30) days after
the
anniversary of the preceding year’s annual meeting, notice by the stockholder to
be timely must be so delivered not later than the close of business on the
later
of (i) the ninetieth (90th)
day
prior to such annual meeting or (ii) the tenth (10th)
day
following the day on which the notice of the date of the annual meeting was
mailed or such public disclosure was made. No business shall be conducted
at any
annual meeting of stockholders except in accordance with this Section 1.2.
If
the facts warrant, the Board of Directors, or the chairman of an annual meeting
of stockholders, may determine and declare that (x) that a proposal does
not
constitute proper business to be transacted at the meeting or (y) that business
was not properly brought before the meeting in accordance with the provisions
of
this Section 1.2 and, if, in either case, it is so determined, any such business
shall not be transacted. In addition to the procedures set forth in this
Section
1.2, stockholders desiring to include a proposal in the Corporation’s proxy
statement must also comply with the requirements set forth in Rule 14a-8
under
Section 14 of the Securities Exchange Act of 1934, as amended, or any successor
provision.
1.3
Special
Meeting.
Special
meetings of stockholders may be called at any time by the Chairman of the
Board
of Directors, the Chief Executive Officer, the President, or by vote of a
majority of the Board of Directors. Further, a special meeting of the
stockholders shall be held if the holders of not less than twenty-five (25)
percent of all the votes entitled to be cast on the issue proposed to be
considered at such special meeting have dated, signed and delivered to the
Secretary one or more written demands for such meeting describing the purpose
or
purposes for which it is to be held. Any business transacted at any special
meeting of stockholders shall be limited to matters relating to the purpose
or
purposes stated in the notice of meeting.
1.4
Notice
of Meetings.
Except
as otherwise provided by law, written notice of each meeting of stockholders,
whether annual or special, shall be given not less than ten (10) nor more
than
sixty (60) days before the date of the meeting to each stockholder entitled
to
vote at such meeting; provided that notice of a meeting to act on an amendment
to the Certificate of Incorporation, a plan of merger or share exchange,
the
sale, lease, exchange or other disposition of all or substantially all of
the
Corporation’s assets other than in the ordinary course of business or the
dissolution of the Corporation shall be given not less than twenty (20) nor
more
than sixty (60) days before such meeting. The notices of all meetings shall
state the place, if any, the date, the means of remote communications, if
any by
which stockholders and proxy holders may be deemed to be present in person
and
vote at such meeting, and the hour of the meeting. The notice of a special
meeting shall state, in addition, the purpose or purposes for which the meeting
is called. Notice of any meeting of stockholders shall be given either
personally or by mail, electronic mail, telecopy, telegram or other electronic
or wireless means. Notices not personally delivered shall be sent charges
prepaid and shall be addressed to the stockholder at the address of that
stockholder appearing on the books of the Corporation. Notice shall be deemed
to
have been given at the time when delivered personally or deposited in the
mail
or at the time of transmission when sent by electronic mail, telecopy, telegram
or other electronic or wireless means. An affidavit of the mailing or other
means of giving any notice of any stockholders’ meeting, executed by the
secretary, assistant secretary or any transfer agent of the Corporation giving
the notice, shall be prima facie evidence of the giving of such notice or
report. No notice of any meeting of stockholders or any adjourned session
thereof need be given to a stockholder if a written waiver of notice, executed
before or after the meeting or such adjourned session by such stockholder,
is
filed with the records of the meeting or if the stockholder attends such
meeting
without objecting at the beginning of the meeting to the transaction of any
business because the meeting is not lawfully called or convened. Neither
the
business to be transacted at, nor the purpose of, any meeting of the
stockholders or any adjourned session thereof need be specified in any written
waiver of notice.
1.5
Voting
List.
The
officer who has charge of the stock ledger of the Corporation shall prepare,
at
least ten (10) days before every meeting of stockholders, a complete list
of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination
of
any stockholder, for a period of at least ten (10) days prior to the meeting,
for any purpose germane to the meeting on either a reasonably accessible
electronic network (for which such information required to access the electronic
network shall be provided with the notice of the meeting) or, during ordinary
business hours, at a place within the city where the meeting is to be held.
If
the meeting is to be held at a place, the list shall also be produced and
kept
at the time and place of the meeting during the whole time of the meeting,
and
may be inspected by any stockholder who is present. If the meeting is to
be held
solely by means of remote communication, the list shall also be open to the
examination of any stockholder during the whole time of the meeting on a
reasonably accessible electronic network, and the information required to
access
such list shall be provided with the notice of the meeting.
1.6
Quorum.
Except
as otherwise provided by law, the Certificate of Incorporation or these By-Laws,
the holders of a majority of the shares of the capital stock of the Corporation
issued and outstanding and entitled to vote at the meeting, present in person,
by means of remote communication, if authorized, or represented by proxy,
shall
constitute a quorum for the transaction of business.
1.7
Adjournments.
Any
meeting of stockholders may be adjourned to any other time and to any other
place at which a meeting of stockholders may be held under these By-Laws
by the
stockholders present or represented at the meeting and entitled to vote,
although less than a quorum, or, if no stockholder is present, by any officer
entitled to preside at or to act as secretary of such meeting. It shall not
be
necessary to notify any stockholder of any adjournment of less than thirty
(30)
days if the time and place of the adjourned meeting are announced at the
meeting
at which adjournment is taken, unless after the adjournment a new record
date is
fixed for the adjourned meeting. At the adjourned meeting, the Corporation
may
transact any business which might have been transacted at the original meeting.
1.8
Voting.
Each
stockholder shall have one vote for each share of capital stock entitled
to vote
and held of record by such stockholder, unless otherwise provided by the
Delaware General Corporation Law, the Certificate of Incorporation or these
By-Laws. Each stockholder of record entitled to vote at a meeting of
stockholders may vote in person or by electronic means, as determined by
the
Board of Directors in its sole discretion. Any stockholder entitled to vote
on
any matter may vote part of the shares in favor of the proposal and refrain
from
voting the remaining shares or, except when the matter is the election of
directors, may vote them against the proposal; but if the stockholder fails
to
specify the number of shares which the stockholder is voting affirmatively,
it
will be conclusively presumed that the stockholder’s approving vote is with
respect to all shares which the stockholder is entitled to vote.
1.9
Proxy
Representation.
Every
stockholder may authorize another person or persons to act for him by proxy
in
all matters in which a stockholder is entitled to participate, whether by
waiving notice of any meeting, objecting to or voting or participating at
a
meeting, or expressing consent or dissent without a meeting. The delivery
of a
proxy on behalf of a stockholder consistent with telephonic or electronically
transmitted instructions obtained pursuant to procedures of the Corporation
reasonably designed to verify that such instructions have been authorized
by
such stockholder shall constitute execution and delivery of the proxy by
or on
behalf of the stockholder. No proxy shall be voted or acted upon after three
years from its date unless such proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and,
if,
and only as long as, it is coupled with an interest sufficient in law to
support
an irrevocable power. A proxy may be made irrevocable regardless of whether
the
interest with which it is coupled is an interest in the stock itself or an
interest in the Corporation generally. The authorization of a proxy may but
need
not be limited to specified action, provided, however, that if a proxy limits
its authorization to a meeting or meetings of stockholders, unless otherwise
specifically provided such proxy shall entitle the holder thereof to vote
at any
adjourned session but shall not be valid after the final adjournment thereof.
A
proxy purporting to be authorized by or on behalf of a stockholder, if accepted
by the Corporation in its discretion, shall be deemed valid unless challenged
at
or prior to its exercise, and the burden of proving invalidity shall rest
on the
challenger.
1.10
Action
at Meeting.
When a
quorum is present at any meeting, action on a matter shall be approved by
a
voting group if the votes cast within a voting group favoring the action
exceed
the votes cast within the group opposing the action, unless a greater number
of
affirmative votes is required by law, by the Certificate of Incorporation
or by
the By-Laws. No ballot shall be required for any election unless requested
by a
stockholder present or represented at the meeting and entitled to vote in
the
election.
1.11
Action
without Meetings.
Unless
otherwise provided in the Certificate of Incorporation, any action required
or
permitted to be taken by stockholders for or in connection with any corporate
action may be taken without a meeting, without prior notice and without a
vote,
if a consent or consents in writing or by telegram or other electronic
transmission as authorized by law, setting forth the action so taken, shall
be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action
at a
meeting at which all shares entitled to vote thereon were present and voted
and
shall be delivered to the Corporation by delivery to its registered office
in
Delaware by hand or certified or registered mail, return receipt requested,
or
by telegram or other electronic transmission as authorized by law, to its
principal place of business or to an officer or agent of the Corporation
having
custody of the book in which proceedings of meetings of stockholders are
recorded. Each such written consent shall bear the date of signature of each
stockholder who signs the consent or shall, in the case of electronic
transmissions, be in compliance with law. No written consent shall be effective
to take the corporate action referred to therein unless written consents
signed
by a number of stockholders sufficient to take such action are delivered
to the
Corporation in the manner specified in this paragraph within sixty days of
the
earliest dated consent so delivered. Action taken by written consent of the
stockholders without a meeting shall be effective when all required consents
are
in the possession of the Corporation, unless the consent specifies a later
effective date.
If
action
is taken by consent of stockholders and in accordance with the foregoing,
there
shall be filed with the records of the meetings of stockholders the writing,
writings, telegrams or electronic transmissions comprising such consent.
If
action
is taken by less than unanimous consent of stockholders, prompt notice of
the
taking of such action without a meeting shall be given to those who have
not
consented in writing and a certificate signed and attested to by the secretary
that such notice was given shall be filed with the records of the meetings
of
stockholders.
In
the
event that the action which is consented to is such as would have required
the
filing of a certificate under any provision of the Delaware General Corporation
Law, if such action had been voted upon by the stockholders at a meeting
thereof, the certificate filed under such provision shall state, in lieu
of any
statement required by such provision concerning a vote of stockholders, that
written consent has been given under Section 228 of said General Corporation
Law
and that written notice has been given as provided in such Section 228.
1.12
Notice
to Corporation.
Any
written notice required to be delivered by a stockholder to the Corporation
pursuant to Section 1.2 or Section 1.3 must be given, either by personal
delivery or by registered or certified mail, postage prepaid, to the Secretary
at the Corporation’s principal executive offices. Any such stockholder notice
shall set forth (i) the name and address of the stockholder proposing such
business; (ii) a representation that the stockholder is entitled to vote
at such
meeting and a statement of the number of shares of the Corporation that are
beneficially owned by the stockholder; (iii) a representation that the
stockholder intends to appear in person or by proxy at the meeting to propose
such business; and (iv) as to each matter the stockholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting,
the
language of the proposal (if appropriate), and any material interest of the
stockholder in such business.
ARTICLE
2
- DIRECTORS
2.1
General
Powers.
The
business and affairs of the Corporation shall be managed by or under the
direction of a Board of Directors, who may exercise all of the powers of
the
Corporation except as otherwise provided by law, the Certificate of
Incorporation or these By-Laws. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided by law,
may
exercise the powers of the full Board of Directors until the vacancy is filled.
2.2
Number;
Election and Qualification.
The
number of directors which shall constitute the whole Board of Directors shall
be
seven (7), unless otherwise determined from time to time by resolution of
the
Board of Directors, but in no event shall be less than four (4) or more than
nine (9). The directors shall be elected at the annual meeting of stockholders
by such stockholders as have the right to vote on such election. The directors
need not be stockholders of the Corporation.
Unless
otherwise designated in the Merger Agreement, only persons who are nominated
in
accordance with the following procedures shall be eligible for election as
directors. Nominations for the election of directors may be made (a) by or
at
the direction of the Board of Directors or (b) by any stockholder of record
entitled to vote for the election of directors at such meeting; provided,
however,
that a
stockholder may nominate persons for election as directors only if written
notice of such stockholder’s intention to make such nominations is received by
the Secretary not later than (i) with respect to an election to be held at
an
annual meeting of the shareholders, not fewer than sixty (60) nor more than
ninety (90) days prior to the anniversary date of the prior year’s annual
meeting and (ii) with respect to an election to be held at a special meeting
of
the stockholders for the election of directors, the close of business on
the
seventh (7th)
business day following the date on which notice of such meeting is first
given
to stockholders. Any such stockholder’s notice shall set forth (a) the name and
address of the stockholder who intends to make a nomination; (b) a
representation that the stockholder is entitled to vote at such meeting and
a
statement of the number of shares of the Corporation that are beneficially
owned
by the shareholder; (c) a representation that the stockholder intends to
appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice; (d) as to each person the stockholder proposes to nominate
for
election or re-election as a director, the name and address of such person
and
such other information regarding such nominee as would be required in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had such nominee been nominated by the Board of Directors, and
a
description of any arrangements or understandings, between the stockholder
and
such nominee and any other persons (including their names), pursuant to which
the nomination is to be made; and (e) the consent of each such nominee to
serve
as a director if elected. If the facts warrant, the Board of Directors, or
the
chairman of a stockholders’ meeting at
which
directors are to be elected, may determine and declare that a nomination
was not
made in accordance with the foregoing procedure and, if it is so determined,
the
defective nomination shall be disregarded. The right of stockholders to make
nominations pursuant to the foregoing procedure is subject to the superior
rights, if any, of the holders of any class or series of stock having a
preference over the common stock. The procedures set forth in this Section
2.2
for nomination for the election of directors by stockholders are in addition
to,
and not in limitation of, any procedures now in effect or hereafter adopted
by
or at the direction of the Board of Directors or any committee thereof.
2.3
Terms
of Office.
Except
as otherwise provided in the Certificate of Incorporation or these By-Laws,
the
directors shall be divided into three classes designated as Class I, Class
II
and Class III, respectively. At the first annual meeting of stockholders
following the closing of the transactions described in the Merger Agreement
(the
"Merger"), the term of office of the Class I directors shall expire and Class
I
directors shall be elected for a full term of three years. At the second
annual
meeting of stockholders following the closing of the Merger, the term of
office
of the Class II directors shall expire and Class II directors shall be elected
for a full term of three years. At the third annual meeting of stockholders
following the closing of the Merger, the term of office of the Class III
directors shall expire and Class III directors shall be elected for a full
term
of three years. At each succeeding annual meeting of stockholders, directors
shall be elected for a full term of three years to succeed the directors
of the
class whose terms expire at such annual meeting. The ending date of the term
for
each director shall be extended to allow for the election and qualification
of
his or her successor or accelerated in the event of his or her earlier death,
resignation or removal.
The
initial directors for the Corporation shall be designated in accordance with
the
Merger Agreement.
2.4
Vacancies.
Any
vacancy in the Board of Directors, however occurring, including a vacancy
resulting from an enlargement of the Board of Directors, may be filled for
the
remainder of the term by the Board of Directors, by the stockholders, or,
if the
directors in office constitute less than a quorum of the Board of Directors,
by
an affirmative vote of a majority of the remaining directors, or by a sole
remaining director. A director chosen to fill a vacancy shall hold office
for
the unexpired term of his predecessor in office; provided, however, that
the
ending date of the term for each director shall be extended to allow for
the
election and qualification of his or her successor or accelerated in the
event
of his or her earlier death, resignation or removal. A vacancy that will
occur
at a specific later date may be filled before the vacancy occurs, but the
new
director may not take office until the vacancy occurs.
2.5
Resignation.
Any
director may resign by delivering his or her written resignation to the
Corporation at its principal office or to the President or Secretary. Such
resignation shall be effective upon receipt unless it is specified to be
effective at some other time or upon the happening of some other event.
2.6
Regular
Meetings.
The
regular meetings of the Board of Directors may be held without notice at
such
time and place, either within or without the State of Delaware, as shall
be
determined from time to time by the Board of Directors. A regular meeting
of the
Board of Directors may be held without notice immediately after and at the
same
place as the annual meeting of stockholders.
2.7
Special
Meetings.
Special
meetings of the Board of Directors may be held at any time and place, within
or
without the State of Delaware, designated in a call by the Chairman of the
Board, the President, two or more directors, or by one director in the event
that there is only a single director in office.
2.8
Notice
of Special Meetings.
Any
special meeting of the Board of Directors must be preceded by at least two
days’
notice of the date, time, and place of the meeting, but not of its purpose,
unless the Certificate of Incorporation or these By-Laws require otherwise.
Notice may be given personally, by facsimile, by mail, or in any other manner
allowed by law. Oral notice shall be sufficient only if a written record
of such
notice is included in the Corporation’s minute book. Notice shall be deemed
effective at the earliest of: (a) receipt; (b) delivery to the proper address
or
telephone number of the director as shown in the Corporation’s records; or (c)
five days after its deposit in the United States mail, as evidenced by the
postmark, if correctly addressed and mailed with first-class postage prepaid.
Notice of any meeting of the Board of Directors may be waived by any director
at
any time, by a signed writing, delivered to the Corporation for inclusion
in the
minutes, either before or after the meeting. Attendance or participation
by a
director at a meeting shall constitute a waiver of any required notice of
the
meeting unless the director promptly objects to holding the meeting or to
the
transaction of any business on the grounds that the meeting was not lawfully
convened and the director does not thereafter vote for or assent to action
taken
at the meeting.
2.9
Meetings
by Telephone Conference Calls.
Any
meeting of the Board of Directors may be held by conference telephone or
similar
communication equipment, so long as all persons participating in the meeting
can
hear one another; and all persons participating in such a meeting shall be
deemed to be present in person at the meeting.
2.10
Quorum.
Fifty
(50) percent of the number of directors presently in office shall constitute
a
quorum at all meetings of the Board of Directors. In the event one or more
of
the directors shall be disqualified to vote at any meeting, then the required
quorum shall be reduced by one for each such director so disqualified; provided,
however, that in no case shall less than one-third (1/3) of the number of
directors of the whole Board constitute a quorum. In the absence of a quorum
at
any such meeting, a majority of the directors present may adjourn the meeting
from time to time without further notice, other than announcement at the
meeting, until a quorum shall be present.
2.11
Action
at Meeting.
At any
meeting of the Board of Directors at which a quorum is present, the vote
of a
majority of those present shall be sufficient to take any action, unless
a
different vote is specified by law, the Certificate of Incorporation or these
By-Laws. A director who is present at a meeting of the Board of Directors
when
action is taken is deemed to have assented to the action taken unless: (a)
the
director objects at the beginning of the meeting, or promptly upon his or
her
arrival, to holding it or to transacting business at the meeting; (b) the
director’s dissent or abstention from the action taken is entered in the minutes
of the meeting; or (c) the director delivers written notice of his or her
dissent or abstention to the presiding officer of the meeting before its
adjournment or to the Corporation within a reasonable time after adjournment
of
the meeting. The right of dissent or abstention is not available to a director
who votes in favor of the action taken.
2.12
Action
by Consent.
Any
action required or permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting, if all members of the Board consent
to
the action in writing or by electronic transmission and such writings or
transmissions are filed with the minutes of proceedings of the Board of
Directors or committee of the Board of Directors. Such filings shall be in
paper
form if the minutes are maintained in paper form and shall be in electronic
form
if the minutes are maintained in electronic form. Such action shall be effective
upon the signing of a consent by the last director to sign, unless the consent
specifies a later effective date.
2.13
Removal.
The
directors of the Corporation may be removed only for cause by the affirmative
vote of the holders of two-thirds of the shares of the capital stock of the
Corporation entitled to elect the director or directors whose removal is
sought
at a meeting of the stockholders called for that purpose.
2.14
Committees.
The
Board of Directors may designate one or more committees, each committee to
consist of two or more of the directors of the Corporation. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting
of
the committee. Any such committee, to the extent provided in the resolution
of
the Board of Directors and subject to the provisions of the Delaware General
Corporation Law, shall have and may exercise all the powers and authority
of the
Board of Directors in the management of the business and affairs of the
Corporation and may authorize the seal of the Corporation to be affixed to
all
papers which may require it. Each such committee shall keep minutes and make
such reports as the Board of Directors may from time to time request. Except
as
the Board of Directors may otherwise determine, any committee may make rules
for
the conduct of its business, but unless otherwise provided by the directors
or
in such rules, its business shall be conducted as nearly as possible in the
same
manner as is provided in these By-Laws for the Board of Directors.
2.15
Compensation
of Directors.
The
directors may be paid such compensation for their services and such
reimbursement for expenses of attendance at meetings as the Board of Directors
may from time to time determine. No such payment shall preclude any director
from serving the Corporation or any of its parent or subsidiary corporations
in
any other capacity and receiving compensation for such service.
ARTICLE
3
- OFFICERS
3.1
Enumeration.
The
officers of the Corporation shall consist of such officers and assistant
officers with such titles as may be designated by resolution of the Board
of
Directors. The officers may include a Chairman of the Board, a President,
a
Chief Executive Officer, one or more Vice Presidents, a Treasurer, a Secretary,
and any assistant officers. Unless otherwise restricted by the Board of
Directors, the President may appoint any assistant officer, the Treasurer
may
appoint one or more Assistant Treasurers, and the Secretary may appoint one
or
more Assistant Secretaries; provided that any such appointments shall be
recorded in writing in the corporate records. The Board of Directors may
appoint
such other officers as it may deem appropriate.
3.2
Election.
The
officers of the Corporation shall be appointed by the Board of Directors,
at its
discretion, and shall hold office at the pleasure of the Board.
3.3
Qualification.
No
officer need be a stockholder of the Corporation. Any two or more offices
may be
held by the same person.
3.4
Tenure.
Except
as otherwise provided by law, by the Certificate of Incorporation or by these
By-Laws, each officer shall hold office until his successor is elected and
qualified, unless a different term is specified in the vote choosing or
appointing him, or until his earlier death, resignation or removal.
3.5
Resignation
and Removal.
Any
officer may resign by delivering his written resignation to the Corporation
at
its principal office or to the President or Secretary. Such resignation shall
be
effective upon receipt unless it is specified to be effective at some other
time
or upon the happening of some other event. Any officer may be removed at
any
time, with or without cause, by vote of the Board of Directors at any regular
or
special meeting.
Except
as
the Board of Directors may otherwise determine, no officer who resigns or
is
removed shall have any right to any compensation as an officer for any period
following his resignation or removal, or any right to damages on account
of such
removal, whether his compensation be by the month or by the year or otherwise,
unless such compensation is expressly provided in a duly authorized written
agreement with the Corporation.
3.6
Vacancies.
The
Board of Directors may fill any vacancy occurring in any office for any reason
and may, in its discretion, leave unfilled for such period as it may determine
any offices. Each such successor shall hold office for the unexpired term
of his
or her predecessor and until his or her successor is elected and qualified,
or
until his or her earlier death, resignation or removal.
3.7
Chairman
of the Board.
The
Chairman of the Board, if one is elected, shall preside at meetings of the
Board
of Directors and of the stockholders, shall be responsible for carrying out
the
plans and directives of the Board of Directors, shall report to and consult
with
the Board of Directors and, if the Board so resolves, shall be the Chief
Executive Officer. The Chairman of the Board shall have such other powers
and
duties as the Board of Directors may from time to time prescribe.
3.8
President.
The
President shall exercise the usual executive powers pertaining to the office
of
President. In the absence of a Chairman of the Board, the President shall
preside at meetings of the Board of Directors and of the stockholders, perform
the other duties of the Chairman of the Board prescribed in this Section,
and
perform such other duties as the Board of Directors may from time to time
designate. In addition, if there is no Secretary in office, the President
shall
perform the duties of the Secretary.
3.9
Vice
Presidents.
Each
Vice President shall perform such duties as the Board of Directors may from
time
to time designate. In addition, the Vice President, or if there is more than
one, the most senior Vice President available, shall act as President in
the
absence or disability of the President.
3.10
Secretary.
The
Secretary shall be responsible for and shall keep, personally or with the
assistance of others, records of the proceedings of the directors and
stockholders; authenticate records of the Corporation; attest all certificates
of stock in the name of the Corporation; keep the corporate seal, if any,
and
affix the same to certificates of stock and other proper documents; keep
a
record of the issuance of certificates of stock and the transfers of the
same;
and perform such other duties as the Board of Directors may from time to
time
designate.
3.11
Treasurer.
The
Treasurer shall have the care and custody of, and be responsible for, all
funds
and securities of the Corporation and shall cause to be kept regular books
of
account. The Treasurer shall cause to be deposited all funds and other valuable
effects in the name of the Corporation in such depositories as may be designated
by the Board of Directors. In general, the Treasurer shall perform all of
the
duties incident to the office of Treasurer, and such other duties as from
time
to time may be assigned by the Board of Directors.
3.12
Assistant
Officers.
Assistant officers may consist of one or more Assistant Vice Presidents,
one or
more Assistant Secretaries, and one or more Assistant Treasurers. Each assistant
officer shall perform those duties assigned to him or her from time to time
by
the Board of Directors, the President, or the officer who appointed him or
her.
3.13
Salaries.
Officers of the Corporation shall be entitled to such salaries, compensation
or
reimbursement as shall be fixed or allowed from time to time by the Board
of
Directors.
ARTICLE
4
- CAPITAL STOCK
4.1
Issuance
of Stock.
Unless
otherwise voted by the stockholders and subject to the provisions of the
Certificate of Incorporation, the whole or any part of any unissued balance
of
the authorized capital stock of the Corporation or the whole or any part
of any
unissued balance of the authorized capital stock of the Corporation held
in its
treasury may be issued, sold, transferred or otherwise disposed of in such
manner, for such consideration and on such terms as the Board of Directors
may
determine.
4.2
Certificates
of Stock.
Every
holder of stock of the Corporation shall be entitled to have a certificate,
in
such form as may be prescribed by law and by the Board of Directors, certifying
the number and class of shares owned in the Corporation. Each such certificate
shall be signed by, or in the name of the Corporation by, the Chairman or
Vice
Chairman, if any, of the Board of Directors, or the President or a Vice
President, and the Treasurer or an Assistant Treasurer, or the Secretary
or an
Assistant Secretary of the Corporation. Any or all of the signatures on the
certificate may be a facsimile.
Each
certificate for shares of stock which are subject to any restriction on transfer
pursuant to the Certificate of Incorporation, the By-Laws, applicable securities
laws or any agreement among any number of stockholders or among such holders
and
the Corporation shall have conspicuously noted on the face or back of the
certificate either the full text of the restriction or a statement of the
existence of such restriction.
4.3
Consideration
for Shares.
Shares
of the Corporation may be issued for such consideration as shall be determined
by the Board of Directors to be adequate. The consideration for the issuance
of
shares may be paid in whole or in part in cash, or in any tangible or intangible
property or benefit to the Corporation, including but not limited to promissory
notes, services performed, contracts for services to be performed, or other
securities of the Corporation. Establishment by the Board of Directors of
the
amount of consideration received or to be received for shares of the Corporation
shall be deemed to be a determination that the consideration so established
is
adequate.
4.4
Transfers.
Except
as otherwise established by rules and regulations adopted by the Board of
Directors, and subject to applicable law, shares of stock may be transferred
on
the books of the Corporation by the surrender to the Corporation or its transfer
agent of the certificate representing such shares properly endorsed or
accompanied by a written assignment or power of attorney properly executed,
and
with such proof of authority or the authenticity of signature as the Corporation
or its transfer agent may reasonably require. Except as may be otherwise
required by law, by the Certificate of Incorporation or by these By-Laws,
the
Corporation shall be entitled to treat the record holder of stock as shown
on
its books as the owner of such stock for all purposes, including the payment
of
dividends and the right to vote with respect to such stock, regardless of
any
transfer, pledge or other disposition of such stock, until the shares have
been
transferred on the books of the Corporation in accordance with the requirements
of these By-Laws.
4.5
Lost,
Stolen or Destroyed Certificates.
In the
event of the loss or destruction of any certificate, a new certificate may
be
issued in lieu thereof upon satisfactory proof of such loss or destruction,
and
upon the giving of security against loss to the Corporation by bond, indemnity
or otherwise, to the extent deemed necessary by the Board of Directors, the
Secretary, or the Treasurer.
4.6
Record
Date.
The
Board of Directors may fix in advance a date as a record date for the
determination of the stockholders entitled to notice of or to vote at any
meeting of stockholders, or entitled to receive payment of any dividend or
other
distribution or allotment of any rights in respect of any change, conversion
or
exchange of stock, or for the purpose of any other lawful action. Such record
date shall not be more than sixty (60) nor less than ten (10) days before
the
date of such meeting, nor more than sixty (60) days prior to any other action
to
which such record date relates.
If
no
record date is fixed, the record date for determining stockholders entitled
to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day before the day on which notice is given, or, if notice
is
waived, at the close of business on the day before the day on which the meeting
is held. The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating to such purpose.
A
determination of stockholders of record entitled to notice of or to vote
at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
ARTICLE
5
- RECORDS AND REPORTS
5.1
Maintenance
and Inspection of Records.
The
Corporation shall, either at its principal executive office or at such place
or
places within or without the State of Delaware as designated by the Board
of
Directors, keep a record of its stockholders listing their names and addresses
and the number and class of shares held by each stockholder, a copy of these
By-Laws as amended to date, accounting books and other records.
Any
stockholder of record, in person or by attorney or other agent, shall, upon
written demand under oath stating the purpose thereof, have the right during
the
usual hours for business to inspect for any proper purpose the Corporation’s
stock ledger, a list of its stockholders, and its other books and records
and to
make copies or extracts therefrom. A proper purpose shall mean a purpose
reasonably related to such person’s interest as a stockholder. In every instance
where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney
or
such other writing that authorizes the attorney or other agent to so act
on
behalf of the stockholder. The demand under oath shall be directed to the
Corporation at its registered office in Delaware or at its principal place
of
business.
5.2
Inspection
by Director.
Any
director shall have the right to examine the Corporation’s stock ledger, a list
of its stockholders and its other books and records for a purpose reasonably
related to his or her position as a director. The Court of Chancery is hereby
vested with the exclusive jurisdiction to determine whether a director is
entitled to the inspection sought. The Court may summarily order the Corporation
to permit the director to inspect any and all books and records, the stock
ledger, and the stock list and to make copies or extracts therefrom. The
Court
may, in its discretion, prescribe any limitations or conditions with reference
to the inspection, or award such other and further relief as the Court may
deem
just and proper.
5.3
Representation
of Shares of Other Corporations.
The
President or any other officer of this Corporation authorized by the Board
of
Directors is authorized to vote, represent, and exercise on behalf of this
Corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this Corporation. The authority herein
granted may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
ARTICLE
6
- INDEMNIFICATION
6.1
Right
to Indemnification.
Each
person who was or is made a party or is threatened to be made a party to
or is
otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a “proceeding”), by reason of the
fact that he or she is or was a director or officer of the Corporation or,
while
a director or officer of the Corporation, is or was serving at the request
of
the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including
service
with respect to an employee benefit plan (hereinafter an “indemnitee”), where
the basis of such proceeding is alleged action in an official capacity as
a
director, officer, employee or agent, shall be indemnified and held harmless
by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in
the
case of any such amendment, only to the extent that such amendment permits
the
Corporation to provide broader indemnification rights than permitted prior
thereto), against all expense, liability and loss (including attorneys’ fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who
has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee’s heirs, executors and administrators; provided,
however, that, except as provided in Section 6.3 hereof with respect to
proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
6.2
Right
to Advancement of Expenses.
The
right to indemnification conferred in Section 6.1 shall include the right
to be
paid by the Corporation the expenses incurred in defending any proceeding
for
which such right to indemnification is applicable in advance of its final
disposition (hereinafter an “advancement of expenses”); provided,
however,
that,
if the Delaware General Corporation Law requires, an advancement of expenses
incurred by an indemnitee in his or her capacity as a director or officer
(and
not in any other capacity in which service was or is rendered by such
indemnitee, including, without limitation, service to an employee benefit
plan)
shall be made only upon delivery to the Corporation of an undertaking
(hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a “final
adjudication”) that such indemnitee is not entitled to be indemnified for such
expenses under this Section or otherwise.
6.3
Right
of Indemnitee to Bring Suit.
The
rights to indemnification and to the advancement of expenses conferred in
Section 6.1 and Section 6.2, respectively, shall be contract rights. If a
claim
under Section 6.1 or Section 6.2 is not paid in full by the Corporation within
sixty days after a written claim has been received by the Corporation, except
in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty days, the indemnitee may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by
the
Corporation to recover an advancement of expenses pursuant to the terms of
an
undertaking, the indemnitee shall be entitled to be paid also the expense
of
prosecuting or defending such suit. In (A) any suit brought by the indemnitee
to
enforce a right to indemnification hereunder (but not in a suit brought by
the
indemnitee to enforce a right to an advancement of expenses) it shall be
a
defense that, and (B) in any suit by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking the Corporation shall
be
entitled to recover such expenses upon a final adjudication that, the indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth
in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel,
or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by
the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee
to
enforce a right to indemnification or to an advancement of expenses hereunder,
or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Section or otherwise shall be on the Corporation.
6.4
Non-Exclusivity
of Rights.
The
rights to indemnification and to the advancement of expenses conferred in
this
Section shall not be exclusive of any other right which any person may have
or
hereafter acquire under the Certificate of Incorporation, these By-Laws,
or any
statute, agreement, vote of stockholders or disinterested directors or
otherwise.
6.5
Insurance.
The
Corporation may maintain insurance, at its expense, to protect itself and
any
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the Delaware
General Corporation Law.
ARTICLE
7
- GENERAL PROVISIONS
7.1
Fiscal
Year.
Except
as from time to time otherwise designated by the Board of Directors, the
fiscal
year of the Corporation shall begin on the first day of January in each year
and
end on the last day of December in each year.
7.2
Corporate
Seal.
The
corporate seal shall be in such form as shall be approved by the Board of
Directors.
7.3
Waiver
of Notice.
Whenever any notice whatsoever is required to be given by law, by the
Certificate of Incorporation or by these By-Laws, a waiver of such notice
either
in writing signed by the person entitled to such notice or such person’s duly
authorized attorney, or by telegraph, cable, electronic mail or any other
available method, whether before, at or after the time stated in such waiver,
or
the appearance of such person or persons at such meeting in person, by means
of
remote communications, if authorized, or by proxy shall be deemed equivalent
to
such notice. Where such an appearance is made for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
on the ground that the meeting has not been lawfully called or convened,
the
appearance shall not be deemed equivalent to notice.
7.4
Checks;
Drafts; Evidences of Indebtedness.
From
time to time, the Board of Directors shall determine by resolution which
person
or persons may sign or endorse all checks, drafts, other orders for payment
of
money, notes or other evidences of indebtedness that are issued in the name
of
or payable to the Corporation, and only the persons so authorized shall sign
or
endorse those instruments.
7.5
Corporate
Contracts and Instruments; How Executed.
The
Board of Directors, except as otherwise provided in these By-Laws, may authorize
any officer or officers, or agent or agents, to enter into any contract or
execute any instrument in the name of and on behalf of the Corporation; such
authority may be general or confined to specific instances. Unless so authorized
or ratified by the board of directors or within the agency power of an officer,
no officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
7.6
Evidence
of Authority.
A
certificate by the Secretary, or an Assistant Secretary under Section 3.10,
as
to any action taken by the stockholders, directors, a committee or any officer
or representative of the Corporation shall, as to all persons who rely on
the
certificate in good faith, be conclusive evidence of such action.
7.7
Certificate
of Incorporation.
All
references in these By-Laws to the Certificate of Incorporation shall be
deemed
to refer to the Certificate of Incorporation of the Corporation, as amended
or
restated and in effect from time to time.
7.8
Construction;
Definitions.
Unless
the context requires otherwise, the general provisions, rules of construction,
and definitions in the Delaware General Corporation Law shall govern the
construction of these By-Laws. Without limiting the generality of this
provision, (a) the singular number includes the plural, and the plural number
includes the singular; (b) the term “person” includes both a corporation and a
natural person; and (c) all pronouns include the masculine, feminine or neuter,
singular or plural, as the identity of the person or persons may require.
7.9
Provisions
Additional to Provisions of Law.
All
restrictions, limitations, requirements and other provisions of these By-Laws
shall be construed, insofar as possible, as supplemental and additional to
all
provisions of law applicable to the subject matter thereof and shall be fully
complied with in addition to the said provisions of law unless such compliance
shall be illegal.
7.10
Provisions
Contrary to Provisions of Law; Severability.
Any
article, section, subsection, subdivision, sentence, clause or phrase of
these
By-Laws [which upon being construed in the manner provided in Section 7.10
hereof], shall be contrary to or inconsistent with any applicable provisions
of
law, shall not apply so long as said provisions of law shall remain in effect,
but such result shall not affect the validity or applicability of any other
portions of these By-Laws, it being hereby declared that these By-Laws would
have been adopted and each article, section, subsection, subdivision, sentence,
clause or phrase thereof, irrespective of the fact that any one or more
articles, sections, subsections, subdivisions, sentences, clauses or phrases
is
or are illegal.
7.11
Notices.
Any
reference in these By-Laws to the time a notice is given or sent means, unless
otherwise expressly provided, the time a written notice by mail is deposited
in
the United States mails, postage prepaid; or the time any other written notice
is personally delivered to the recipient or is delivered to a common carrier
for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient; or the time any oral notice is communicated,
in person or by telephone or wireless, to the recipient or to a person at
the
office of the recipient who the person giving the notice has reason to believe
will promptly communicate it to the recipient.
ARTICLE
8
- AMENDMENTS
The
Board
of Directors is expressly authorized to make, alter and repeal the By-Laws
of
the Corporation, subject to the power of the stockholders of the Corporation
to
alter or repeal any bylaw whether adopted by them or otherwise.
Exhibit
1.7(b)
Company
Officers
▇▇▇
▇▇▇▇ – Chief Executive Officer
▇▇▇▇
▇▇▇▇▇▇▇ – Chief Financial Officer
▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇▇ – Chief Technology Officer
▇▇▇▇▇
▇▇▇▇▇ – General Manager Lumera Division
Exhibit
3.1(c)(v)
GigOptix
Independent Directors
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Exhibit
3.2(c)(vi)
Lumera
Independent Directors
C.
▇▇▇▇▇
▇▇▇▇▇▇
Exhibit
6.2(d)
Form
of Lock-up Agreement
Lumera
Corporation
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
●
,
2008
Ladies
and Gentlemen:
I
have
been advised that pursuant to the terms of the Agreement and Plan of Merger,
dated as of ● , 2008 (as it may be amended from time to time, the “Merger
Agreement”),
by and
among GigOptix, LLC, an Idaho limited liability company (“GigOptix”),
Lumera Corporation, a Delaware corporation (“Lumera”),
Galileo Merger Holdings, Inc., a Delaware corporation and a wholly-owned
subsidiary of Lumera (the “Company”),
Galileo Merger Sub G, Inc., a Delaware corporation and a wholly-owned subsidiary
of the Company (“Merger
Sub G”)
and
Galileo Merger Sub L, Inc., a Delaware corporation and a wholly-owned subsidiary
of the Company (“Merger
Sub L”)
(i)
Merger Sub G will merge with and into GigOptix, pursuant to which merger
each
membership unit of GigOptix will be converted into the right to receive ● shares
of common stock, par value $0.01 per share, of the Company (the “Company
Common Stock”)
and
(ii) Merger Sub L will merge with and into Lumera, pursuant to which merger
each
share of common stock, par value $0.001 per share, of Lumera will be converted
into the right to receive ● shares of Company Common Stock. All terms used in
this letter (the “Letter
Agreement”)
but not
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.
In
consideration of the execution of the Merger Agreement by the Company, and
for
other good and valuable consideration, the undersigned hereby irrevocably
agrees
as follows:
The
undersigned hereby agrees with the Company that, during the period ending
180
days after the Closing Date (the “Lock-Up
Period”),
the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any Company Common Stock or securities convertible
into or exchangeable or exercisable for any Company Common Stock, enter into
a
transaction which would have the same effect, or enter into any swap, hedge
or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Company Common Stock, whether any such
aforementioned transaction is to be settled by delivery of the Company Common
Stock or such other securities, in cash or otherwise, or publicly disclose
the
intention to make any such offer, sale, pledge or disposition, or to enter
into
any such transaction, swap, hedge or other arrangement, without, in each
case,
the prior written consent of the Company.
Any
Company Common Stock received by the undersigned upon exercise of stock options
granted to the undersigned will also be subject to this Letter Agreement.
Any
Company Common Stock acquired by the undersigned in open market transactions
will not be subject to this Letter Agreement.
Notwithstanding
the foregoing, the undersigned may transfer Company Common Stock as follows:
|
(i)
|
as
a bona
fide
gift or gifts, provided that the donee or donees thereof agree
to be bound
in writing by the restrictions set forth
herein;
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(ii)
|
as
dispositions, other than dispositions for value, that are made
exclusively
between and among the undersigned and members of the undersigned’s
immediate family, or the undersigned’s partners (if the undersigned is a
partnership), or the undersigned’s members (if the undersigned is a
limited liability company) or to an affiliate of the undersigned,
or to
any trust for the direct or indirect benefit of the undersigned
or the
immediate family of the undersigned, provided,
in each of the foregoing instances, that the transferee (or the
trustee in
the event of a transfer to a trust) agrees to be bound in writing
by the
restrictions set forth herein;
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(iii)
|
pursuant
to ▇▇▇▇▇ or laws of intestate succession, provided that the transferee
or
transferees thereof agree to be bound in writing by the restrictions
set
forth herein; and
|
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(iv)
|
to
permit the exercise of stock options held by the
undersigned.
|
For
purposes of this Letter Agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first
cousin.
In
furtherance of the foregoing, the Company and the transfer agent for the
Company
Common Stock hereby authorized to decline to record or register any transfer
of
Company Common Stock if such transfer would constitute a violation or breach
of
this Letter Agreement.
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Very
truly yours,
|
|
|
By:
|
|
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Name:
|
|
|
Title:
|
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Accepted
this ___ day of ● , 2008
|
By:
|
|
|
Title:
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