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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 9, 1999 (this
"Agreement"), among General Instrument Corporation, a Delaware corporation
("General Instrument"), Xxxxxxx Xxxxx Investors LLC, a Delaware limited
liability company ("Xxxxxxx Xxxxx"), Next Level Communications, a California
corporation and a wholly owned subsidiary of General Instrument ("NLC CA"), Next
Level Communications L.P., a Delaware limited partnership (the "Partnership"),
and Next Level Communications, Inc., a Delaware corporation and a wholly owned
subsidiary of the Partnership ("NLC DE").
NLC CA's authorized capital stock consists of 100 shares of common
stock, 33 1/3 of which are outstanding and held by General Instrument.
Xxxxxxx Xxxxx and NLC CA are parties to the Limited Partnership
Agreement dated as of January 13, 1998 (as amended, the "Partnership
Agreement"), under which Xxxxxxx Xxxxx holds a 9.576% general partnership
interest in the Partnership (the "GP Interest") and NLC CA holds a 90.424%
limited partnership interest in the Partnership (the "LP Interest").
NLC DE was formed by the Partnership on August 24, 1999 for the
purpose of effecting the transactions contemplated hereby and an initial public
offering (the "Initial Public Offering") of the common stock of a successor
corporation to the Partnership.
NLC DE's authorized capital stock consists of 200 million shares of
Common Stock, par value $.01 per share (the "Common Stock"), 70 million shares
of Class B Non-Voting Common Stock, par value $.01 per share (the "Class B
Common Stock"), and 10 million shares of preferred stock, par value $.01 per
share, of which 100 shares of Common Stock are outstanding and held by the
Partnership. The terms of such classes of capital stock are set forth in the
certificate of incorporation of NLC DE attached hereto as Exhibit A.
The boards of directors and the stockholders of NLC CA and NLC DE
and the partners of the Partnership have approved and adopted this Agreement in
accordance with the California General Corporation Law (the "CGCL"), the
Delaware General Corporation Law (the "DGCL"), and Delaware Revised Uniform
Limited Partnership Act (the "DRULPA").
Contemporaneously with the consummation of the transactions
contemplated by this Agreement, General Instrument and NLC DE will be entering
into a Voting Trust Agreement in the form of Exhibit B (the "Voting Trust
Agreement") with ChaseMellon
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Shareholder Services, LLC, as voting trustee (the "Voting Trustee").
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
THE MERGERS
1.1. Partnership Note. Simultaneously with the consummation of the
Partnership Merger (as defined below), General Instrument shall contribute to
NLC DE all of the indebtedness under the 8% Note due 2005 of the Partnership
held by General Instrument (the "Partnership Note") in exchange for a number of
validly issued, fully paid and non-assessable shares of Common Stock (the
certificate for which shares shall be issued to and in the name of the Voting
Trustee) equal to the amount of indebtedness outstanding under the Partnership
Note (including accrued and unpaid interest) at such time divided by the per
share initial public offering price of Common Stock pursuant to the Initial
Public Offering.
1.2. The Partnership Merger. Simultaneously with the contribution of
the Partnership Note, at the Effective Time of the Partnership Merger, the
Partnership shall be merged with and into NLC DE in accordance with the DGCL and
DRULPA (the "Partnership Merger"). From and after the Effective Time of the
Partnership Merger, the separate partnership existence of the Partnership shall
cease and NLC DE shall continue as the surviving entity under the name "Next
Level Communications, Inc." (the "Surviving Entity"). From and after the
Effective Time of the Partnership Merger, the Surviving Entity shall possess all
of the rights, privileges, immunities, powers and purposes, and be subject to
all of the liabilities, obligations and penalties, of the Partnership and NLC
DE, all as provided under applicable law.
1.3. Conversion Pursuant to the Partnership Merger. As of the
Effective Time of the Partnership Merger, by virtue of the Partnership Merger
and without any action on the part of any party hereto:
(a) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time of the Partnership Merger (which shall not
include the shares of Common Stock simultaneously being issued pursuant to
Section 1.1) shall be canceled and retired without any conversion thereof.
(b) The GP Interest shall be canceled and converted into and become
5,863,329 validly issued, fully paid and non-assessable shares of Common
Stock. NLC DE shall cause to be delivered certificate(s) for such shares
to and in the
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name of Xxxxxxx Xxxxx or its designees or transferees in the denominations
requested by Xxxxxxx Xxxxx.
(c) The LP Interest shall be canceled and converted into and become
a number (the "LP Interest Share Number") of validly issued, fully paid
and non-assessable shares of Class B Common Stock equal to the sum of (i)
55,366,091 and (ii) $88 million divided by the per share initial public
offering price of Common Stock pursuant to the Initial Public Offering.
NLC DE shall cause to be delivered a certificate for such shares to and in
the name of NLC CA.
1.4. Certificate of Incorporation and By-laws of the Surviving
Entity. The certificate of incorporation of NLC DE shall be the certificate of
incorporation of the Surviving Entity after the Effective Time of the
Partnership Merger, until amended in accordance with applicable law. The by-laws
of NLC DE shall be the by-laws of the Surviving Entity after the Effective Time
of the Partnership Merger, until amended in accordance with applicable law.
1.5. Directors and Officers of the Surviving Entity. The directors
and officers of NLC DE at the Effective Time of the Partnership Merger shall be
the directors and officers of the Surviving Entity after the Effective Time of
the Partnership Merger, until expiration of their current terms, or their prior
resignation, removal or death, subject to the certificate of incorporation and
the by-laws of the Surviving Entity.
1.6. Voting Trust. Prior to the Effective Time of the NLC Merger (as
defined below), General Instrument shall deposit with the Voting Trustee all of
the outstanding shares of common stock of NLC CA pursuant to and in accordance
with the Voting Trust Agreement.
1.7. The NLC Merger. Immediately after the Effective Time of the
Partnership Merger and the transaction contemplated by Section 1.6, at the
Effective Time of the NLC Merger, NLC CA shall be merged with and into the
Surviving Entity in accordance with the DGCL and the CGCL (the "NLC Merger";
together with the Partnership Merger, the "Mergers"). From and after the
Effective Time of the NLC Merger, the separate corporate existence of NLC CA
shall cease and the Surviving Entity shall continue as the surviving corporation
under the name "Next Level Communications, Inc." (the "Surviving Corporation").
From and after the Effective Time of the NLC Merger, the Surviving Corporation
shall possess all of the rights, privileges, immunities, powers and purposes,
and be subject to all of the liabilities, obligations and penalties, of NLC CA
and the Surviving Entity, all as provided under applicable law.
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1.8. Conversion Pursuant to the NLC Merger. As of the Effective Time
of the NLC Merger, by virtue of the NLC Merger and without any action on the
part of any party hereto:
(a) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time of the NLC Merger shall remain outstanding as
one share of Common Stock.
(b) Each share of Class B Common Stock issued and outstanding
immediately prior to the Effective Time of the NLC Merger shall be
canceled and retired without any conversion thereof.
(b) Each share of common stock of NLC CA issued and outstanding
immediately prior to the Effective Time of the NLC Merger shall be
canceled and converted into and become a number of validly issued, fully
paid and non-assessable shares of Common Stock equal to the LP Interest
Share Number divided by 33 1/3. NLC DE shall cause to be delivered a
certificate for such shares to and in the name of the Voting Trustee.
1.9. Certificate of Incorporation and By-laws of the Surviving
Corporation. The certificate of incorporation of the Surviving Entity shall be
the certificate of incorporation of the Surviving Corporation after the
Effective Time of the NLC Merger, until amended in accordance with applicable
law. The by-laws of the Surviving Entity shall be the by-laws of the Surviving
Corporation after the Effective Time of the NLC Merger, until amended in
accordance with applicable law.
1.10. Directors and Officers of the Surviving Corporation. The
directors and officers of the Surviving Entity at the Effective Time of the NLC
Merger shall be the directors and officers of the Surviving Corporation after
the Effective Time of the NLC Merger, until expiration of their current terms,
or their prior resignation, removal or death, subject to the certificate of
incorporation and the by-laws of the Surviving Corporation.
1.11. Effective Time. The Partnership Merger shall become effective
(the "Effective Time of the Partnership Merger") upon the due filing of a
certificate of merger with the Secretary of State of Delaware in accordance with
the DGCL and the DRULPA, or at such later time as is specified in such
certificate of merger. The NLC Merger shall become effective (the "Effective
Time of the NLC Merger") upon the due filing of certificates of merger with the
Secretary of State of Delaware and the Secretary of State of California in
accordance with the DGCL and the CGCL, or at such later time as is specified in
such certificate of merger.
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1.12. Treatment of Employee Stock Options. Prior to the Effective
Time of the NLC Merger, the Board of Directors of NLC CA shall take appropriate
actions so that, at the Effective Time of the NLC Merger, each of the employee
stock options previously issued by NLC CA which is outstanding immediately prior
to the Effective Time of the NLC Merger shall be converted automatically
pursuant to the NLC Merger into an option to purchase the same number of shares
of Common Stock at the same exercise price.
1.13. Warrant. By operation of the NLC Merger, the option
contemplated by Section 10.2 of the Limited Partnership Agreement shall be
converted automatically into a Warrant of NLC DE. To further evidence such
conversion, NLC DE and Xxxxxxx Xxxxx shall enter into the Warrant Agreement in
the form of Exhibit C hereto.
1.14. No Fractional Shares. The number of shares of Common Stock
issuable to General Instrument pursuant to the transactions contemplated by this
Article I shall be rounded to the nearest full share (so that no fractional
shares are issued).
ARTICLE II
CONDITIONS
Consummation of the transactions contemplated hereby is subject to
the satisfaction at or before the Effective Time of the Partnership Merger of
the following conditions:
2.1. Registration Statement. The registration statement relating to
the Initial Public Offering shall have been declared effective under the
Securities Act of 1933, as amended.
2.2. Underwriting Agreement. All conditions required to be satisfied
under the underwriting agreement relating to the Initial Public Offering (other
than the Mergers and the other transactions contemplated by Article I) shall
have been satisfied and the parties to such underwriting agreement shall be
willing and prepared to immediately consummate the Initial Public Offering.
ARTICLE III
MISCELLANEOUS
3.1. Termination. At any time prior to the Effective Time of the
Partnership Merger, subject to the letter agreement dated September 14, 1999
among General Instrument, Motorola, Inc.
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and Xxxxxxx Xxxxx, this Agreement may be terminated by General Instrument.
3.2. Amendment. This Agreement may be amended at any time by a
written instrument executed by each of the parties hereto only.
3.3. Further Assurances. Each of NLC CA and Xxxxxxx Xxxxx (in its
capacity as the general partner of the Partnership only) shall at any time, or
from time to time, as and when requested by the Surviving Corporation, execute
and deliver, or cause to be executed and delivered in its name, all such
conveyances, assignments, transfers, deeds or other instruments, and shall take,
or cause to be taken, such further or other action in order to evidence the
transfer, vesting or devolution of any property, right, privilege, immunity,
power or purpose, or to vest or perfect or confirm to the Surviving Corporation
title to and possession of all the properties, rights, privileges, immunities,
powers and purposes of NLC CA or the Partnership, as the case may be, and
otherwise to carry out the intent and purposes hereof.
3.4. Reorganization. The parties hereto intend the Mergers to
qualify as a tax-free reorganization under the Internal Revenue Code.
3.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by its respective officers hereunto duly authorized all
as of the date first above written.
GENERAL INSTRUMENT CORPORATION
By:______________________________________
Name:
Title:
XXXXXXX XXXXX INVESTORS LLC
By:______________________________________
Name:
Title:
NEXT LEVEL COMMUNICATIONS
By:______________________________________
Name:
Title:
NEXT LEVEL COMMUNICATIONS L.P.
By: Xxxxxxx Xxxxx Investors LLC,
its General Partner
By:________________________________
Name:
Title:
NEXT LEVEL COMMUNICATIONS, INC.
By:______________________________________
Name:
Title:
